These days it can seem like everyone has the expert tip to solve all our financial problems. But no matter how safe the bet, the markets can still get us down. After all, for centuries the most safe investment was in real estate or land. Then the 2008 financial collapse happened.

Before that it was the dot-com bubble, before that it was the Oil Crises of the 1970s. Centuries ago, believe it or not, there was a financial collapse due to tulips. That’s right, flowers brought down business empires.

One of the hottest tips right now is Gold. There are a number of reasons to convert some of your portfolio to a Gold IRA, and there are also a number of reasons not to. We’ll break down the Pros and Cons, and then offer some FAQs at the end.

Benefits of Converting to a Gold IRA

One of the biggest reasons to convert to a precious metals IRA is that some people see it as a protection from inflation. The basic reasoning is that if inflation goes up faster than the returns on your investment, then your money won’t be worth as much when you retire. Some people have pointed to Gold’s good track record against inflation as a good reason to convert to it.

Another benefit to a precious metals account is that it’s about more than gold. Gold IRAs are really called Self-Directed Precious Metals IRAs. This means you can diversify your portfolio to include silver, platinum, and even palladium.

A final benefit to have a Gold IRA is that it balances your portfolio. Most market analysts will advise you to have some form of diversification. Don’t invest everything in one business, or even one type of business. According to some market watchers, this should include precious metals.

Downsides of a Gold IRA

For as many people as there are that swear by Gold IRAs, there are also people who have sworn off of them. One big reason to avoid putting all your eggs in the gold basket is that gold can be incredibly volatile. While it does go through growth of phenomenal rates, it also can shrink to fractions of what you paid for it. This means that you could potentially lose your whole nest egg because of one market completely out of your control.

Another risk to the precious metals market is that you don’t actually, physically posses your gold. This is a small risk, but one we should point out. When you have a Gold IRA, similar to when you have stocks in a traditional IRA, you do not physically hold the gold. Your agent or IRA manager arranges to transport and hold your gold for you until you’re ready to move it.

Next to consider when owning a Gold IRA is that gold, in and of itself, does not earn money the way a stock or a bond does. When you own stock in a company, and that company does well, you are entitled to stock dividends. When the price of gold goes up, you will only see any benefit if you take the action of selling that gold. And like any commodity, you have to make sure you sell it at the right time, or you could miss profits.

The last downside is maybe the biggest. And that’s cost. Many Gold IRAs take several hundreds of dollars to set up, more money to transport the gold, more money to store it, and even then you can’t go access it. Like any other IRA, if you want to reap the cash reward of your prudent investment you’ll need to actually sell some of the gold. 

In some cases, an initial investment of $50,000 into your Gold IRA could net only $40,000 worth of physical gold that you may end up with. If the price every goes up and you want to cash out, you’ll have to make sure you’re abiding by IRS rules so you don’t get penalized, and you’ll have to make sure your agent doesn’t charge you for the transaction.


Whether to invest in a product or company can be a hard decision to reach. That’s one reason why many people don’t talk about investments with friends or family; it can ruin relationships.

We cannot tell you definitively whether you absolutely should or should not roll your IRA into a Gold IRA. But there are ways to convert your existing account into two or more IRAs, one of which you can make a Gold IRA. This would give you the flexibility and assuredness of gold, without the risks of all your assets being tied to one commodity.

Whatever you decide, make sure you do your research on a good Gold IRA firm, and make sure they have upfront, transparent pricing.


Can I Roll Any IRA Into a Gold IRA?

Typically, yes, though you should note whether your existing account was paid with pre- or post-tax income, as that will determine which Gold account will be easier to set up.

Is Rolling a IRA Over Time-Sensitive?

Yes it is. In fact, if you don’t have the funds moved over to an accredited IRA within a specific time frame (typically 60 days) you could face stiff penalties.

Do I Need a Gold IRA to Invest in Gold?

No, actually, you don’t. You can always invest in gold companies with your traditional IRAs, or in gold holding companies. This means you’re never at risk of owning the physical asset, and you can earn dividends off of the companies’ performance.

About the Author James Holland

James is a certified financial planner who helps retirees and pre-retirees make the most of their money. He has more than 10 years of experience in the field, and he knows how to help people plan for retirement on a budget. James also offers advice on estate planning, long-term care, and other aspects of retirement planning.

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