Gold IRA vs. Physical Gold: Comparison & Decision Guide

Physical gold investments have been a top consideration among those looking to retire with a large sum for years. Many individuals are unaware of the benefits of a gold individual retirement account. Choosing between a gold IRA vs. physical gold can significantly affect your long-term investment results.

Although gold IRAs are lesser known, they bring significant benefits and differ distinctly from physical gold investments. They also have substantial differences regarding taxes and costs.

Investing in a gold IRA could potentially bring more benefits than independently purchasing gold jewelry, bullion, or bars. Compare the two to determine which option is best for your investment goals. And of course, make sure to consult a professional tax and/or financial advisor.

Differences Between a Gold IRA and Physical Gold

Knowing the differences between a gold IRA and physical gold is essential when storing your investments. The main characteristics of these investment options can help you determine the best ways to secure and maintain responsibility for your assets.

Both options require safe and secure storage. They replace stocks, bonds, and other financial assets common with retirees. Because gold requires insurance and custodial maintenance, each investment type requires unique shipping methods and incurs high costs.

Both also include tax benefits.

Gold IRA

Regarding a gold IRA vs. physical gold, a gold IRA is a self-directed option that gives you the freedom to appoint a trustee and manage your account yourself otherwise. Trustees are IRS-required and act as mediators for management problems and releasing payments.

There are three types of gold IRAs: traditional gold IRAs, Roth gold IRAs, and SEP gold IRAs. Standard options work like regular IRAs, while a Roth gold IRA operates without future taxes. SEP options are best for self-employed investors.

Gold IRAs can hold other metals like silver and palladium, but these options are less popular than gold. Other limitations include those on income, with $6,000 of yearly contributions.

Because they have different storage requirements than physical gold, IRAs include shipping and storage fees. Consider potential costs for annual transactions, brokerage fees, and more.

If you would like to read more about the intricacies of a precious metals IRA, check out our article: Anatomy of a Gold IRA Rollover.

Physical Gold

Some people prefer to store gold in their residence or collect it as a hobby. Purchasing physical gold is also a self-directed investment option. However, the forms of gold you own determine its value.

Gold bullion provides the highest return on investment, while jewelry varies in value. There are also specific reporting requirements for different types of gold.

You may not regain your initial investment depending on the type of physical gold you own. It’s essential to ensure you carefully choose the best time to sell your physical gold. Otherwise, you could encounter untrustworthy dealers and get a price lower than the market value.

Many physical gold investors purchase insurance for their investments. Buying and selling gold is a lengthier process than using a gold IRA. You need to perform extensive research to ensure your selling process goes smoothly.

Benefits of a Gold IRA vs. Physical Gold

There are many benefits to owning a gold IRA vs. physical gold. While there are tax benefits with a gold IRA, you’ll notice that physical gold investments come with fewer financial obligations.

Gold IRA Benefits

Gold IRAs benefit beginner investors and those with long-term goals. Because you don’t have complete control of your investments, building significant storage of funds is more manageable.

  • Currency flexibility: Gold IRAs allow you to invest in other options, such as cryptocurrency or alternative precious metals. Some offer unique options like real estate.
  • Custodial management: You don’t have to handle your investment paperwork. Custodians facilitate disbursements and make having an investment account stress-free. They also have ample insurance to protect your funds.
  • Long-term solution: Investors looking to hold funds long-term find gold IRAs ideal as it’s possible to incur withdrawal fees.
  • Tax benefits: Like traditional IRAs, you get the same or similar tax benefits, like deductions.

Physical Gold Benefits

Physical gold also has its benefits. Because there are no custodial entities, you face fewer fees and fewer limitations. Other benefits include:

  • Personal storage options: Gold bullion requires safe physical storage locations, whether that’s a bank safety deposit box or underneath a floorboard in your home. This security is a benefit you don’t experience with a gold IRA. If you’ve invested in gold, you likely already have a safe storage location.
  • Many forms: Physical gold comes in many forms, including bars, bullion and other coins, and jewelry. The various forms result in different pricing scales. Typically, gold bars and bullion offer the highest return but incur higher taxes because they are collectible.
  • Ideal short- or long-term investment: Physical gold makes a good investment as it doesn’t depend on a distribution schedule or incur fees if you withdraw before a certain point. Selling assets can be fast and easy.
  • Fewer fees: Although you’ll still pay significant shipping fees to sell and buy gold bullion, there are fewer fees when using personal storage facilities than when using a gold IRA.

Costs of a Gold IRA vs. Physical Gold

Gold prices aren’t the only thing you’ll spend money on when investing. Regarding a gold IRA vs. physical gold, both have costs for shipping, handling, and securing investments.

Gold IRAs incur more costs than traditional IRAs as investments must go to a trustee. The physical characteristics of this investment method mean you’ll pay for secure shipping and handling. Depending on the gold IRA and custodian you use, you may incur additional costs for the account startup or encounter fees with each transaction.

You’ll also pay shipping and handling costs for physical gold. Many investors insure physical gold for shipping and storage purposes, but it’s optional. However, storage costs could increase depending on your method.

Tax Benefits of Investing in a Gold IRA vs. Physical Gold


There are significantly more tax benefits for a gold IRA vs. physical gold. As with other IRAs, gold IRAs offer tax-deductible benefits and have lower tax rates than collectible physical gold.

Physical gold also has certain tax benefits and requirements. The government treats bullion and other physical gold assets as collectible, rendering them taxable.

You could incur different tax rates depending on when you sell these investments. Higher tax rates go to investors with assets sold after one year of purchasing. Some physical metals require reporting immediately after purchase, while others require reporting during tax season.

Storage Options

When you buy gold IRA vs. physical gold, you have multiple storage options for your IRA funds. Consider the following options.

  • Segregated storage: Segregated storage is an individualized, organized storage option that allows custodians to store your assets in a specific account with your name.
  • Commingled storage: Your custodian stores your precious metals with the segregated method but in a commingled area. You receive similar metals with the same value upon selling.


It is important to find the best precious metals investment methods that works for you.  If you need to learn additional ways to get started in metals, you can visit our article: Best Way to Invest in Gold and Silver for Beginners: 5 Different Paths.