Adding precious metals to your IRA account can be game-changing for an investor as it provides more diversification to your portfolio. However, there are stringent regulations and rules regarding which precious metals are allowed in an IRA.
The IRS has laid out crystal clear rules for the purity of the metals and which metals can be allowed in an IRA.
The minimum purity levels required for each precious metal allowed in IRA are listed down below:
| Precious Metal | Required Purity Level |
|---|---|
| Gold: | 99.5%+ |
| Silver: | 99.99%+ |
| Platinum: | 99.95%+ |
| Palladium: | 99.95%+ |
Currently in 2022, the following gold, silver, palladium, and platinum coins and bars are safe to be part of your retirement investment portfolio.
Popular Precious Metals & Coins Not Allowed In IRA
The list below contains the name of bars and coins which may be popular but are not eligible for IRA investing. These are very popular amongst collectors and precious metal investors. If your retirement advisor or precious metal dealer recommends you any of the following coins/bars (for IRA investing), then steer clear of them.
- Chilean Peso
- Columbian Peso
- Chinese Panda coins
- French Napoleon coins
- Israel Tower of David coins
- USSR Chervonet coins
- Somalia Elephant coins
- U.S. Liberty coins
- Dutch Guilder
- Hungarian Korona
- French Franc
- Italian Lira
- German Mark
- South African Krugerrand
- Mexican Peso and Onza
- Swiss Franc
- British Brittania (pre-2013)
- Belgian Franc
- British Sovereign
- Austrian Corona and Ducat
Collectibles Are Ineligible For An IRA
Although collectible coins are a good investment, they cannot be part of your IRA. You are held responsible for storing these coins and they are not approved by the IRS, mostly because of their usually low purity levels. And it is difficult to assess the value of a collectible accurately.
There are also consequences of purchasing unapproved coins/bars, the IRS is likely to consider it a withdrawal and you might be charged a 10% penalty if you are under 59.5 years of age.
Pre-1933 gold, 90% US silver coins, and gold Krugerrands are not IRA-Approved as well.
Frequently Asked Questions
Why should I opt for IRA-Approved Precious Metals over cheaper alternatives?
You can only use eligible coins and bars in an IRA. Any other coins/bars cannot be legally used and you might be fined by the IRS if you try to do so. Purity is also a factor, so cheaper alternatives (like 90% US silver coins) are not allowed in an IRA.
Can I use physical gold for my IRA?
Yes.
My dealer wants me to invest in collectible coins for my IRA, what should I do?
If your dealer asks you to buy collectible coins to “diversify” your portfolio, then please avoid them at all costs. They are a scammer. As the IRS does not allow collectible coins in an IRA.
Is there a penalty for using ineligible precious metals in an IRA?
There are consequences for purchasing unapproved coins/bars, the IRS is likely to consider it a withdrawal and you might be charged a 10% penalty if you are under 59.5 years of age.