How to Avoid Gold IRA Scams

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Investing in a Gold IRA can be a great way to diversify your portfolio and protect your assets. However, there are some unscrupulous people in the industry who are looking to take advantage of those who don’t know how the process works. Here’s what you need to know about Gold IRA scams so you can avoid them.

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Gold IRA scams you need to know

No one wants to be scammed when investing their hard-earned money. Unfortunately, investment scams are all too common. To protect yourself, it’s important to know how to recognize a scam if you encounter one. Here are some of the most common Gold IRA scams out there.

1) Risk-risk and guaranteed profits

One of the most common Gold IRA scams is when a company promises guaranteed returns. No matter what type of investment you are making, it is always important to remember that there is no such thing as a guaranteed return. If a company is promising risk-free guaranteed profits, it is probably too good to be true and should be avoided, especially if they’re resorting to bully tactics to get you to sign up with them.

2) Lack of transparency

Another common scam involves companies that charge exorbitant fees for setting up and managing your Gold IRA account. While it is normal for companies to charge fees for their services, make sure that you read the fine print carefully before signing any contracts or agreeing to any terms with a company. Be aware of any hidden or extra fees that may be included in the contract.

3) Bait and switch scam

Beware of any company that is pressuring you to make a decision quickly or enticing you with promises of quick and easy profits. Occasionally, you may see a deal that seems too good to be true, but when you’re signing up with their program, they may ask for more money than originally agreed upon or convince you to buy something else. These schemes are often referred to as “bait and switch” scams, and their goal is to force you into their programs before you fully realize what’s going on. If a company seems too good to be true, it probably is. 

Augusta Precious Metals

4) Counterfeit coins scam

Be aware of any companies that are selling counterfeit coins at inflated prices. Counterfeit coins are often made from inferior metals and are not worth the money they are asking for. If a company is selling coins that seem too cheap, do your research to make sure that the coin is authentic before making any purchase. 

Also, make sure that the companies you’re working with are located inside the United States. Most companies that sell counterfeit coins are not located in the US, making it hard for law enforcement agencies to track them down. Essentially, they’re not held accountable for any losses you incur due to their fraudulent behavior because they’re out of the country. 

counterfeit coins

5) Home storage Gold IRA's

Much like IRA-ineligible gold, any company that is offering a “home storage” gold IRA is likely to be running a scam. IRS rules dictate that only certain custodians are allowed to hold gold IRA assets, and home storage is not one of them. Any company that is telling you otherwise is likely running a scam and should be avoided. 

6) Gold that is not IRA-Eligible

Make sure that any gold you purchase is eligible for an IRA.

In order for a gold bar, coin, or round to be deposited into an IRA, it must have a purity of at least 0.995%. Additionally, only certain types of bars and coins are eligible, so be sure to do your research before purchasing, otherwise, you may end up with a product that does not qualify and lose out on potential profits.

Make sure that you also understand that “high collector value” gold coins do not exist for IRAs, so don’t let a salesman tell you otherwise. The only thing that matters is the purity of the gold.

Gold IRA

And many more...

While these are some of the most common Gold IRA scams out there, it is important to remember that there are many other types of scam operations out there like false endorsement claims, unsuitable rollovers, and Ponzi schemes. Whenever doing business with any business, it is important to do your research and make sure you are dealing with a reputable and trustworthy company.


5 ways to avoid Gold IRA scams

Gold is a valuable commodity, and because of that, it has been the target of many scams over the years. If you are looking to invest in gold through a Gold IRA, here are 5 tips on how to avoid gold IRA scams.

1) Research companies thoroughly before investing

Make sure you investigate the reputation and track record of any potential companies you are considering working with. Be sure to read reviews and customer testimonials, and make sure you understand their fees and any other costs associated with the investments.

You can also make sure they are reputable by checking their Better Business Bureau rating and reading customer reviews online. You should also check with the US Mint or other government agencies responsible for regulating precious metals investments for any warnings about fraudulent activity or complaints against the company or individual broker.

Birch Gold Group

2) Be weary of 'too good to be true' offers

If a company is offering you an investment opportunity that seems too good to be true, it probably is. Be suspicious of any companies that offer overly generous returns with little to no risk.

3) Know your investment options

One of the most important steps in avoiding gold IRA scams is understanding what options are available to you when investing in gold. Make sure you understand the IRS rules, as well as which types of gold, are allowed in an IRA.

4) Understand the fees and costs involved

Scammers often prey on people by trying to pressure them into making quick decisions. Be wary of any company that pressures you into making an investment decision. Reputable companies will be happy to answer all your questions and give you the time you need to make an informed decision. If a company is trying to rush you or refusing to answer your questions, it is probably best to stay away from them. 

Account Setup

5) Don't be rushed

Gold investments come with costs such as commissions, storage fees, and taxes that must be considered when making an investment decision. Make sure that all costs associated with your investment are clearly outlined before entering into a contract or agreement with a broker or company.

Ask questions about any costs that seem excessive or unexplained, as this could be an indication of fraud. Be aware of hidden fees such as administrative charges or maintenance fees that may not be disclosed until after the purchase has been made.

American Hartford Gold

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By staying alert and doing your due diligence when investing in gold, you can protect yourself from gold IRA scams and ensure that your investments are secure. Be sure to research any companies or brokers you are considering working with thoroughly, understand the fees and costs associated with each investment option, and never be rushed into making a decision. By following these guidelines, you can make sure that your gold investments are safe and secure.

Our Gold IRA Company Recommendation

We recommend Augusta Precious Metals as the top Gold IRA company to work with. 

Augusta Precious Metals has a highly trusted name in the gold investment industry, with an A+ rating from the Better Business Bureau, as well as a AAA rating from the Business Consumer Alliance, and loads of reviews from satisfied customers.

They can help you move an existing registered plan into an IRA, as well as set up a new one. Augusta Precious Metals team members are always there to answer your questions and concerns, and to help you pick the right precious metals that will suit your needs. With your personal financial goals in mind, the Augusta Precious Metals team ensures a smooth and clear transfer process with no additional IRS fees.

Augusta Precious Metals offers a wide variety of precious metals so that you can diversify your portfolio with a selection of gold and silver bars and coins. As you work your way towards retirement, continue to add to your IRA each year to grow your wealth.

We are confident that you’ll choose Augusta Precious Metals as your top pick as well. Visit the Augusta Precious Metals website today and fill out their application form to begin the process in setting up your IRA. You’ll be happy you did!

Augusta Precious Metals

Frequently Asked Questions (FAQ)

A Gold IRA is an example of a Self-Directed IRA. Self-Directed IRA’s were designed to give individuals more freedom in the selection of investments that they could hold in their retirement account. A Gold IRA is unique to precious metals, where the investor/individual has the ability to hold gold, silver, and other precious metals such a platinum and palladium in their account rather than being limited to traditional stocks and bonds.

By holding precious metal investments in a Gold IRA, this gives the ability for individuals to make their portfolio more diverse and prepare themselves for future financial success. Having a diversified portfolio makes for a better chance to survive a stock market crash and still have some of your funds held in other categories, such as gold.

There are various options when it comes to investing in gold. One option is to purchase gold coins or bars from a local retail shop or gold investment company. You may then hold the metals until you are satisfied with their growth, ready for retirement, or need them for another expense. 

Another option to invest in gold is by setting up a Gold IRA. These are a form of a Self-Directed IRA, only your funds can be held in gold rather than stocks and bonds. This is a good way to invest in precious metals without worrying as much about taxes.

The value of a gold coin increases as the value of spot gold increases. The number that is printed on each gold coin (known as the face-value) is not an accurate reflection of its true valuation. In fact, its value is likely much higher than the face-value based on the current price of gold today.

Depending on your age, current financial position, and personal preferences, the answer to this question will vary per person. If you are coming up on retirement, you’ll want to take fewer investment risks and may not want a large portion of your money in gold. If you’re still young and have more time to take greater investment risks, you may want a larger percentage of your portfolio invested into gold. 

Like many investments, it is optimal to buy at a low value. Generally speaking, when the stock market is over-performing, the value of gold is at a much lower amount. Gold also follows some trends such as a decrease in certain months of the year, including January, March, and April.

It is always a good idea to seek out a financial advisor to help discuss the best options for your current situation. This way you can shift your investments based on what makes the most sense for your financial goals, and the current economy.

Your current plan may not give you the option to invest in gold, but there are numerous other plans that allow gold investments. Keep in mind that there are specific rules set out by the IRS regarding how gold can be bought and stored. Because of these rules, it’s important to find a reputable company to work with.

You are legally allowed to do a 401(k) rollover and avoid paying taxes and penalties, but to do this you must follow the correct process. Start by contacting your current 401(k) plan and explain your situation. The rollover may take several weeks or months to complete, so it’s best to begin as soon as possible.

Traditional 401(k) plans and IRA’s are tax-deferred savings accounts, meaning you do not need to pay any taxes on your contributions. Once you retire and eventually withdraw your funds, you will pay taxes on those withdrawals. You will not get any tax breaks if you purchase gold for personal ownership. Right now, the only way to avoid paying taxes on gold is by purchasing it through your 401(k) plan or IRA.

Although this process is a bit tricky, you absolutely can purchase physical gold in your 401(k) plan. Since your IRA cannot be the seller and holder of the gold, they will need to store the physical gold with a third party. You are also not personally allowed to hold the gold. You may only keep gold and silver in a plan of this type if someone else is storing it, according to the IRS. While you will not be allowed to have physical control over the gold, you may still be allowed to access the storage facility.

Yes, any gains made on the gold held in a Gold IRA are subject to capital gains taxes. Additionally, if you take a distribution from the Gold IRA before you reach the age of 59 and a half, you may be subject to income taxes and a 10% early withdrawal penalty. Things may differ depending on whether you have a traditional IRA or Roth IRA.

No. You are not allowed to take physical possession of the gold or other precious metals held in an IRA account. 

No. Home storage is not allowed and could have serious tax implications if you are found to be taking physical possession of the gold held in your IRA. You must store the gold with an IRS-approved custodian. Any company that promotes home storage is not providing sound advice and should be avoided. 

No. The IRS does not allow precious metals to be stored in a safe deposit box. The custodian/depository must always maintain possession of the gold.

This is a tricky question. 

Mostly, no. For most folks, it’s impossible to take physical possession of their gold without paying severe fees.

There is however a workaround for very (VERY) few individuals. 

A “Checkbook IRA” allows the IRA owner to have more control over their investments. They can use an LLC to make investment decisions and hold assets on behalf of the IRA. The LLC is owned by the IRA and managed by the IRA owner or someone else. The assets, including precious metals, can be stored in a place chosen by the LLC, like a storage facility or the IRA owner’s home as long as it’s secure and insured. Though, the IRS has strict rules for using a Checkbook IRA and storing IRA-owned assets. 

Some of these rules include:

  • A minimum net worth of $250,000.
  • Must have a corporate legal counsel.
  • Ownership must be shared among multiple individuals.
  • And much more

Keep in mind that this loophole is not recommended. There is a possibility that you will be penalized and even possibly disallowed from future investments. It’s not worth the risk, even if you do meet all these requirements. 

Remember that your specific situation and goals should always be discussed with your tax advisor.