Individual Retirement Account (IRA)

An individual retirement account is a US tax-advantaged account for retirement savings. Traditional IRAs defer tax until withdrawal, while Roth IRAs are funded with after-tax dollars and grow tax-free. Recent annual contribution limits have been $7,000, or $8,000 for those 50 and older, and self-directed variants can hold alternative assets including precious metals and bitcoin.

Why it matters

The IRA wrapper changes the after-tax math of long-term holding dramatically, since decades of gains compound without annual tax drag. For hard-asset investors the details are specific. IRS rules allow IRAs to hold gold only through a qualified custodian and only in approved forms, generally bars and coins of at least 99.5 percent purity, with the American Gold Eagle carved out as an exception; storing IRA metal at home does not qualify. Bitcoin can be held through self-directed IRA providers or, since January 2024, through spot bitcoin ETFs inside an ordinary brokerage IRA. Custodial and storage fees for these structures run higher than for conventional funds, so cost comparison matters.

In the gold vs bitcoin debate

The IRA question exposes a shared irony: two assets prized for self-custody must be handed to custodians to gain tax advantages. Gold in an IRA sits in an approved depository the owner may never see; bitcoin in an IRA is keys held by a provider or shares of a fund. Purists in both camps keep tax-advantaged exposure in the wrapper and bearer-asset holdings outside it, treating the two as different tools for different risks. As always with retirement accounts, the rules are detailed and change periodically, so current IRS guidance governs.