Gold IRAs come with several drawbacks worth weighing. They typically carry higher fees than traditional IRAs, including setup costs, annual custodian fees, and storage fees for the physical metal, since the IRS requires an approved depository rather than home storage.
Gold generates no dividends or interest, so returns depend entirely on price appreciation. Liquidity can also be an issue, as selling physical gold usually takes longer than selling stocks or bonds. Additionally, gold IRAs often require a specialized custodian, limiting your investment options compared to standard retirement accounts.
Contribution limits and required minimum distributions still apply, and taking physical possession before retirement age can trigger taxes and penalties. Finally, gold prices can be volatile in the short term, despite its reputation as a stable asset.