retirement

Can retiree buy gold coins without trustee?

Don TaylorQuestionDear Dr. Don,
I am a 66-year-old retiree, and am now taking monthly individual retirement account distributions. I would like to purchase gold coins with some of my IRA funds.

At my age, can I withdraw from my regular IRA money market and purchase and physically possess coins without having to utilize a "holding agent"? Also, what are the tax implications?
-- Mike Midas

AnswerDear Mike,
When you take distributions from a traditional IRA account after age 59½, the distributions are taxable income. If you made nondeductible (after-tax) contributions to the account, however, you don't pay income tax on the distributions considered to be a return of those nondeductible contributions.

See IRS Publication 590, "Individual Retirement Arrangements," or your tax professional for more information on the taxation of distributions out of an IRA.

The distributions you receive are money to you and don't have to be held by a trustee or custodian. You can buy gold coins and put them in a safe-deposit box. You would want to check out the insurance available to you on the safe-deposit box or with a personal-articles floater on your homeowner's insurance policy.

If you are just reinvesting the distributions from your IRA into alternate investments in a taxable account, why take the distributions now? Required minimum distributions, or RMDs, out of an IRA don't start until the year you turn 70½. You can keep the money invested tax-deferred until the RMDs kick in. Bankrate has a required minimum distribution calculator to help you when the time comes to calculate those distributions.

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