Choosing your Gold IRA company is the first step to opening your IRA. If you decide to invest in a precious metals IRA, you should do so conservatively. Depending on your financial situation, most experts recommend investing no more than 5 to 10% of your retirement savings in precious metals. Acceptable products that meet these criteria include Canadian Maple Leaf coins, Australian Koala investment coins, and PAMP Suisse bars.
The IRS also allows American Eagle coins even though they don’t meet the 99.5% purity standard for gold. You can’t currently hold rare or collectible coins, Swiss francs, British government bonds, and German marks in a self-governing IRA. You’ll also need to choose a precious metals dealer who will make the actual gold purchases for your IRA (your custodian may be able to recommend one for you). If you’re not sure whether a gold IRA or physical gold is best for you, check out my article that explains the differences as well.
Many of the leading gold IRA companies have similar fee structures, but they can vary by a few hundred dollars per year. However, instead of holding paper assets such as stocks and bonds, the Gold IRA is intended to hold physical gold bars, i.e. coins or bars made from gold and other approved precious metals, including silver, platinum, and palladium. If you need advice, you should contact a trusted advisor instead of relying on representatives from the Gold IRA company. Opening a self-directed IRA and investing in precious metals is a bit more complicated than opening a traditional IRA or Roth IRA.
You can transfer all or part of the balance to fund a Gold IRA with no tax liability, as long as you complete the rollover within 60 days. Surprisingly, a gold IRA doesn’t just have to hold gold, you don’t have to hold any gold in one at all. In fact, Augusta Precious Metals, one of the best gold IRA companies, specializes in helping people make just that choice. They also perform the necessary administrative functions to ensure that your Gold IRA complies with all IRS regulations.
Another alternative is a gold ETF, an exchange-traded fund that tracks the performance of gold as an asset. To comply with the many regulations surrounding gold IRAs, you can’t store your gold at home or in a safe deposit box. As with other retirement accounts, if you withdraw gold from your IRA before you turn 59½, you must pay income tax on the value of the gold, plus a 10% upfront withdrawal penalty. A self-managed IRA offers the same tax benefits as a traditional IRA, but allows you to hold precious metals and other alternative assets in accordance with IRS regulations.
There are minimum requirements for the fineness or purity of metals, as well as regulations on the size, type, and weight of your IRA gold. To avoid the possibility of having to pay taxes and penalties, your Gold IRA company can process the transfer on your behalf.
