To invest IRA funds in gold, you must set up a self-directed IRA, a type of IRA that the investor manages directly and that is allowed to own a wider range of investment products than other IRAs. Gold IRA rules require that you store eligible precious metals with a national depositary, bank, or IRS-approved trustee. Your custodian bank can refer you to an approved institution and process the gold transfer as part of setting up your Gold IRA. Gold IRAs are a special type of self-directed IRA that allows you to invest in physical gold and other precious metals, such as silver, platinum, and palladium.
Investing in a gold IRA requires the services of a custodian bank, a broker to purchase gold, and an approved depositary to store gold. Like other self-directed IRAs, Gold IRAs can be Traditional or Roth. Additionally, if the IRS determines that the day your IRA gold entered your home was the “distribution” date, you could end up paying additional penalties and back taxes owed from the time it was distributed. Once you’re 59½ years old, you can liquidate the precious metals in your self-directed IRA for cash or take physical possession of your gold and silver without penalty.
Annual fees are generally charged by the account custodian, and storage and insurance fees are more often owed to the custody account than to the Gold IRA company. Unfortunately, most Gold IRA companies don’t have a good record of fee transparency on their websites, so finding out the details may require a phone call or two. If you just want to buy gold or silver, here’s what you need to know about buying gold outside of an IRA. Gold IRAs follow the same general rules as traditional IRAs when it comes to tax benefits (traditional or Roth), contribution limits, and payout rules.
Despite the colloquial term “gold IRA,” you can hold silver, platinum, and palladium in this account. People who believe that physically owning gold or other precious metals is safer can achieve that peace of mind with a gold or silver IRA. Storing your IRA gold at home can be considered a distribution, meaning you lose your tax-deferred benefits and could be punished with a fine if you’re under 59½ years of age. It should be emphasized that a gold IRA is only necessary if an investor wants to invest in physical gold bars, coins and gold bars.
Make sure you check the list of approved gold objects with your custodian manager before you transfer gold to your IRA. IRS rules allow funding a Gold IRA with funds from another IRA, 401 (k), 403 (b), 457 (b), or Thrift Savings Plan. They sell gold coins, gold bars, and the like, but they don’t offer IRA investment advice (regardless of what their websites or other marketing materials might suggest). It’s important to be aware of all costs and expenses before you buy physical gold to keep in an IRA.
Buying gold in an individual retirement account (IRA) is touted as a way for savers to diversify their investments.