> > Gold IRA Rollover Guide: Step by Step [2024 Update]

Gold IRA Rollover Guide: Step by Step [2024 Update]

Many or all of the products featured on this page are from our sponsors who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here is how we make money.


The information provided on this page is for educational purposes only. The Modest Wallet is a financial publisher that does not offer any personal financial advice or advocate the purchase or sale of any security or investment for any specific individual.

Gold has long been regarded as the ultimate safe haven during times of economic turmoil and high inflation, owing to its historical use by countries to support the value of their currencies. 

With the financial industry’s widespread adoption of technological advancements, investing in gold has become easier than ever.

This article tells you everything you need to know about how to rollover an existing retirement account to a self-directed IRA that will let you purchase various precious metals, including gold.


What Is a Gold IRA?

A Gold IRA is a tax-advantaged investment account designed specifically to invest in gold and other precious metals directly to build a retirement fund.

Unlike traditional investment accounts, a Gold IRA allows investors to purchase physical gold, thereby eliminating the need to rely on financial vehicles such as exchange-traded funds (ETFs) or mutual funds to gain exposure to the precious metal. It is worth noting that Gold IRAs are also known as Self-Directed IRAs or Precious Metals IRAs.

The primary reason why investors opt for opening a Gold IRA is that traditional investment accounts, such as 401(k)s and regular IRAs, do not typically allow the purchase of physical precious metals. 

As such, a Gold IRA gives investors the flexibility to select the financial asset they wish to incorporate into their portfolios, with the aim of growing or safeguarding the value of their retirement funds over time.

In addition, in the same way as regular IRAs, Gold IRAs are available in both Traditional and Roth versions, which support different tax treatments and limits for contributions.

Google Trends — interest of gold IRAs over time
Source: Google Trends — interest of gold IRAs over time

How Gold IRAs Work

If you are unfamiliar with what Gold IRAs are, in this section, we will be sharing further information about the origins of this type of account and how investors can benefit from opening one to incorporate precious metals into their portfolios.

Understanding Self-Directed IRAs

Self-directed IRAs were instituted in 1974 with the passing of the Employee Retirement Income Security Act (ERISA). Their purpose was to give workers more control over how they invested their retirement funds.

A Self-Directed IRA — also known as an SDIRA — is a type of tax-advantaged investment account that give investors ampler choices in terms of the financial assets they can add to the portfolio. 

They are mostly used to incorporate the so-called alternative assets.” This group includes securities that are not listed in a traditional exchange. Some of the most common “alts” are real estate, hedge funds, precious metals, cryptocurrencies, fine wine, art, and collectibles.

These are some of the benefits of SDIRAs:

  • Greater portfolio diversification.
  • More freedom to choose which assets make up the retirement portfolio.
  • The portfolio’s earnings can keep growing without paying any taxes until retirement age.
  • The contribution limits are the same as a regular IRA.

Understanding Gold IRAs

The following is a summary of the key characteristics of the three types of self-directed individual retirement accounts (SDIRAs) available nowadays.

  • Traditional Gold IRA: Contributions on these types of accounts are made on a pre-tax basis, and earnings grow tax-deferred. Withdrawals for these accounts are taxed as ordinary income, and the required minimum distributions (RMDs) must begin at age 72. Early withdrawals before age 59 1/2 may be subject to a 10% penalty. Contributions may be tax deductible, depending on income and participation in an employer-sponsored retirement plan.
  • Roth Gold IRA: Contributions are made on an after-tax basis, and earnings grow tax-free. Qualified withdrawals are tax-free, and contributions may be withdrawn at any time without penalty. There are no RMDs during the account owner’s lifetime. Early withdrawals of earnings before age 59 1/2 may be subject to a 10% penalty, and contributions are not tax-deductible.
  • SEP Gold IRA: These accounts are available to self-employed individuals and small business owners. Employer contributions are made on a pre-tax basis and are tax-deductible for the employer, and earnings grow tax-deferred. Withdrawals are taxed as ordinary income, and RMDs must begin at age 72. Early withdrawals before age 59 1/2 may be subject to a 10% penalty. Contributions are not subject to income limits, and employer contributions must be made equally to all eligible employees.

Understanding Funding Options for Gold IRAs 

There are two ways to fund a Gold IRA — by making a cash deposit or transferring the funds from an existing retirement account. In this section, we share further details about all the possible funding methods.

Cash Contributions

The simplest and easiest way to open and fund a Gold IRA is to make a cash deposit. However, investors must make sure that they do not go over the contribution limits set by the Internal Revenue Service (IRS) every year or may otherwise face a penalty.

As of this year, the maximum amount that can be deposited into an IRA is $6,500 per year. In addition, investors who are 50 years old or older can deposit an additional $1,000 per year as catch-up contributions. 

Rollovers

Gold IRAs can be funded by rolling over the assets and cash contained in another type of retirement account, such as 401(k). Rollovers have to be reported to the IRS, and they are performed by account administrators on behalf of the beneficiary as per their instructions.

There are two types of rollovers. Direct rollovers occur when the administrator arranges the transfer of the assets with the Gold IRA trustee and performs all the required actions to execute the operation. No funds are withheld, and there are no tax implications.

Meanwhile, indirect rollovers occur when the account administrator issues a check that the account holder must deposit with the Gold IRA trustee within the next 60 days. If that due date is exceeded, there will be penalties and tax implications. In addition, a percentage of the account’s balance will be withheld and has to be claimed by the investor in their next tax return. 

Transfers

A transfer occurs when the assets held within an IRA are moved to another account of the same type but administered by a different financial services company. This is the case, for example, when the funds in a regular IRA are sent to a self-directed IRA. 

Transfers are made by the account’s administrator at the request of the holder. An investor can transfer a portion or the entire balance of the former IRA to the new account. The main difference between rollovers and transfers is that in the latter case, the investor never takes possession of the assets.

Precious Metals Available On Gold IRAs

Most Gold IRAs give investors the chance to purchase other precious metals for the account. As per the IRS, the only precious metals that can be added to an SDIRA are gold, silver, palladium, and platinum.

In the case of gold and silver, the IRS demands a purity of 99.99%, while for platinum and palladium, the minimum purity is slightly lower at 99.95%. These metals are commonly bought in the form of coins and bars that are minted by highly reputed manufacturers.

In this regard, the IRS rules establish that all of the precious metals bought for an SDIRA must come from providers that are certified by reputed exchanges, such as the New York Mercantile Exchange (NYMEX) and the Commodities Exchange (COMEX).

In addition, to qualify to be added to an SDIRA, a coin has to be stored in its original package, be accompanied by its corresponding certificate of authenticity, and come in perfect condition.

CME Group — NYMEX
Source: CME Group — NYMEX

Gold IRA Storage Rules

The IRS also imposes rules on how the assets contained in an SDIRA have to be stored and by who. In this section, we explain the two types of storage permitted by the agency.

  • Commingled: Commingled storage refers to the practice of storing precious metals owned by multiple account holders in a single container or vault. Even though the assets are appropriately identified and segregated within the container, the fact that they are held in the same place reduces costs for investors. This alternative is considered the less liquid of the two as it takes longer to be able to withdraw the metals physically if needed.
  • Segregated: Segregated storage means that the assets held within the Gold IRA are stored separately from those of other account holders. This means that the investor will be assigned a separate vault or safety deposit box that he/she will easily have access to if needed. As a result, this option is considered the most liquid of the two.

Benefits of Gold IRAs

Gold IRAs are a great way to have more freedom when saving for retirement, as this type of self-directed IRA allows investors to incorporate other types of assets into their portfolios. Here, we explain the top advantages of opening this type of account. 

Tax-Deferred Growth 

The investments made through a Gold IRA will increase over time at a faster pace than they would in a regular taxable account, as no taxes have to be paid on realized gains. This is possible due to the tax-advantaged status of SDIRAs, and it is what makes these accounts so attractive to investors.

Down the road, through the magic of compound interest, the resulting taxes applicable to the account’s realized gains will be reinvested, and the proceeds will contribute to keep growing the account’s balance.

Tax-Free Withdrawals

Withdrawals are treated differently depending on which type of SDIRA the investor selects. When it comes to Traditional IRAs, the contributions made to the account are considered pre-tax deposits. 

To avoid penalties, investors can withdraw money from these accounts once they reach retirement age. The applicable taxes on both the earnings and contributions will have to be paid at that time.

Apart from these, investors can also withdraw money penalty-free from an IRA for qualified medical expenses or if they are planning to buy their first home, in which case they are allowed to extract $10,000 from the account without being subject to the applicable 10% penalty.

Meanwhile, when it comes to Roth IRAs, contributions are treated differently as they are considered after-tax deposits. As a result, investors can, at any given point in time, withdraw their contributions (not the earnings they have produced) without paying any taxes on them. The other scenarios explained above for penalty-free withdrawals also apply to Roth IRAs.

Costs and Expenses Associated with Gold IRAs

Self-directed IRAs operate slightly differently than regular ones due to the distinct characteristics of the assets that are typically added to them. Therefore, the fees and costs associated with opening, funding, and maintaining these accounts are different compared to the regular version and, in most cases, higher.

Here’s a breakdown of the usual costs and expenses to consider if you want to open a Gold IRA.

  • Retirement Account Setup Fees: Some Gold IRA providers may charge investors a one-time setup fee when opening an account. This fee typically covers the cost of all the paperwork involved in transferring the assets from one account to the other. The fee may start at $50 but could be as high as $500 with some providers.
  • Custodian Fees: A custodian or trustee is the entity appointed and authorized by the account holder to arrange and execute all of the necessary procedures to purchase, store, and sell the assets held within the Gold IRA. Most custodians charge an annual management fee for their services that could vary from $100 to $300.
  • Storage Fees: Storage fees are charged by the depositories that provide their services to account holders to store their valuable assets. These institutions require that all investors open an account with them and may charge different fees depending on the type of storage selected — commingled or segregated.  Storage fees vary depending on the size of the account but may range between $100 and $150 per year for regular accounts. They may also charge additional fees for every new incoming batch of precious metals. Moreover, same as custodians, some depositories may charge a one-time set-up fee when a new account is opened.
  • Seller’s Fees: Depending on where the precious metals come from, some sellers may charge a markup or fee for every purchase. This applies to the mints and refiners that produce the coins and bars that will be added to the Gold IRA. A markup is a certain percentage or fixed amount added to the precious metal’s original selling price. 
  • Cash-Out Fees: A cash-out fee is a one-time charge that investors have to pay if they intend to close the Gold IRA. This is typically a flat fee that may range from $50 to $250, depending on the provider. 
  • Other Fees: Aside from the ones mentioned above, investors may encounter some other fees when they open or fund a self-directed IRA. One of those is shipping fees for all precious metal purchases, wire transfer fees when depositing money from a bank account or a separate retirement account, and insurance fees charged by the depository institution or the company handling the shipment of the precious metals.

Overall, most estimates indicate that opening and maintaining a Gold IRA may cost somewhere between $300 and $500 per year, excluding shipping costs.

Gold IRA expenses, costs and fees
Source: © The Modest Wallet — Gold IRA expenses, costs, and fees

What Is a Gold IRA Rollover?

A rollover is an operation that involves the transfer of the funds held within a different type of retirement account, such as a 401(k), to a Gold IRA or in which case the account holder takes possession of the assets held in the old account temporarily.

These rollovers are typically performed when the investor is no longer working for the employer that originally sponsored the retirement account or if they want to have more choices when it comes to the assets they can incorporate into the retirement account.

Gold IRA Rollover vs. Gold IRA Transfer

To fund a Gold IRA, investors can engage in two types of operations — a rollover or a transfer. To appropriately categorize the transaction, the point of origin of the assets and how they will be sent out to the new Gold IRA provider must be considered.

Gold IRA Rollover

A rollover occurs when an investor wants to take money out of a retirement account to fund a new one. This can occur between different types of accounts, such as 401(k) to Gold IRA rollovers, or between the same types of accounts, like Gold IRA to Gold IRA rollovers.

In the case of a rollover, the account held with the previous provider is closed entirely, and the funds are handed out to the investor. To avoid penalties and tax implications, the investor must deposit the funds with a new administrator within the next 60 days.

If the transfer of the funds is performed by the old administrator, the transaction is categorized as a direct rollover. Meanwhile, if the investor is handed over a check with the proceeds of the retirement account, the transaction is considered an indirect rollover. As per the IRS rules, only one rollover is permitted per year.

Gold IRA Transfer

A Gold IRA transfer is an operation performed between the two administrators of the old and new accounts. The investor never takes possession of the assets held in the previous account, and all the paperwork is arranged between the two organizations.

This reduces the risk of penalties and tax implications when sending money and assets from one retirement account to another. Multiple transfers can be performed per year, although some fees may apply.

IRA transfers are often used when an investor wants to change their IRA provider, consolidate multiple IRA accounts into one, or switch from one type of IRA to another. The investor will initiate the transfer by filling out a transfer request form with the new IRA provider, who will then work with the original IRA provider to transfer the funds directly.


Types of Gold IRA Rollovers

As per the IRS, these are the three types of account rollovers that investors can choose from.

  • Direct Rollover: The plan administrator makes the payment directly to another retirement plan or IRA. No taxes are withheld from the transfer amount, and payment may be made in the form of a check made payable to the new account.
  • Trustee-To-Trustee Rollover: The financial institution holding the IRA makes the payment directly to another IRA or retirement plan. No taxes are withheld from the transfer amount.
  • 60-Day Rollover: The distribution is paid directly to the investor, and they have 60 days to deposit all or a portion of it into an IRA or retirement plan. Taxes may be withheld from a distribution from a retirement plan, so the investor must use other funds to rollover the full amount of the distribution. The investor is responsible for ensuring that the funds are deposited into the new account within 60 days to avoid taxes and penalties.
IRS Rollover Chart
Source: Internal Revenue Service (IRS)

IRA One-Rollover-Per-Year Rule

Starting on January 1, 2015, the IRS established a limit of one rollover from an IRA to another (or the same) IRA within a 12-month period.

This applies to all types of IRAs, including SEP and SIMPLE IRAs. However, there are exceptions to this rule, including rollovers from traditional IRAs to Roth IRAs, trustee-to-trustee transfers, and plan-to-IRA or plan-to-plan rollovers.


Types of Retirement Accounts That Qualify for Gold IRA Rollovers 

Not all accounts are eligible to be rolled over. In this section, we share further details about which accounts qualify to perform this type of transaction and what are their purpose and scope.

Individual Retirement Accounts (IRAs)

These are personal retirement accounts that individuals can open and contribute to on their own. There are two main types of IRAs: Traditional and Roth. Traditional IRAs allow pre-tax contributions that reduce taxable income while earnings grow tax-deferred until withdrawal.

There are also SEP IRAs, which can be used by self-employed individuals to build a retirement fund. The contributions made to these accounts are considered pre-tax, the same as with Traditional IRAs. 

Roth IRAs, on the other hand, allow after-tax contributions, but qualified withdrawals are tax-free. Contribution limits for IRAs are $6,500 per year for individuals under age 50 and $7,500 for those over 50 as of this year. IRAs can be rolled over into other retirement accounts, but there are limits on how often this can occur.

401(k)s 

These are employer-sponsored retirement plans offered by for-profit companies. Employees can contribute a portion of their pre-tax income to the plan, reducing taxable income, and employers may match a portion of the contribution. 

Contribution limits for 401(k)s are $22,500 per year for individuals under age 50 and $30,000 for those over 50 as of this year. 401(k) plans can be rolled over into other retirement accounts, but there are some restrictions and tax implications.

403(b)s

These are employer-sponsored retirement plans offered by non-profit organizations, such as schools and hospitals. They are similar to 401(k)s but have different regulations and contribution limits. 

Contribution limits for 403(b)s are $22,500 per year for individuals under age 50 and $30,000 for those over 50 as of this year. 403(b) plans can also be rolled over into other retirement accounts, but there are some restrictions and tax implications.

457(b)s

These are deferred compensation plans offered by government entities and some non-profit organizations. These plans allow employees to defer a portion of their pre-tax income into the plan, reducing taxable income. 

Contribution limits for 457(b)s are $22,500 per year for individuals under age 50 and $30,000 for those over 50 as of this year. 457(b) plans can also be rolled over into other retirement accounts, but again, there are restrictions and tax implications.

TSPs

These are retirement plans for federal employees and members of the uniformed services. They function similarly to 401(k)s but have lower fees and expenses. 

Contribution limits for TSPs are $22,500 per year for individuals under age 50 and $30,000 for those over 50 as of this year. TSPs are subject to unique rollover rules, which allow for rollovers into other retirement accounts, but not the other way around.

All of these types of accounts can be rolled over, but they are still subject to the rules imposed by the IRS for these operations. These rules include, among others, that only one rollover can be performed per year and that the funds coming from a previous retirement account must be deposited into the new one within 60 days to avoid being penalized.


How to Do a Gold IRA Rollover?

Now that we have discussed most of the details about what a rollover is, the rules established by the IRS to regulate these types of operations, and the fees involved when performing them, we will now provide a step-by-step guide for what needs to be done to complete a rollover.

Step 1: Open A Gold IRA Account

If you’re interested in opening a Gold IRA, the first step is to find a financial services company that offers this type of product. When choosing a provider, it’s important to consider several aspects of their services. 

These include the minimum deposit required, available investment products, customer support, educational resources, administrative fees, custodial and depository fees, and the types of rollovers they support.

To help you in your search, we recommend three companies: Augusta Precious Metals, Goldco, and American Hartford Gold. Each of these providers has been reviewed separately, allowing you to compare their fees and services in detail. By taking the time to assess your options carefully, you can find the best provider for your needs and ensure the smooth and successful execution of the rollover.

Augusta Precious MetalsAmerican Hartford GoldGoldco
Our Rating

4.7

4.5

4.6

Annual Fees$200 (waived for the first year)$175 – $225 (waived for the first year)Varies depending on custodian
Minimum Deposit50,000$10,000$25,000
Trustpilot RatingN/A5.0/5.04.8/5.0
BBB RatingA+A+A+
BCA RatingAAAAAAAA
TrustLink Rating4.9/5.05.0/5.04.8/5.0
Information KitPhysical KitPDFPhysical Kit
VerdictBest For TransparencyBest For Low Minimum PurchaseBest For Customer Service

Minimum Deposit

To open a Gold IRA account, most providers require a minimum deposit. The amount of the minimum deposit can vary from one trustee to the other, ranging from $2,000 to $50,000. The purpose of this minimum deposit is to ensure that the investor can buy enough gold for the account so the applicable administrative and other fees make financial sense. 

It’s worth noting that the deposit doesn’t have to be in cash necessarily. However, it’s often easier and cheaper to transfer cash to a new Gold IRA account to avoid paying higher fees if some of the assets transferred are stocks or bonds. These assets can typically be traded either for free or at a negligible cost with a larger brokerage firm.

Account Fees

Gold IRAs charge different types of fees compared to regular IRAs. Some Gold IRA providers may charge a one-time account setup fee, which can vary from $50 to $150. However, if the deposit is large enough, the provider may agree to waive this fee. 

Additionally, since the gold held in these accounts has to be stored at an IRS-approved depository, there are shipping and handling costs that apply to every gold purchase. 

Both the custodian and depository charge a fee for their services, and the Gold IRA provider commonly charges an annual administrative fee for their services as well. Before you open an account with any provider, make sure you understand the fees you will be paying per year and for every transaction you make.

Precious Metals Selection

The selection of products you can invest in is an important consideration when choosing a Gold IRA provider. Some companies offer access to gold bars only, which can make it difficult to deploy small amounts of capital.

In most cases, providers offer the possibility of buying 99.99% pure gold coins and gold bars minted by top-notch producers such as The Royal Mint, The Perth Mint, the New Zealand Mint, or the Royal Dutch Mint.

In addition to gold products, investors should be able to buy other precious metals with their Gold IRA, such as platinum and silver coins and bars. The ampler the catalog, the better.

Customer Service

Customer service is another important consideration when choosing a Gold IRA company. Look for a provider that offers multiple options for customers to contact representatives, including phone calls, support tickets, e-mail, and live chat. 

It’s also important to choose a provider that responds promptly to customers’ inquiries and concerns. Check the provider’s website for a comprehensive FAQ section that can help answer common questions. Additionally, consider the provider’s availability. Look for a provider that offers extended hours of operation to ensure that you can reach a customer service representative when you need assistance.

Security Features

The gold in your account must be stored in an IRS-approved depository, so it’s important to ensure that the depository has adequate security measures in place. Look for a provider that uses depositories with advanced security features such as 24/7 monitoring, armed guards, and high-tech surveillance systems. 

Additionally, the provider should have insurance policies to protect your investment in case of theft or damage. Finally, it should have a secure website and use encryption technology to safeguard your personal and financial information.

Reputation and Track Record

The best Gold IRA companies can showcase a decent track record of customer satisfaction and a history of successful transactions. The Better Business Bureau (BBB) is an excellent resource for checking a provider’s reputation. You can also use other sites like the Business Consumer Alliance, Trustpilot, and TrustLink.

Check the company’s BBB rating and read customer reviews to see what other people’s experiences have been like. Additionally, consider how long the provider has been in business. A trustee with a long history of successful operations is likely to be a more reliable choice than a younger entity. 

Finally, check the provider’s affiliations and certifications. Companies with affiliations to reputable organizations such as the Industry Council for Tangible Assets (ICTA) and the Professional Coin Grading Service (PCGS) are likely to be more trustworthy.

Augusta Precious Metals, Better Business Bureau
Source: Better Business Bureau

Step 2: Choose Between How Your Will Rollover Funds

There are three types of rollovers that can be performed, and, at this point, the customer must choose which one is the best alternative.

Direct Rollover 

A direct rollover is the easiest and most straightforward method of transferring funds from one retirement account to another. If you’re receiving a distribution from your retirement plan, you can ask your plan administrator to make the payment directly to another retirement plan or to an Individual Retirement Account (IRA). 

Your plan administrator may hand over your distribution in the form of a check made payable to your new account. It’s important to note that no taxes will be withheld from your transfer amount.

Trustee-To-Trustee Rollover

A trustee-to-trustee transfer is another easy way of transferring funds from an IRA to another IRA or to a retirement plan. In this case, you would ask the financial institution that administers your IRA to make the payment directly to your new account. Similar to direct rollovers, no taxes will be withheld from the amount that will be transferred.

60-Day Rollover

The 60-day rollover method allows you to deposit all or a portion of your distribution from an IRA or retirement plan into another IRA or retirement plan within 60 days. If the distribution is paid directly to you, taxes will be withheld from the distribution amount, so you’ll have to use additional funds to rollover the full amount of the distribution.

It’s worth noting that if you don’t complete the rollover within the 60-day window, you may be subject to taxes and early withdrawal penalties.

Step 3: Rollover Funds to Your New Gold IRA Account

When transferring funds from one retirement account to another, whether it’s a 401(k), IRA, or another type of account, you will have to contact your account administrator to make the necessary arrangements. 

In some cases, you may be able to make the request online, and the process may be fully automated. However, some administrators may still ask you to fill out some paperwork and send it via e-mail or physical mail to confirm that you are the one requesting the transfer. 

Once the necessary arrangements have been made, the administrator will either provide you with a check or execute the transfer of the funds and assets to the new account with the Gold IRA company you’ve chosen. It’s important to follow the specific procedures and requirements set by your account administrator to ensure a smooth and successful transfer.

Step 4: Setup Custodian Trustee Services and Storage

Before you can complete the rollover, you must have an account with a custodian trustee and an IRS-approved storage facility to hold your physical gold.

Some Gold IRA companies offer custodian trustee services as part of their package, while others do not. If the company you will be working with doesn’t offer this service, you’ll need to find a custodian trustee that specializes in gold investments. 

Popular options include Equity Trust, GoldStar Trust Company, New Direction IRA, and The Entrust Group. These companies may charge a flat annual fee for their services, which can range from $150 to $500 per year.

In addition to being a custodian trustee, you’ll also need to open an account with an IRS-approved depository that will receive your gold shipments. Some commonly used depositories within the United States are the Delaware Depository Service Company, Brinks Global Services, and CNT

Gold storage companies typically charge an annual fee and may also charge separate fees for receiving and sending gold shipments on your behalf. You may also be required to pay a one-time setup fee for opening an account with them.

Many Gold IRA companies have established partnerships with custodians and storage services. This can make the account opening process easier for you. Before choosing a Gold IRA provider, check which companies they work with and how much they charge for their services.

Equity Trust, Gold IRA guide
Source: Equity Trust

>> Read Also: Home Storage Gold IRA

Step 5 —Buy IRS-approved Precious Metals 

Once you’ve set up your Gold IRA account and successfully rolled over the funds from your previous retirement account, it’s time to start investing in precious metals. However, it’s important to note that the IRS requires all gold, silver, and platinum purchased for a Precious Metal IRA to be 99.5% pure.

Most Gold IRA providers offer a variety of coins and bars of different sizes, designs, and mints that meet this requirement. When choosing which precious metals to invest in, consider factors such as your account balance, investment goals, and risk tolerance.

Coins are a popular choice for many investors, as they are often more affordable and offer greater flexibility for creating a diversified portfolio. Some of the most commonly purchased coins include American Gold EaglesCanadian Gold MaplesSouth African Krugerrands, and Austrian Gold Philharmonics. These coins are widely recognized and traded, making them a liquid and secure investment option.

Bars are another option for investors looking to diversify their portfolios. These bars come in various sizes, ranging from one ounce to 10 ounces, and are produced by reputable mints such as PAMP Suisse, Valcambi, and Credit Suisse. Bars are typically more expensive than coins due to their larger size and purity.

Silver Gold Bull, American Gold Eagle
Source: Silver Gold Bull, American Gold Eagle 1 oz

Reasons for Considering a Gold IRA

You now know everything that needs to be done to open a Gold IRA and how you can rollover your current retirement account to one of these self-directed investment accounts.

However, you may be asking, why should I do it? Here are four reasons why opening a Gold IRA could be a good idea.

Owning A More Diversified Portfolio

Investing in gold can help diversify your portfolio, reducing its overall risk and potentially increasing returns. Gold has historically had a low correlation with other asset classes, such as stocks and bonds, meaning that it can help offset losses in these other investments during market downturns. By adding gold to your portfolio, you can potentially enhance your overall investment strategy by building a more balanced portfolio.

Protection from Economic Uncertainty and Inflation

Gold has long been seen as a safe-haven asset during times of economic uncertainty and inflation. During economic downturns or times of political instability, gold prices often rise as investors seek out safe investments. 

“Looking back almost half a century, the price of gold in US dollars has increased by an average of nearly 11% per year since 1971. when the gold standard collapsed. Over this period, gold’s long-term return is comparable to equities and higher than bonds”, a study from the World Gold Council indicates.

Tax Benefits as A Conventional IRA

A Gold IRA offers the same tax benefits as a conventional IRA, including tax-deferred growth and potential tax deductions for contributions. This means that your investment in gold can grow tax-free until you start making withdrawals in retirement. Additionally, if you choose to invest in a Roth Gold IRA, you can potentially enjoy tax-free withdrawals in retirement.

Protection Against Currency Devaluations

Gold is a globally recognized currency that can protect investors against currency devaluations. As the value of paper currency fluctuates, gold prices often rise, making it a potential hedge against the effects of currency devaluations. By investing in a Gold IRA, you can potentially protect your retirement savings from the negative effects of currency devaluations.


Gold IRA Rollover Guide FAQ

The following are answers to the most frequently asked questions (FAQs) we get on the topic of how to rollover a Gold IRA to other types of retirement accounts.

What Are the Fees Associated with A Gold IRA Rollover?

Most providers do not charge a fee to perform a rollover as they benefit from the custodian fees they will collect from the new account that is being transferred to them. However, some Gold IRA companies charge a one-time account setup fee.

Do I Own Physical Gold with My Gold IRA?

Yes. Investors can purchase physical gold and other precious metals by using a self-directed IRA such as a Gold IRA. However, these assets cannot be stored anywhere. Instead, investors have to open an account with a depository that is approved by the Internal Revenue Service (IRS).

Where Is the Gold Stored in My Gold IRA?

The physical gold purchased for a Gold IRA has to be stored with an IRS-approved depository such as the Delaware Depository, Brinks Global Services, and the Texas Bullion Depository. Storing these assets at home is not a possibility unless some complicated arrangements are made. 

However, even if the investor is acquainted with the procedures involved in storing gold at home legally, the cost of doing this usually exceeds the benefits of the operation.

What Is a Gold IRA Custodian?

A custodian is an entity appointed by the accountholder to make all the necessary arrangements to purchase, manage, and sell the gold held within a self-directed individual retirement account (SDIRA). These organizations should also ensure that the Gold IRA and all the transactions made with it comply with the rules established by the IRS regarding these operations.

What Is the Difference Between Segregated and Commingled Gold IRA Storage?

The difference between segregated and commingled Gold IRA storage is how the physical gold is stored and managed within the depository.

Segregated storage means that the investor’s physical gold is stored separately from other investors’ gold in a dedicated storage space. Each investor’s gold is identified and tracked separately, and the investor has full ownership and control over their specific assets. Commingled storage, on the other hand, means that the investor’s gold is stored alongside other investors’ gold in a shared storage space.

How Much Can I Contribute to A Gold IRA?

The contribution limits applicable to Gold IRAs are the same as regular IRAs. According to the IRS’s latest update for this year, the maximum yearly contribution that investors can make to these accounts stands at $6,500 for those aged 50 or less and $7,500 for investors older than 50 years.

What Is a Gold IRA Depository?

A Gold IRA depository is a facility that is approved by the IRS to store physical gold and other precious metals on behalf of investors who invest in these assets by using this type of account. The depository’s role is to provide a secure and insured storage facility for the investor’s assets as well as to ensure compliance with IRS regulations.

Can I Own Other Precious Metals in A Gold IRA?

Yes. Most Gold IRAs are structured as self-directed IRAs (SDIRAs), and this allows investors to purchase other precious metals, including gold, palladium, and platinum, for their investment portfolios.

What Are The IRS Purity and Fineness Requirements for Precious Metals IRA?

In the case of gold and silver, the IRS demands a purity of 99.9%, while for platinum and palladium, the minimum purity is slightly lower at 99.95%.

Why is Physical Gold Better Than Paper Gold?

Investing in physical gold is not necessarily a better choice than investing in paper gold, as it all depends on the investors’ goals, risk tolerance, and budget. Physical gold is considered a good alternative as it gives the investor ownership over a tangible asset and reduces counterparty risk. However, paper gold is more liquid, and transaction costs are typically lower.

Who Is Eligible to Contribute to A Gold IRA?

Any American can open a Gold IRA as long as they are under the age of 70 ½. They could be self-employed or depend on the income they produce from a regular job. For Roth IRA, there are income limitations to who can contribute. However, these do not apply to traditional IRAs. In addition, employers can also make contributions to an IRA as part of a SIMPLE IRA plan.

What Is a Gold IRA Custodian?

The role of a trustee in a Gold IRA is to act as a custodian of the investor’s assets and to ensure compliance with IRS regulations. A trustee is responsible for holding and managing the assets in the account, including physical gold, and for keeping accurate records of all transactions.

What Is a Proof Coin?

A proof coin is a specially minted coin that is produced using a unique process to create a high-quality finish and sharp details. Proof coins are struck multiple times with specially polished dies, which gives them a mirror-like finish and crisp, detailed design elements.

The term “proof” comes from the practice of creating a sample or “proof” of the coin before it goes into full production. Historically, proof coins were used to ensure that the dies were properly prepared and that the coins would have a high-quality finish. Today, proof coins are produced in limited quantities and are often sold to collectors and investors as a special edition of a particular coin series.

Can I Store Gold at Home in A Gold IRA?

The simple answer to this is no. The IRS requires that investors open an account with an approved depository to store the precious metals bought for a self-directed IRA. However, it is legally possible to store gold outside these institutions for a Gold IRA, but several complicated arrangements have to be made to make sure the procedure complies with the IRS rules. This procedure is, however, not recommended for beginner investors.


Final Thoughts

Opening a Gold IRA can offer several potential benefits for investors, including diversification, protection against economic uncertainty and inflation, tax benefits, and protection against currency devaluations. However, there are also some potential drawbacks to consider, such as storage costs and the potential for lower liquidity compared to other investment options.

The decision to rollover an existing retirement account to a Gold IRA will depend on the individual investor’s goals and preferences. Some investors may be motivated by a desire to diversify their portfolios and protect their retirement savings from inflation and economic uncertainty.

Overall, the decision to invest in a Gold IRA or other precious metals should be made based on careful consideration of the individual investor’s goals, risk tolerance, and financial situation. By working with a reputable Gold IRA provider and depository and by seeking the advice of a financial advisor or tax professional, investors can make informed decisions about whether a Gold IRA is right for their retirement savings strategy.

Get our free Stock Market Playbook to learn how to invest your first $500 in the stock market.

Plus our best money tips delivered straight to your inbox.

CTA Bottom Blog Post Investing