Buying Gold in an IRA

Buying Gold in an IRA

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An individual retirement account is one of the most important ways that you can plan for the future. If you're one of the one-third of Americans who regularly contributes to a retirement account, you might be wondering how to put your money to good use. Some people have more specific concerns regarding the economy. The past few years have led to significant economic changes and instability, leading people to be wary of many entrenched financial institutions.

You might be wondering if it's possible to invest some of your retirement funds into gold. The answer is yes. As of 1997, alternative assets like gold and silver have been eligible to hold in a retirement account. But these items cannot be kept in a 401(k) or a traditional IRA. They need to be part of an account called a self-directed IRA.

About Self-Directed IRAs

Buying Gold in an IRA

An individual retirement account is a retirement account that is tied to one person, rather than being part of an employer group plan. Some people have both an IRA and a 401(k). A traditional IRA setup is very similar to the setup of a 401(k) employer plan. There is an investment manager with training and a strong financial background who will decide what assets your money should be invested in.

But this investment manager is only allowed to purchase traditional assets such as stocks, bonds, and mutual funds. It is possible to create a diverse portfolio with these, but some people want to go further with the diversification. They are interested in introducing alternative assets like cryptocurrency, precious metals, and even real estate holdings.

All three of these categories can be held in a self-directed IRA. This type of account is still tied to an individual, but there is no investment manager. Instead, you have complete control over how your money is spent. If you want to invest it all in one asset, you're welcome to do that. If you want to set up your own diversified portfolio with a broad range of different assets, you're also welcome to do that.

Unfortunately, self-directed IRAs can be intimidating to work with, especially if you don't have a financial background. There is a significant amount of paperwork that needs to be filled out and filed in order to open and fund the account. There is also a significant amount of red tape surrounding the items that you are allowed to buy with your account.

It's important to make sure that you're following all of the IRS guidelines regarding the maintenance, storage, and funding of your account. There are limits on certain types of contributions, as well as rules for how precious metals need to be stored. If you fail to comply properly with the rules, then you might end up needing to pay hefty penalties for early withdrawal on top of your taxes.

Some people might think that there's too much work involved to bother with a gold IRA. But there are companies that exist to make the process more accessible to the general public. If you have an interest in buying gold, you can work with one of them. These are typically gold dealerships that stock IRA-eligible inventory and have staff members who can help you with your paperwork and compliance.

Some of these companies are better than others. Before you make any kind of investment, you should always look up the reputation of the company that you're working with. There are trusted review sites that you can use to find a variety of third party reviews, showcasing both the positive and negative aspects of the business.

Some of the most commonly used examples are websites like Consumer Affairs, Trustlink, Trustpilot, and Google Business Reviews. Many of these have verified customer settings so that you can make sure you're reading the true words of an actual customer.

Setting Up a Self-Directed IRA

Buying Gold in an IRA

Before you can make any purchases with your retirement funds, you need to actually create your account. If you already have a self-directed IRA, then you can use it to buy gold. But most people don't have a self-directed IRA because they've never had any reason to create one. These accounts are mostly favored by people who specialize in alternative assets or who have a very strong personal investment background.

Like any retirement account, there will be certain third parties and reporting involved. The main party that you'll need to work with is your custodian. Not every custodian is eligible to maintain self-directed IRAs. Some of these financial institutions can only manage traditional retirement accounts. So it's important to make sure that your custodian of choice is actually licensed for your account type.

Your custodian will take care of maintenance of your assets. Where gold is concerned, this means that they will accept the package and store the products in a secure vault for you. They will be responsible for sending you regular reports about the valuation of your assets, as well as checking in with the third parties who conduct audits. Your custodian is responsible for various tax filing needs with the IRS, so you don't need to worry about your own tax return becoming more complicated.

You will need to fill out an account application for your chosen custodian. Different custodians have different applications, often available online through their websites. The information required usually involves basic details about you and about your financial situation.

As with gold dealerships, you should research your custodian before you file your application. You want to make sure that the company has good reviews and solid customer service policies. Once your application is filed, an account might be created within 24 hours. Some companies might take a little longer to process the document.

If you work with an IRA gold dealership, they will often be able to match you with a custodian. Many of these dealerships have at least one custodial partner that handles IRAs for their customers. The best dealerships will only work with custodians that have a good reputation. They may even talk to the custodian on your behalf, so you won't need to worry about making any long phone calls or chasing down multiple representatives to get your account authorized.

Once the account exists, though, you will still need to fund it. This can be done through a contribution from your personal savings, or you can move funds over from one of your existing retirement accounts. There are financial caps on personal savings contributions, generally that you can't add more than $7,000 per year to a self-directed IRA. But there are many fewer rules regarding rollovers.

The rollover transfer paperwork can also be tedious and complicated. You will need specific information about the retirement account and custodian that you're planning to pull from. Your custodian will need to contact the custodian of the other retirement account to facilitate the rollover. You'll have your choice of however many funds you want to send.

Rollover paperwork needs to be filed and processed within 60 days of your account first being opened. If you roll over your funds after those 60 days, then the IRS will consider it an early withdrawal. You'll have to pay your taxes and will lose a significant amount of the contribution in penalties. Even if you're already retirement age, you want the continued tax advantages that a rollover gives you.

Sometimes it can be difficult to facilitate the transfer between custodians. That's especially true if one of the custodians doesn't have the best reputation. They may purposefully delay the process and hesitate to send the requested funds. You don't have time to stay on the phone all day making sure that everyone is communicating.

That's another reason why it's a good idea to use a gold IRA dealership. Oftentimes, these companies will teach you how to fill out the rollover paperwork and go over it with you. Some of them have representatives that will make all of the phone calls and streamline the process, saving you tons of time and stress. Since they're experts, they're very good at making the complex process smooth and manageable.

It's common for there to be several weeks involved in finalizing the transfer of funds. But once the funds have finally been placed into your new account, you can use them to set up whatever portfolio you want. If you created your self-directed IRA exclusively for gold, then you can use all of the funds to buy gold.

Storage Choices

Buying Gold in an IRA

Once you've chosen your products and paid for them, you'll need to choose a storage facility. Many people wish that they could keep their self-directed IRA assets at home, but this is against federal law. The gold must be kept in a secure storage vault that meets specific IRS security standards. Your custodian must be the one in charge of it, and they must have consistent access to it. This helps ensure transparency and accountability, as well as prevent fraud and incorrect financial statements.

There are hundreds of eligible storage facilities scattered around the globe. Dozens of them are located in the US. Many people look for a storage location that's within their region of the country. It's often possible for you to visit the facility with an appointment and go see your actual holdings. But you won't be able to take possession of them without IRS penalties until you have reached retirement age.

Other people prefer to use depositories that are in tax-advantaged areas of the US. One of the most popular options is the Delaware Depository, located in the state of Delaware. This depository has been open for over a hundred years and is actually the largest gold depository in the US. Delaware state law does not have any taxes on gold purchases or storage, so you save a significant amount of money.

Another choice that's popular for its tax advantages is the Texas Depository. Like Delaware, Texas doesn't have any taxes on gold purchases or gold storage. In addition, Texas is well known as a stronghold of natural resources executives, especially those who work within the oil industry. The Texas Depository is one of the most affordable options that you can work with in the south of the US.

You also don't need to keep your items in the US as long as your custodian properly maintains and records your account. Some people prefer to use overseas storage options. There are multiple facilities in urban Canadian centers that offer IRA storage for Americans. You might also look for storage in countries with distinct tax advantages. Singapore is one of the most sought-after places to store gold, since the entire country operates as a tax shelter for international investors.

If you're not sure what storage facility you'd prefer to work with, that's okay. Many IRA gold dealerships have specific security companies and depositories that they've partnered with. You might have a handful of locations to choose from, rather than hundreds. When you're deciding on the best depository for your needs, you can ask your representative about the differences between your various options. Choose the one that's right for your security and financial health.

Top 3 Companies Invest In Gold

Buying Gold in an IRA

#1. Goldco


Goldco has been operating since 2006 and sets the standard for gold IRA companies. Since they focus almost exclusively on gold IRAs, they have a great deal of knowledge about the topic. Every customer is given a dedicated representative who will walk them through the steps to open and fund an account. Then they'll help the customer decide which products are the best for them.

Goldco also has some of the lowest fees in the industry. It's $50 to set up your account, then $180 paid to your custodian and depository annually for your account. New customers may have the opportunity to have their fees waived. Goldco recommends that customers have at least $25,000 in their account when they get started.

Augusta Precious Metals

Augusta Precious Metals also represents some of the best customer service when it comes to gold IRAs. They have a variety of products available for purchase, most of which are compliant with IRA regulations. The company mainly specializes in helping customers open and maintain their gold IRAs, even offering a lifetime of ongoing free service.

The company is run by some of the top executives in the precious metals business. There are even individual webinars that you can sign up for. During these webinars, you'll learn about precious metals from a financial analyst who trained at Harvard. Augusta Precious Metals has earned the endorsement of NFL player Joe Montana, who was so impressed by his own webinar that he decided to become the company's celebrity ambassador.

American Hartford Gold

American Hartford Gold is another top pick when it comes to good gold IRA companies. Their inventory is varied and often includes coins minted in prior years, which can sometimes be bought more cheaply than this year's coins. They mostly sell IRA-eligible products and have an IRA team to help customers with the onboarding process.

The most unusual thing about AHG is that they don't charge any fees. There isn't even a minimum investment requirement to get started. You can have them help set up your account completely for free, no matter what kind of financial situation you're in. You are free to store as much or as little of your retirement savings in a gold IRA as you want.

Final Thoughts

There are many reasons that people are buying gold for their IRAs today. Many are concerned about economic security and the future of the government. Gold has been used for decades to hedge against stock market volatility and inflation. Though it shouldn't be used as the only investment asset in your portfolio, it can play an important role in the diversification of your holdings.

When you do this, though, you have to follow the federal regulations involved. The IRS has always had extremely strict protocols regarding the usage of your tax advantaged retirement funds. And once you take distributions in retirement, you will need to pay taxes on the income.

It can be overwhelming to figure out how to file all of the paperwork and choose products that are both reasonably priced and eligible for an IRA. That goes especially for people who are new to gold investing. So it's a good idea to work with a specialized gold IRA company, which will connect you to products and good customer service.

There are three top companies that we recommend working with. The best overall is Goldco, with a fairly reasonable entry price and excellent consumer reviews. You'll get more in-depth service that lasts a lifetime with Augusta Precious Metals, but you'll also need to have at least $50,000 to get started. American Hartford Gold is the most affordable option due to their lack of fees, so they're great for people who are investing in a gold IRA on a budget.

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