Unlocking Wealth: A Guide to Understanding and Investing in a Gold IRA

What is a Gold IRA?

Gold IRAs are a specific type of self-directed individual retirement account that allow you to hold gold in compliance with IRS regulations. Surprisingly, though, a gold IRA doesn’t have to just hold gold — like conventional IRAs, they can hold stocks, ETFs, bonds or mutual funds.

Types of Gold IRAs

A traditional gold IRA is the most common type of gold IRA (and the kind discussed throughout this guide unless otherwise specified). It is funded with pre-tax dollars, and you pay income tax on withdrawals in retirement.

The alternative to the tax deferral a traditional or self-directed IRA affords is a Roth IRA, which is funded with money on which you have already paid taxes. The money grows tax-free and you do not pay taxes when you take distributions in retirement.

A Simplified Employee Pension — or SEP — gold IRA is a type of IRA intended for people who are self-employed or small business owners. It is also funded with pre-tax dollars, but the contribution limits are different and business owners can contribute on behalf of their employees.

How to Set Up a Gold IRA

To set up a gold IRA, you have to work with a gold IRA company to open an account and purchase the precious metals of your choice to fund it. The company will guide you through the process, which includes coordinating the selection of an IRS-approved custodian and arranging the functions performed by the depository. Some even let you open the account online.

Gold IRA Rollover

A common way to fund a new gold IRA is to use funds that are already held in another retirement account, such as another IRA, 401(k), 403(b), 457(b) or Thrift Savings Plan. The gold IRA company you choose will help you initiate that by contacting your plan administrator with a request to roll over funds into your new gold IRA.

How to Buy Gold in an IRA

• Choose a gold IRA company: Look for a gold IRA company that is transparent, straightforward about fees and has a good reputation.
• Choose your metals: The two most widely offered options to put in a precious metals IRA are gold and silver. A number of gold IRA companies also offer platinum and/or palladium.
• Go elsewhere for investment advice: Gold IRA companies do not operate in an advisory capacity. As precious metals dealers, their role is strictly to sell, not offer investment advice. They are not fiduciaries, meaning that they are not legally required to act in your best financial interests like some retirement advisors.

How to Hold Physical Gold in an IRA

There are IRS-approved gold and other precious metals manufactured by the U.S. Mint, certain other governments’ official mints, as well as some private mints that are designated by the IRS as approved manufacturers of IRA-compliant bars and coins.

Gold IRA Tax Rules

Before you open a gold IRA, make sure you know about the regulatory hoops you have to jump through to make sure that account doesn’t violate IRS rules. Making a mistake can be very costly, so it pays to know what the IRS does and doesn’t let you do with your account.

What is a Gold IRA FAQ

• What is a gold IRA rollover? A gold IRA rollover involves taking funds from another defined-contribution account such as an IRA, 401(k) or thrift savings plan. You can roll over all or part of the balance to fund a gold IRA without incurring a tax liability, provided you complete the process within 60 days.
• What is IRA-approved gold? The rules that govern gold IRAs are extremely detailed. Your IRA precious metal coins, rounds, bars and ingots need to conform to regulations on size, weight, design and metal purity.
• What are gold IRA companies? Gold IRA companies are primarily sellers of the gold bars and coins that go into a gold IRA. They also facilitate opening your gold IRA account, but they do not provide investment advice, and you should not use the marketing material they publish for guidance in this regard.

Summary of What Is a Gold IRA?

A gold IRA lets you invest in more than just conventional assets like stocks, bonds and funds — namely, it allows you to invest in precious metals, including gold, silver and platinum. A gold IRA company will help you open and fund a gold IRA, and will coordinate with the custodian and depository to administer your account and store your gold.
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