A gold IRA or precious metal IRA is an individual retirement account in which physical gold or other approved precious metals are stored for the benefit of the IRA account holder. It works in the same way as a regular IRA, except that it holds physical gold coins or bars instead of paper assets. In a gold IRA, you can hold real physical gold. It must comply with IRS standards and be managed by the IRA trustee
, not the IRA owner.
It must also be kept in an IRS-approved depository. Gold IRA rules require that you store eligible precious metals with a national depositary, bank, or IRS-approved external trustee. Your custodian bank can refer you to an approved institution and process the gold transfer as part of setting up your Gold IRA. A gold IRA is characterized by the fact that the account holder owns the actual precious metals, as opposed to stocks or fund shares
of mining companies.
When your application is complete and your self-governing IRA is open, funding your Gold IRA couldn’t get any easier. The Gold IRA company also coordinates the involvement of the financial company, which acts as account custodian, and the custodian institution that stores the precious metals you purchase. Once you’ve opened a self-managed gold IRA, you can transfer cash to the account to fund your purchase of physical gold. If any of the above IRA-eligible gold coins have been graded according to their condition by a certification authority (such as the Professional Coin Grading Service), they are generally defined as “collectibles” by the IRS and are therefore not allowed in
IRAs.
Most gold IRA companies will buy back gold or other precious metals that they’ve sold you, but buybacks are generally carried out at a wholesale price, which is around a third cheaper than the selling price. Similar to any retirement account, with your Gold IRA or Custom Precious Metals IRA, you will invest your retirement savings based on a specific tax treatment (before tax or after tax) and then make distributions in the future. There are easier ways to save for retirement with assets invested in gold than buying physical gold bars yourself. Even though the rules for retirement accounts and gold IRAs may seem unclear, the experienced account executives at U
have these investments available in a normal brokerage IRA, meaning you’d have to save yourself the work and additional costs of setting up a self-directed Gold IRA. As long as there is gold on this earth, it is not too late to open your own Self-Directed Precious Metals IRA. If you’ve decided that a Gold IRA is right for you, you can contact your retirement plan administrator to initiate the rollover, or have the Gold IRA company do a direct rollover between the two companies. If you want more flexibility with your precious metals, you should learn how to buy gold outside of an IRA
.
Gold IRA companies differ in that some allow you to choose between multiple custodian firms and depositories, while others require that you hire a custodian and depositary of your choice.
