What is a Gold IRA?

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What is a Gold IRA?

You may have heard of a gold IRA rollover, gold IRA, 401k to gold IRA rollover, or Precious Metals IRA but never fully understood what it is.

So what is a Gold IRA?

A gold IRA is an individual retirement account (IRA) where gold and other precious metals are held in custody on behalf of the account owner (you).

It is the same as the typical IRA. The difference is that you don’t have paper assets. What you have is physical gold coins and bars – tangible assets. So you want to know how to invest in a Gold IRA? Keep reading! 


The Benefits of a Gold IRA

Do you want to secure your retirement? Of course, everybody does, after all, you worked hard for what you have. You sacrifice your youth to make sure you will live a comfortable life by the time you retire. Investing your money is one of the best ways to secure it and it can be done through Gold IRA rollover.


For you to have a Gold IRA, you must choose a company that offers Gold IRAs. A Gold IRA company will help transfer your funds on your behalf and turn them into physical precious metals, without tax penalties. This is the ‘IRS loophole’ you might have heard about. You can invest in precious metals without paying taxes!

While simply transferring funds from an IRA to a Gold IRA is always an option, a rollover is the tax-advantaged method of moving your retirement funds into precious metals.

Difference Between a Gold IRA Rollover and a Transfer

It’s common to call any movement of funds from one retirement account to another a rollover, the IRS makes a clear distinction between a rollover and a transfer.

Rollover – the money being moved is paid to you and you then deposit the funds in the other account.

Transfer – the original custodian of the IRA transfers the funds directly to the new IRA custodian you designate to receive the funds. You never have access to the money.

Gold IRA Rollover Rules

During a Gold IRA rollover, you have 60 days from the date you receive the funds to deposit the money in the Gold IRA Company or Custodian you have chosen. Failing to not complete the transaction within this period causes the funds to become a taxable withdrawal and you will face a 10% early withdrawal penalty if you are under 59 1/2.

If you are withdrawing from a personal IRA for a rollover to another IRA, there is no tax withholding. However, you can do only one rollover per year.

401k to Gold IRA Rollover

A Gold 401k Rollover is simply depositing funds from your current 401k into your gold IRA custodians account. From there, they use those 401k funds to purchase your precious metals with.

Gold IRA Transfer Rules

In a direct custodian-to-custodian IRA transfer, you do not have to worry about the 60 day transfer rule since you never touch the money. The transfer is usually accomplished by wire transfer directly between the 2 respective IRA custodians.

The original IRA custodian can also accomplish the transfer by issuing a check made out to the custodian of the receiving IRA and mailing it out.

Types of Precious Metals Used for Gold IRAs

Gold is actually not the only metal you can use when investing in physical metals for your IRA. Other forms of metal are also accepted such as silver, platinum, and palladium. They are acceptable as long as they are IRS approved coins or bars. Silver is seeing a resurgence as it is considered by many to be under-valued.

There are various reasons why investors choose to put their asset into a Gold IRA or use some or all funds from their current 401k or IRA and do a gold IRA rollover. They want to diversify their portfolio, protect their wealth from a market collapse and hedge against inflation.

The IRS has a specific requirement for Gold IRAs. The IRA approved precious metals should be placed in a depository. As a Gold IRA account holder, you have the option to liquidate your precious metals for cash (usually with a buyback program) or in physical form, but keeping your precious metals is the responsibility of a depository.

It is not the responsibility of the Gold IRA account holder (you) to store and protect the precious metals.

There are various depositories that qualify to be a depository custodian to the precious metals:

•    Savings and loan association
•    Organizations approved by the IRS to function as a custodian or trustee
•    Credit union insured by the Federal government

There are strict requirements to become a depository custodian. They include the following:
•    Strict security features like time lock and automatic relocking features
•    Strict detections for entry, sounds, motions, vibrations, disturbances
•    Insurance policy

Gold IRA Storage

Storage of gold in a gold IRA account can be done in two ways: segregated and non-segregated (commingled).

•    Segregated – your precious metals are held separately from that of other investors.
•    Non-segregated – it means your precious metals are mixed with other peoples metals. This is sometimes called ‘commingled’ or allocated.

What is a Home Storage Gold IRA?

A home storage gold IRA is an IRA where the account holder takes personal control over their metals storage. You decide the physical location of your asset.

You could put them in a safe that’s bolted down in your home somewhere for example. You also have the freedom to eliminate or at least reduce the fees involved in keeping your asset. It is a form of self-directed IRA.


However, you have to be aware that self-storage IRAs are not recognized by the IRS. It is risky. Since having the precious metals in your possession is considered a distribution, you could face tax penalties.

Why Invest in Gold?

Investing in gold has many benefits. First, the gold’s value is rarely affected by inflation. If the economy is down, then expect the value of gold to go up.

A Gold IRA is more stable when compared with the paper-backed IRAs. As you know, the latter is highly volatile as compared to the former. If the economy is down, then expect for your paper IRA to go down as well.

Conversely, gold is highly stable. It is seldom affected by inflation and if so, then the effect is very minimal. If you open a Gold IRA you will be at peace knowing that your retirement savings are protected.

How To Invest In a Gold IRA

To start a Gold IRA, you should first open a self-directed individual retirement account (SDIRA). First, choose a highly reputable Gold investment company (custodian) as they will be the one to manage your account.

You still have full control over your account but it will be the custodian who will carry out the task for you. You have to be careful though, as not all custodians have what it takes to help you succeed. Read our list to find a highly reputable and highly experienced IRA custodian.

Do Your Research

There’s a lot of great aspects of precious metal IRAs. We love gold and silver too and like to invest in them. You should not be impulsive when investing your hard-earned money. Take some time to do thorough research until you fully understand the details of Gold IRAs. We’ve included many resources on our site to help you with understand what a Gold IRA is.

We advise you to consult with an expert in this field. We have taken the time to make a list of the best Gold IRA companies for your reference. 

Investing your retirement money is a big decision. You can’t afford to make mistake. A single mistake can wipe out savings that you have worked hard for. Investing in a Gold IRA is one of the best decisions you can make to safeguard your assets.

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Rating: 5 out of 5.
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