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How to Buy a Gold IRA

You have been saving for retirement, but your 401K is losing money, and your bank account is depleting. What can you do to secure your retirement funds and ensure they will be there when you retire?

You are likely here because you are interested in investing in precious metals. You probably want to open an IRA but are unsure how to start.

In this guide, we will lay out all the details of how to invest in gold. From opening a precious metals IRA to choosing a custodian and purchasing gold coins, this guide offers comprehensive information in an easy-to-understand language.

What is a Gold IRA?

You will hear the terms gold or silver IRA and self-directed IRA used interchangeably. Both offer the option to purchase gold and other precious metals. With these IRAs, you can hold gold, silver, platinum, and palladium bullion.

Before opening a gold Roth IRA or using your current retirement account to invest in owning physical gold, you need to meet with a financial advisor to understand the IRS rules. You should also find a custodian who will manage your self-directed IRA.

What are the IRS Rules for Gold IRAs?

Before you invest in gold, or hold physical gold, you must know the IRS rules and how a precious metals IRA works. If you search for these rules, you will find a laundry list of information, but not all of it is correct. According to the Taxpayer Relief Act of 1997, the following IRS rules apply to traditional or Roth IRA-approved gold:

  1. Gold must be at least 99.5% pure. The only exception to this rule is the Gold American Eagle Coin which has a purity of 91.67%.
  2. Silver must be at least 99.9% pure.
  3. Platinum and palladium coins must be at least 99.95% pure.
  4. All coins, bars, and rounds must be produced by manufacturers certified by a national government, TOCOM, NYMEX, LPPM, ISO 9000, LBMA, LME, NYSE/Liffe, or COMEX.
  5. All proof coins must be sealed in the original packaging and include a certificate of authenticity.
  6. Smaller bullion bars must be produced with the exact weight specification stamps.
  7. Non-proof coins must be in mint condition and uncirculated.
  8. The gold must be stored in an IRS-approved depository.
  9. You cannot take a distribution from your gold Roth IRA until the age of 59 1/2, except under specific situations.

While the above rules are relatively easy to understand, we highly recommend you meet with a tax advisor to ensure you can invest in gold while enjoying its tax advantages.

What are Self-Directed IRAs?

Self-directed gold IRAs are individual retirement accounts allowing investors to invest in alternative options beyond paper assets. Some retirement accounts, such as a 401K, will allow you to convert your 401k to gold without a penalty through a self-directed IRA.

A self-directed IRA allows you to invest in alternatives, like precious metals, real estate, private mortgages, oil and gas, and more. You should receive investment advice before purchasing any of these assets. For precious metals self-directed IRAs, most experts recommend keeping your portfolio percentage between 5% and 10%.

How to Select the Best Gold IRA Companies

Before begin overhauling your retirement portfolio with self-directed precious metals IRAs, you will need an IRS-approved custodian. Custodians are financial firms that manage the administrative duties necessary for keeping your gold Roth IRA in good standing.

Most gold companies in the industry partner with their preferred IRA custodians to provide these services to their customers. You can also choose a custodian based on your own research. The following are some factors to consider:

  • Research the performance of the gold custodian. You will want to choose a firm that has vast experience.
  • You should also consider the safety and accessibility of the firm. The firm should always grant you access to your account without you having to jump through hoops to get information.
  • Ensure the custodian is certified and licensed to provide business in your state. A lack of certification should throw up a red flag when gold investing.
  • You should also inquire about the fees charged by the custodian.
  • Learn about the authorization process and how quickly it occurs.

What level of customer service does the custodian provide? Are they available when you have questions?

Top 3 Gold IRA Companies in 2024

#1: Best For All Level Investors

9.6

American Hartford Gold

5 Star customer service, easy to work with, and a low price guarantee.

PROS
  • The company provides a price match guarantee, but customer complaints have stated they do not honor the guarantee fully.
  • Hartford Gold often offers promotions, such as waiving fees for up to three years or offering up to $1,500 in free silver, depending on certain requirements.
  • The website offers many educational opportunities. You also have access to an expert to help you through the process of investing in your precious metals IRA.
  • The company seeks to offer 100% customer service satisfaction.
  • They offer a buyback program for their customers only.
  • The company offers full-price disclosure before every sale.
CONS
  • The Hartford Gold website does not offer prices. You have to call a representative to get information on the prices of gold and other precious metals.
  • The company does not ship outside of the United States.

#2: Best For Education

Goldco

Excellent customer service from precious metals experts.
PROS
  • The company offers a white glove service with every sale.
  • The company has glowing endorsements from media figures and celebrities, including Chuck Norris and Sean Hannity.
  • This gold IRA company has an A+ rating from the Better Business Bureau and a AAA rating from the Business Consumer Alliance.
  • They help their customers every step of the way to open gold IRAs.
  • They are tops in the gold and silver market, offering gold and silver ira approved coins, bullion, and more.
  • They help their customers pursue the appropriate precious metals investments for IRS-approved gold.
  • The company offers customizable services for precious metals IRAs. Customers will never be offered a cookie-cutter approach to investing in gold or silver IRAs.
CONS
  • The main drawback of the company is its high minimum investment account, which hovers at $25,000 or more. While this amount is approachable for seasoned experts, it may be too high for those new to investing in precious metals IRA. If you visit the Goldco website, you can learn more.

#3: Best For Product Variety

Birch Gold

High level of customer service and a solid reputation
PROS
  • The company offers a high level of customer service.
  • They educate the public on gold IRAs, even offering them a free kit.
  • The company communicates with its customers in ways other precious metals companies cannot. Even those that complain against the company will find their concerns are addressed immediately.
CONS
  • While the $10,000 minimum is lower than many precious metals IRA companies, it can be too steep for some new investors.
  • Gold and precious metals carry risks some investors may be unwilling to take.

How to Open a Gold IRA Account

If you do not have an existing self-directed IRA, opening one is relatively easy, though it is slightly more involved than a Roth IRA or traditional IRA. The following are the steps to open a Gold IRA Account:

  • First, you need to select a custodian. The custodian must be IRS-approved.
  • Select a physical precious metals dealer.
  • Decide which gold and other precious metals you want to purchase for your IRA.
  • Select a depository approved by the IRS and be aware of the storage and insurance fees.
  • Complete the transaction. Your custodian will handle the paperwork, and the dealer will ship your precious metals to your chosen depository.

The custodian, as mentioned above, will take care of all the paperwork and administration tasks for your self-directed IRA. The custodian will also help you when you want to take distributions.

How to Fund Your Precious Metals IRA Account

There are a couple of ways you can add funds to your precious metals individual retirement account, and start investing in gold. You may choose to use one or more of the following funding options.

You can roll over funds from an existing retirement account, such as another IRA, 401K, 457b, 403b, or Thrift Savings Plan. You must contact your account administrator to roll over all or a portion of the funds.

It is important to note that if you are under the age of 59 1/2, you only have 60 days to deposit any funds from other retirement accounts. If you wait beyond this period to deposit, your withdrawal will be considered a distribution and trigger a 10% early withdrawal penalty imposed by the IRS.

You can also transfer funds from one IRA to your precious metals IRA. This process is handled institution-to-institution, so you will not be in danger of triggering any IRS penalties.

You should not use cash to fund your IRA, although this is an option. The entire point of opening a gold IRA is to invest with tax advantages.

Since you have already paid taxes on the cash, you negate some of the tax advantages. Most gold IRA companies will allow you to fund your account with cash.

You should seek IRA investment advice to help you go through the necessary steps before you buy gold. IRA custodians help you make sense of all the rules.

What Fees Will You Be Charged for Your Gold IRA?

You will incur fees with a gold IRA that are not triggered by other individual retirement account options. The following are some of the fees, though their amounts will vary according to the gold IRA companies and their charges:

  • One-time account setup fee (Usually around $50 but may be higher or lower)
  • Wire transfer fee (Usually around $30)
  • Annual storage fees (Usually at least $100, but it could be more)
  • Markup fees for gold purchases

Although some gold IRA companies are transparent about their fees and list them on their websites, this is not the norm, unfortunately. Often, you will have to call a company representative before learning this information.

What Gold is IRA-Approved?

We have already told you gold must have a purity level of 99.5%, except for the one exception of Gold American Eagles. The following are some of the IRA-approved gold products you can invest in with your gold IRA:

  • One Ounce American Gold Eagle Coins
  • 1/2 Ounce American Gold Eagle Coins
  • 1/4 Ounce American Gold Eagle Coins
  • One Ounce American Gold Buffalo Coins
  • One Ounce Australian Gold Kangaroo Coins
  • One Ounce Gold Canadian Maple Leaf Coins
  • One Ounce Austrian Gold Philharmonic Coins
  • One Ounce Royal Canadian Mint Gold Bars

The above is just a small sampling of the coins and bars in which you can invest. Remember that you can also purchase silver, platinum, and palladium bullion as long as it meets the purity requirements.

How Can You Hold Physical Gold?

You can hold gold in your IRA with the help of a gold custodian. Some people prefer to handle their precious metal and store it at home or rent a safety deposit box. Remember that you will not get tax benefits when holding physical gold outside of an IRA.

Understanding the Tax Benefits of Gold IRAs

Aside from diversifying their retirement portfolio, people invest in gold IRAs because they want tax advantages. The following are some of the tax advantages you can expect.

If you have a traditional IRA, all contributions are made on a pre-tax basis. You will only pay taxes when you take distributions after the age of 59 1/2. This deferment can save you money on taxes because you will be in a lower tax bracket after retirement.

If you have a Roth IRA, you will pay taxes with each contribution. You will not owe any taxes when you start taking distributions after retirement.

Are There Age Limitations for Gold IRAs?

There are some age limitations for gold IRAs. You cannot begin withdrawing without tax penalties until the age of 59 1/2. When you turn 70 years of age, you will be forced to begin taking distributions each year from your self-directed IRAs.  Check out our page best gold IRA companies for seniors.

How Do You Withdraw From a Gold IRA?

You have options for withdrawing from your gold IRA once it reaches maturity. You can contact your gold IRA company for directions. Consider the following options.

In-Kind Distribution

When you take an in-kind distribution, you contact your custodian and ask them to send your precious metals directly to your home so you can keep or sell gold. This distribution puts the power in your hands after you buy gold and let it mature in your account.

Standard Liquid Distribution

You can also choose a standard liquid distribution. You simply contact your gold IRA custodian and cash out by having them send you a wire, check, or ACH.

Many precious metals companies offer buyback programs when you buy gold from them. The buyback price is generally a little lower than the spot price. Owning gold gives you options.

Should You Invest in a Gold IRA?

Should you open a gold IRA?  It may be a a wise option if you are interested in diversifying your retirement portfolio. The following are your options for investing in gold:

One of the most popular methods of investing in gold is by purchasing physical gold, often referred to as bullion. We have outlined the requirements for investing in gold for your IRA. You can also choose to purchase and hold the gold outside of a Roth IRA, though you should practice caution when storing it at home.

You may also invest in gold mining companies via the stock market. Some of the top companies include Barrick Gold, Kinross Gold, and Franco-Nevada, among others. Research the companies carefully before investing.

Gold mutual funds also trade like other stocks on the stock market. You can invest in gold mutual funds with a traditional or Roth IRA. Self-directed IRAs offer many options for investment.

Gold ETFs are commodity funds that allow you to trade, much like you do with stock on the stock market. Gold exchange-traded fund options can be a part of a traditional or Roth IRA.

This type of gold investment involves investors becoming contract buyers and delivering a set amount of gold at a set price in the future. This investment option, in addition to gold ETFs, can help you diversify your portfolio.

FAQ About Gold IRAs

Because the subject of gold investment is so vast, it is possible you still have further questions, even after reading this detailed guide. The following are some top questions people have about Gold Roth IRA.

How Much Money Do You Need to Start a Gold IRA?

You can start a gold IRA with as little as $50. This amount covers the initial setup fee. You will also need to fund your account. Depending on your gold IRA company, the amount you need to purchase gold will vary.

Is Gold IRA a Good Investment?

A gold IRA is a good investment because it helps you diversify your portfolio and hedge against inflation. When you buy gold, you are investing in your financial future. Gold retains its value even when the value of the dollar drops.

How Much Can You Put In a Gold IRA?

You can put up to $6,500 in your gold IRA at this time. The limit increases each year, giving you further options to buy gold.

What Is the Best Gold IRA?

The best gold IRA company is American Hartford gold because they have a low cost guarantee, and they help you through each step and partner with the best custodians and depositories to help their customers purchase gold without stress.

The Bottom Line

If you have a traditional IRAs or a Roth IRA, you can invest in metal options like gold, silver, platinum, and palladium. To get started, you will need to find the right gold company to help guide you through the process. Protect your retirement funds today through diversification.