FAQs Concerning Investing in Gold IRA

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Investing in Gold IRA FAQ’s– What You Need to Know

Many investors who want to diversify their individual retirement accounts (IRAs) from the usual stocks, mutual funds, and bonds might want to invest with a gold IRA company. Gold offers many benefits other than its glittering appeal. It’s a durable asset that retains or increases its value during unstable stock markets, political upheavals, and inflation.

A gold IRA is also known as a precious metal IRA and works pretty much like a regular individual retirement account, except you are investing in a gold ira. The same distribution rules, regulations, and contribution limits apply. However, unlike a traditional IRA that holds paper assets, a gold IRA has physical bullion, including coins, bars of gold, and other approved precious metals like silver, palladium, and platinum.

Gold is among the few physical commodities that the Internal Revenue Service (IRS) allows IRAs to invest in. However, before you decide to invest in gold bullion, it is essential that you first understand the ins and outs of a gold IRA.

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Gold IRA FAQ’s

The FAQs below provide crucial information about gold and precious metals IRAs to help you make an informed investment choice:

What is a Precious Metals IRA?

A precious metals IRA allows you to buy IRS-approved gold or other precious metals like silver, platinum, and palladium within a tax-advantaged individual retirement account. Your precious metals are stored in a secure depository for safekeeping. Investing in precious metals helps protect your savings and preserve your purchasing power during periods of inflation when the dollar loses value. In addition, placing some of your retirement funds in a precious metals IRA protects you against currency and market crashes. The prices of precious metals like gold and silver tend to go up as the stock prices go down.

Can I Take Physical Possession of My Precious Metals?

When you invest in a gold IRA or other precious metals, you cannot take possession of them or store them personally. Instead, the metals are stored in a secured and insured depository. You will be eligible to begin taking distributions when you attain the age of 59 ½ years. When you reach this age, you can take your distributions in the form of precious metals or cash payments.

Can I Hold Precious Metals in My Existing IRA?

A conventional IRA is not designed to hold physical assets like silver or gold. Instead, you will need to open a self-directed IRA account with a qualified custodian in charge of managing the gold IRA.

What are the Penalties for a Rollover into a Precious Metal IRA?

If you have an existing IRA and 401 (k) account that meet the eligibility criteria to rollover or transfer into a precious metal IRA, you will not face any tax consequences or penalties when transferring your assets. Your gold IRA custodian can help you determine whether your current retirement plan is eligible for a rollover.

Which Types of Accounts Can Be Converted into a Gold-backed IRA?

Numerous types of retirement products and accounts can be converted into a precious metal IRA. These accounts include an IRA, 401 (k), Roth IRA, TSP, 403 (b), SEP, and annuity. Please note that there are some eligibility requirements that an account must meet before a transfer or rollover. When you contact your gold IRA custodian, they can confirm whether you can convert your retirement account.

How Long Will It Take to Rollover My IRA?

An IRA rollover takes less than two weeks. However, every application is unique – the exact period it takes to roll over varies. Your gold IRA custodian will help you gather and fill all the necessary documents for the rollover. The custodian will also provide you with an estimate of how long the rollover will take.

What are the Risks Associated with a Precious Metal IRA?

All types of investments carry some risks. Some of the risks associated with investing in precious metals are: the prices of precious metals might rise or fall over time, meaning that you may sell for more or less than you paid for. Unlike paper assets, precious metals do not yield income like dividends.

Must I Have a Gold IRA Custodian?

Yes. The IRS requires every investor to have a gold IRA custodian. The custodian administers and tracks the assets in your IRA account on your behalf

How Do I Find A Gold IRA Custodian?

To put gold in a self-directed IRA account, you need a custodian to create and administer the account. IRA custodians are usually banks, brokerage firms, credit unions, savings and loan associations approved by state or federal agencies to provide asset custody services. Your IRA custodian won’t select a precious metal dealer for you – this is your responsibility. However, most custodians have a list of precious metal dealers that they can recommend to you. Choosing the IRA custodian to use is complicated. Below are some of the crucial factors that you should consider when selecting a custodian:

  • Transparency: You should ensure that you understand all the involved costs upfront to avoid unpleasant surprises. Some custodians might have some hidden fees that you only discover after investing.
  • Flexibility: Every investor has unique needs and goals. You should go for a custodian who will cater to all your needs. Avoid custodians who adopt a one-size-fits-all approach.
  • Track record: The custodian you choose should have an outstanding reputation from objective third parties like Business Consumer Alliance (BCA) and Better Business Bureau (BBB). Also, consider what other customers say about the custodian.
  • Qualifications: You should only choose a custodian with all the required licenses, insurance, registrations, and bonds to protect your investment.

What Are The Costs Associated with a Gold IRA Account?

Owning a gold IRA will come with additional expenses you would not incur in a conventional IRA. The additional costs include:

  • The seller’s fees: You will incur mark-up costs depending on whether you invest in coins, bullions, proofs, etc.
  • Custodian fees: Even if you must encounter custodian fees with any type of account, the costs are higher for a gold IRA.
  • A retirement account set up is a one-time fee that you will encounter when establishing your new IRA account.
  • Storage fees: You will incur storage fees to hold your gold by an approved depository.
  • Cash-out costs: You will incur this cost if you intend to close your gold IRA by selling your precious metal to a third-party dealer. You could lose considerable capital unless prices have risen considerably since you acquired the gold.

Investing in precious metals is an excellent way of diversifying your self-directed IRA. Gold and silver are among the ancient investments that served as currencies for centuries. Precious metals are still considered a store of value, protection against currency deflation, and a hedge against inflation.

About the author

Nathan Tarrant

Nathan has worked in financial services, marketing, and strategic business growth for over 30 years. He was the founder and COO of a Queens award-winning financial services company based in the UK.

He operated as a financial & alternative investment advisor to delegates of the UN, World Health Organization, and senior managers of Fortune 500 companies in Geneva, Switzerland, after the 2008 financial crash.

Today he is head of operations and marketing for Alphascend Capital Group based in Virginia.

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