Precious Metals IRA Guide

What Is a Precious Metals IRA?

A precious metals IRA — often called a "gold IRA" — is a self-directed individual retirement account that holds physical gold, silver, platinum, or palladium instead of (or alongside) traditional paper assets. It operates under the same IRS rules as conventional IRAs, including contribution limits and distribution requirements, but is specifically structured to hold approved physical metals.

How It Works

Because the IRS requires IRA assets to be held by a qualified custodian, you cannot simply store gold at home inside an IRA. The process involves three key parties:

• Custodian: An IRS-approved financial institution that administers the self-directed IRA.
• Dealer: A precious metals dealer from whom your IRA purchases the metals.
• Depository: An IRS-approved secure vault where your metals are stored on behalf of the IRA.

Types of Precious Metals IRAs

Traditional Gold IRA

Contributions may be tax-deductible. Taxes are paid upon withdrawal in retirement. Subject to required minimum distributions (RMDs) starting at age 73.

Roth Gold IRA

Contributions are made with after-tax dollars. Qualified withdrawals are tax-free. No RMDs during the owner's lifetime. Ideal if you expect to be in a higher tax bracket in retirement.

SEP Gold IRA

For self-employed individuals and small business owners. Higher contribution limits than standard IRAs.

IRA Rollover: Moving Your Existing Retirement Funds

You can fund a precious metals IRA by rolling over funds from an existing 401(k), 403(b), TSP, or traditional IRA without incurring taxes or penalties, provided the rollover is executed correctly:

• Direct rollover: Funds transfer directly between institutions — the simplest and safest method. No tax withholding.
• Indirect rollover: You receive a check for the funds and must deposit them into the new IRA within 60 days. Mishandled indirect rollovers trigger taxes and a 10% early withdrawal penalty.

Most reputable precious metals IRA companies guide you through the rollover process and handle most paperwork on your behalf.

IRS-Approved Metals for IRAs

Not all precious metals qualify. The IRS has strict purity requirements:

• Gold: 99.5% pure minimum (American Gold Eagles are an exception at 91.67% — explicitly approved)
• Silver: 99.9% pure minimum
• Platinum: 99.95% pure minimum
• Palladium: 99.95% pure minimum

Popular IRA-eligible products include American Gold and Silver Eagles, Canadian Maple Leafs, Austrian Philharmonics, and most major mint bars meeting purity requirements.

Fees to Expect

Precious metals IRAs carry more fees than standard IRAs. Typical annual costs include:

• Account setup fee: $50–$200 (one-time)
• Annual custodian fee: $75–$300/year
• Storage fee: $100–$300/year (segregated storage costs more)
• Dealer markup: Premium over spot price when buying metals

Compare fees carefully across providers — a $200 annual cost difference compounds significantly over 20+ years.

Home Storage Gold IRAs: A Warning

Some companies advertise "home storage" gold IRAs. The IRS has not approved storing IRA-owned metals at home; doing so likely constitutes a distribution, triggering immediate taxes and penalties. Approach home storage IRA promotions with extreme caution.

Is a Precious Metals IRA Right for You?

A gold IRA may be a good fit if you:

• Have an existing 401(k) or IRA you want to diversify away from stocks
• Are concerned about long-term inflation eroding your retirement savings
• Want to hold physical gold with tax advantages
• Have a long investment horizon (10+ years) to benefit from the tax-deferred growth

It may not be ideal if you need high liquidity, are close to retirement with a short time horizon, or prefer lower-fee investment vehicles for most of your portfolio.