Gold IRA Rules & Set-Up Guide

Gold IRAs are a form of long term investment that most people are considering as their retirement plan. With precious metals IRA you can invest in different items which include precious metals, stocks, and bonds and lastly real estates. To successfully invest in IRA Gold, you need to choose a custodian that you can trust who can represent your best wishes in whatever transaction or trade that is to be done in the future. The goal of all investors is making the best of their opportunities and reducing the risks undertaken. Precious metals are just one area you can invest in otherwise you can also check other options like EFTs and CDs.

How Does a Gold IRA Work?


Gold IRA is an instrument that investors use to invest in or purchase physical gold. It is only relevant in the event that you want to purchase besides physical gold other precious metals like coins and bullions. As you already know mainstream IRA depending on the company you do it with will help you to invest in stocks of gold companies, mutual funds of the same firms, EFTs that track how gold index is performing among many other benefits. Here is a process that you can use for starting your Gold IRA before you can get to the benefits part.

  1. Find a custodian

Your first step is looking for the right custodian or trustee that actually provides Gold IRAs to their clients. This is because many custodians in the mainstream IRA investing in traditional assets are not allowed to either open or operate SDIRA inclusive of the Gold IRA. The market still has a lot of authentic options that you can choose as your custodian to help you choose a company and create IRA account to use for gold trades and saving.

  1. Fund Gold IRA

The next step for you is funding your newly created account. These are the funds that will be used for purchasing your precious gold including other fees. You only need to contribute to your Gold IRA as per the annual contribution limits. The limit for younger people is placed at $ 6000 for people below the age of 50 while the highest limit is for those aged 50 and more that have to pay $7,000. You can also rollover funds from your other IRA accounts to your Gold IRA provided the transaction is between the same companies, for instance pre-tax to pre-tax account.

  • Purchase your Gold

Do you know there are terms that the gold has to meet before they are IRS-eligible? These are some of the factors you must keep in mind when purchasing gold, for instances its purity which needs to be 99.5%. Other precious metals like silver have to be 99.9% while palladium and platinum have to be 99.95%. you should also research the eligibility terms for proof coins, small bullion bars and bullion coins.

  1. Find the right approved depository

Now that you have finished purchasing your gold, you need to think about how it will be kept or stored. IRA gold has to be stored with high security facilities that are impenetrable. Due to security concerns, you may not take the gold home but instead proof of storage as gold is stored with the approved depositaries in the world. There are many depositories that are IRS-approved inclusive of Delaware Depository Service Company, HSBC, JPMorgan Chase and CNT Depository.

  1. Making withdrawals

There are terms and conditions to how withdrawals can be made from your IRA gold account. The withdrawal process is also the same to selling off the purchased gold for cash. These terms will however depend on whether your account is traditional or Roth. The RMDs for traditional gold IRA is set at 72 years. All withdrawals are also taxed regardless of whether they are required or voluntary in nature. There are however no RMDs for Roth Gold IRA. There are also no taxations on the withdrawals and most importantly withdrawals made before the age of 59.5 years or before contacts finish 5 years are subject to 10% penalty charge.

  1. Keep track or accounts of all proceedings

It is the duty of the custodian that you choose or account trustee to help with keeping tabs on the new purchases and withdrawals made by your gold IRS account. This is also the reason you must choose a custodian that you can trust to have your best interest at heart.

Why should I invest in Gold IRAs today?

As a way of planning for their retirement, many people are investing in Gold IRAs and you are probably wondering why you need to do the same. There are several advantages to investing in Gold IRAs, however that is not to say there are no demerits for the same too. The first reason you should invest in gold IRA is to get the hedge against inflation and fluctuating economic times.

The value of gold has been determined which makes it possible to go at a loss with the same. Gold has been determined to be a secure measure and store of value. Unlike currencies, gold cannot undergo inflation which makes it stable for future storage, investment or planning.

What are the cons of Gold IRAs?

The first main disadvantage that investors have noted about going for gold IRA is in the high fee that is charged for a number of things. There are setup fees, management fees and fee charged on transactions and withdrawals that you are subject to. The fees are bound to be significant as they accrue over a long period of time.

The illiquidity nature of gold also makes it not ideal for investment as you may have a hard time selling gold. Due to the long nature of the searching process to find buyers for the gold, most sellers end up underselling at market price just to get over the whole thing in unfortunate situations. The risk of loss is always imminent as the gold maybe stolen, even though it is in very rare circumstances considering the high security of depositories of IRA gold.