How to Start Investing in a Gold IRA

With individual retirement accounts (IRAs), you have two options: You can use your account to invest in stocks, bonds, ETFs, or other similar securities, or you can choose a self-directed IRA—a.k.a a gold IRA or precious metals IRA.

With a self-directed IRA, you can purchase IRS-approved metals and tangible assets, such as art, collectibles, and real estate to diversify your portfolio and protect against inflation. If you’re planning for your retirement and wondering how to invest in a gold IRA, this guide can walk you through the process.

Steps to start investing in a gold IRA

Follow these four steps to open a gold IRA.

1. Choose a gold IRA company
2. Fund your account
3. Select your metals
4. Monitor the performance of your metals

Step 1: Choose a gold IRA company to work with

Choosing a gold IRA company is the first step toward opening your IRA. These companies will help you start the account, transfer funds, purchase your metals, and ship your gold and silver to an approved depository for storage.

In some cases, the company will also act as your account’s custodian, meaning it will handle the paperwork and IRS compliance for your IRA.

Gold is a popular investment, and you can choose from many gold IRA companies, each with unique fees, services, and customer care quality. If you’re opening a gold IRA, you’ll want to choose carefully to ensure you get the best service at the best possible price.

Once you select your company, you’ll need to fill out the paperwork to open your IRA and then fund the account. You’ll also need your driver’s license (or other state-issued ID) and details of your retirement accounts if you plan to transfer money from a 401(k) or other IRA.

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Step 2: Fund your account

After you open your account, you’ll need to fund it before you can begin purchasing and investing in metals.

You have three options for funding your gold IRA:

1. Cash contribution: You can use cash, a check, or a wire transfer to fund your account, just as you would with a typical savings or investment account. Your bank might charge a fee if you choose a wire transfer.
2. Rollover: You’ll use a rollover if you plan to take a distribution from your retirement account and roll it into your gold IRA. If you want to go this route, contact your current account’s administrator to initiate the process. You can also choose to take a cash distribution from your account and deposit it in your gold IRA. Just make sure you do it within 60 days, or you could face a 10% penalty (unless you’re over 59 and a half years of age.)
3. Transfer: You can also do a direct account-to-account transfer. To do this, you’ll fill out a form with the administrator of your current account, or your gold IRA custodian may reach out on your behalf. These types of transfers can take up to five days and are tax- and penalty-free.

Most investors choose direct transfer to minimize hassle and the potential for penalties.

Step 3: Select your metals

When the money has cleared, and your account is funded, you can start purchasing your gold, silver, and other precious metal investments. The IRS only allows metals of a specific type and purity to be held in self-directed IRAs, so be mindful of what you buy.

The exact process for purchasing your metals will depend on which company you open an account with. In some cases, your gold IRA firm will sell IRS-approved metals so you can purchase your coins and bullion from it.

With other companies, you will need to purchase your investments from a separate precious metals dealer and direct your custodian to buy the items on your behalf using your IRA funds.

Step 4: Monitor the performance of your metals

Your ability to monitor the performance of your gold IRA depends on the account custodian. Some companies offer online dashboards for monitoring your investments’ performance, but others don’t.

If regular updates and insights into your IRA’s performance are a priority for you, ask a representative whether the company offers these services. Your custodian should be able to get you access to such monitoring.

What to consider before starting a gold IRA account

Before you open your gold IRA, it’s important to understand how these accounts work and what they entail. Here are the basics:

• Type of account
• Contribution limits
• Store your gold
• Fees

Type of account

To start, you’ll need to know what type of account you want to open. Self-directed IRAs can be traditional IRAs or Roth IRAs, and the difference comes down to how you want your money taxed.

• With Roth IRAs, you pay taxes before you contribute the money to your account.
• With traditional IRAs, you pay taxes when you withdraw the money.

Contribution limits

There’s a limit to how much you can invest in a gold IRA, which varies by age.

• If you’re under 50, you can contribute up to $7,000 per year in a self-directed IRA (as of 2024).
• Once you hit 50, the limit jumps to $8,000 (as of 2024).

Store your gold

You must store gold and silver bought through a precious metals IRA with an approved bank or depository. Some companies market “self-storage” IRAs, but their legality is questionable, and you could face IRS penalties or fines for holding your gold purchases.

That said, you can opt to take your gold, silver, or other metal as a distribution later once you become eligible. (You can take them earlier, but you’ll pay a 10% penalty.)

Fees

Gold IRAs come with fees. These can include:

• Setup fee
• Storage fee
• Management fee from the account custodian you choose. These range from $250 to $350 for the first year and $150 to $250 annually after that.

Fees on typical IRA accounts are often much lower (or sometimes nonexistent), and they don’t include storage fees.

Expert take

Erin Kinkade

CFP®

In my experience, gold has been a reliable investment for those who understand the investment and the rules surrounding holding precious metals in an IRA. I think a drawback is the potential lack of liquidity (unless it’s a gold exchange-traded fund), specifically at a time when the investor may need fast funds.

Why open a gold IRA?

Making a gold IRA a part of your long-term retirement plan can be a smart move for several reasons. First, it can diversify your portfolio. If you’re heavily invested in stocks, mutual funds, exchange-traded funds (ETFs), and other securities tied to the stock market, your portfolio could be at higher risk if the market struggles.

Funneling some of those funds into gold, silver, and other precious metals is a way to mitigate that risk and ensure your portfolio can withstand a market downturn. (It helps ensure you’re not putting too much in one area, so if one type of asset or security loses value, you have investments elsewhere to use during retirement.)

Precious metals—and gold in particular—can also be an excellent hedge against inflation because their price often rises when the value of the U.S. dollar decreases.

Don’t forget about the opportunity for profit. Gold prices have increased in recent years, and many experts think they’ll continue to do so.

Expert take

Erin Kinkade

CFP®

I would never recommend investing an entire portfolio in one stock, sector, or specific fund, including gold and other precious metals. I think gold can be an excellent hedge against market volatility, but it should be a part of a diversified portfolio. Compared to other investments, gold tends to hold a steady value with little volatility—and it increases in value over time.

How long does it take to open a gold IRA?

You should be able to complete the gold IRA application process in 10 to 15 minutes. Processing is fast, too, and your account can be opened in one business day in most cases.

The rest depends on the speed of your funding. As long as the custodian on your current account is quick to respond, transfers and rollovers typically take about seven to 10 business days. Funding your account with a mailed physical check may take longer.

Again, these timelines can vary by IRA company, so make sure to ask the firm you’re considering.

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When can I withdraw from my account?

Per IRS rules, you can start taking penalty-free distributions from your account starting at age 59 and a half. Before that, a 10% penalty applies to withdrawals.

Once you reach 70 and a half (or 72, depending on your birthday), you’ll be required to take a minimum distribution each year. The exact amount will depend on your age, the type of account, and other factors. You can choose to take your distributions in cash or via the actual metals you’ve purchased. These are called “in-kind” distributions.

If you’re looking to start a gold IRA account to diversify your investment portfolio, protect against inflation, boost your long-term wealth, or achieve another investing goal, be sure to compare your options first. Gold IRA companies can vary, and choosing the best one for your investing goals is critical to ensure a comfortable and hassle-free retirement.

As a starting point, you can check out our picks for the best gold IRA companies.

Gold IRA FAQ

Can I transfer funds from another retirement account to a Gold IRA?

Yes, you can transfer funds from a retirement account, such as a 401(k) or another IRA, to a gold IRA through a direct transfer or rollover process.

What types of metals can I invest in with a gold IRA?

With a gold IRA, you can invest in various IRS-approved precious metals, including gold, silver, platinum, and palladium, subject to specific purity requirements.

How do I store the metals in my gold IRA?

The metals in your gold IRA must be stored with an IRS-approved depository to comply with IRS regulations. Self-storage of IRA metals is not legal and could result in penalties.