Expert Insights: How to Transfer Your IRA to a Gold IRA Safely and Easily

Investing in gold and precious metals is one way to diversify your retirement savings. A gold IRA rollover is a popular way to add physical gold to a portfolio while retaining valuable tax benefits. However, you must adhere to IRS rules to benefit from this investment strategy.

In the following guide, we’ll cover everything you need to know about rolling over money to a gold IRA. From step-by-step instructions to selecting the best gold IRA company, keep reading to learn how to get started with a rollover today.

Ask the expert: What’s the most important thing to know about transferring your IRA to a gold IRA?

Kyle Ryan

CFP®

Be aware of the various maintenance costs of a Gold IRA. There may be more cost-effective ways to gain similar exposure through a regular IRA, or owning physical gold outside of an IRA.

Be aware of the various maintenance costs of a Gold IRA. There may be more cost-effective ways to gain similar exposure though a regular IRA, or owning physical gold outside of an IRA.

What is a gold IRA rollover?

A gold IRA rollover is the process of moving money from an existing retirement account to a self-directed IRA that can hold physical gold. You can roll over money from the following accounts into a gold IRA:

• Roth or Traditional IRA
• SIMPLE IRA
• SEP IRA
• 401(k)
• 403(b)
• 457(b)
• Other qualified plans such as profit-sharing plans

There are some restrictions though. For instance, you can only roll over a Roth retirement account to a Roth gold IRA. Meanwhile, SIMPLE IRA balances can only be rolled over after two years. Rollovers may also be restricted to only one per 12-month period.

While you could open a gold IRA without a rollover, the IRS limits annual contributions to these accounts. 

In 2024, you can only contribute $7,000 to an IRA if you are younger than 50 or $8,000 if you are 50 or older. However, with a gold IRA rollover, you can convert an unlimited amount of your existing retirement funds into physical gold.

How to execute a gold IRA rollover

Rolling over money into a gold IRA involves opening and funding an account, purchasing gold, and shipping it to an approved depository. Here’s a closer look at each step:

1. Select a gold IRA company: Working with an experienced gold IRA company will simplify the rollover process. They have staff available to assist with all the necessary paperwork, and they can help you select IRA-approved precious metals.
2. Open an account: Most traditional brokerage firms don’t handle self-directed IRAs, which are required to hold physical gold. Instead, you’ll need to use a custodian to set up your gold IRA. The company you chose in step one can typically direct you to a trusted custodian.
3. Initiate the rollover: You may have to contact your existing retirement account administrator to request the paperwork needed to move money from your current plan to your gold IRA. Rollovers can be direct or indirect, and we’ll discuss that in a minute.
4. Purchase gold: Once money has been moved to your new gold IRA, you can use those funds to buy gold as well as silver, platinum, and palladium. The IRS has regulations about which physical metals can be held in a retirement account—for instance, they must meet certain purity and manufacturing requirements—and your gold IRA company should be able to help identify qualifying products.
5. Ship items to a depository: The IRS doesn’t allow gold in an IRA to be stored at home so you will need to use an approved depository. Your gold and precious metals must be shipped directly from the dealer to the depository for secure storage.

Gold IRA rollover vs. transfer

There are several ways to move money from one retirement account to another.

Direct rollover

A direct rollover occurs when you request a distribution from your current retirement plan administrator for funds that will be put directly into your gold IRA. In this case, you may get a check in the mail, but it will be addressed to your new IRA and can only be deposited into that account. No taxes are withheld with a direct rollover.

Trustee-to-trustee transfer

This option is similar to a direct rollover, but instead of sending you a check, your current IRA provider will transfer money to your gold IRA provider. As with a direct rollover, no taxes are withheld for this transaction.

Indirect rollover

The IRS calls this a 60-day rollover. Money from your current retirement account is paid directly to you, and you then have 60 days to deposit it into an eligible retirement plan such as a gold IRA. 

Taxes are withheld from the payment, but they will be reimbursed at tax time assuming you deposit the entire distribution amount—including the amount withheld for taxes—into your new IRA within 60 days. If you miss this 60-day deadline, you will owe a 10% penalty on the withdrawal if you’re under 59½ years of age. 

Which method is best?

Each method for moving money between accounts has advantages and disadvantages.

The indirect rollover method involves handling the funds yourself, which can be more flexible but also carries the risk of missing the deadline.

Meanwhile, with a direct rollover or trustee-to-trustee transfer, your current IRA custodian sends the money right to your gold IRA custodian without you handling the funds. Because you take no cash out of the account, you don’t risk missing the 60-day window, and no penalties are involved. Many investors prefer these methods as they involve less hassle and reduce the risk of errors.

Expert question: Is there a method of IRA transfer that you recommend as a CFP?

Ask the expert

Kyle Ryan

CFP®

A direct rollover, when allowed, is typically the cleanest way to accomplish this type of rollover. We always recommend this when possible. Trustee-to-trustee takes on a little more hassle, so it is less preferred. Save indirect rollovers for special cases when the custodian is giving us an incredibly difficult time selling an existing investment. There is a major risk if one cannot replace the withdrawn funds. You are only allowed to do this once per year, so doing it early in the year presents an extra risk.

Will I pay gold IRA rollover or transfer fees?

No IRS or other government fees are associated with a gold IRA transfer. However, your account administrator may charge fees depending on the company’s policies.

If you’re considering transferring funds into a gold IRA, it’s best to contact your current IRA custodian to inquire about any potential fees or charges you might incur.

Are there tax implications from a gold IRA rollover?

A gold IRA transfer protects you from the potential penalties associated with rollovers. With a rollover, if you don’t deposit the funds within 60 days and are not of retirement age, you could face a 10% penalty and taxes for taking money out of a retirement account. You’re limited to one rollover per year.

Opting for a transfer sends the funds directly to your gold IRA custodian, eliminating the risk of fees or penalties. The IRS doesn’t tax the transfer because no money is withdrawn and given to you.

Pros and cons of converting an IRA to a gold IRA

Moving money from a regular IRA to a gold IRA has many benefits from an investment and tax perspective, but there are some downsides to consider. Take a look at the following pros and cons before moving your money to a gold IRA.

Pros

• Hedge against inflation

  Gold often increases in times of economic uncertainty.

• Choice of tax benefits

  A gold IRA can be either a traditional account—with tax-deductible contributions—or a Roth account, which doesn’t come with a deduction but offers tax-free income in retirement.

• Asset diversification

  Diversification means owning a variety of assets and is considered a cornerstone of sound investing. A gold IRA is the only way to diversify your retirement savings with physical precious metals in a tax-advantaged account—so long as you don’t have too much of your aggregate net worth invested in a gold IRA, thus reducing your investment diversification.

• Long-term growth stability

  While gold might see some volatility in the short term, it has historically gained value over time.

Cons

• Additional costs

  Gold IRAs come with fees—notably custodian and storage fees—that regular IRAs don’t.

• Less liquidity than other investments

  While stocks and mutual funds can be converted into cash at the click of a button, liquidating gold is more involved and takes longer.

• Limits on gold purchases and storage

  The IRS limits the type of gold you can hold in a gold IRA, and you can’t store the gold at home either.

When deciding if a gold IRA is right for you, I focus on what growth rate gold would need to be at to break even based on maintenance costs.

Kyle Ryan

CFP®

How to choose the best gold IRA company

The best gold IRA company can depend on your needs. If you are new to investing, you may want to look for a company that offers superior investor support. If you are concerned about how to liquidate gold at retirement, look for a company with a great buy-back guarantee.

Here are what we consider to be the top gold IRA companies.

FAQ

Can I transfer any IRA to a gold IRA?

Yes, you can transfer most types of IRAs, including traditional, Roth, SEP, and SIMPLE IRAs, to a gold IRA. However, employer-sponsored retirement plans—for example, 401(k)s—may need to be rolled over to a traditional IRA first before transferring to a gold IRA. Make sure to consult your IRA custodian for specific eligibility and transfer requirements.

Can I roll over my IRA to a gold and silver IRA?

Yes, you can roll over your IRA to what is often referred to as a “gold IRA,” which can actually hold a range of precious metals, including gold, silver, platinum, and palladium. This gold and silver IRA, or precious metals IRA, offers diversification within various precious metals as long as the coins or bars meet IRS fineness standards. A gold IRA is similar to other IRAs but allows you to invest in these approved metals, providing flexibility and a hedge against economic uncertainties.

What types of gold can I hold in a gold IRA?

You can hold specific types of gold in a gold IRA, including gold coins and bars that meet IRS purity requirements. Gold must be at least 99.5% pure. Acceptable items include American Gold Eagles, Canadian Gold Maple Leafs, and gold bars from approved refineries, including Credit Suisse or PAMP Suisse.

A gold IRA also allows you to hold other precious metals, such as silver (which must be 99.9% pure), platinum, and palladium (both of which must be 99.95% pure). All metals must meet specific fineness requirements and be produced by accredited manufacturers or government mints.

How long does a gold IRA rollover take?

A gold IRA rollover typically takes 2 to 4 weeks, depending on the custodians’ efficiency and how soon all necessary paperwork is completed. Direct transfers may be faster because the funds are moved directly between custodians.

Are there limits on how much gold I can hold in my IRA?

There are no specific limits on how much gold you can hold in a gold IRA, but your annual contributions must adhere to standard IRA contribution limits set by the IRS. For 2024, the contribution limit is $6,500 for individuals under 50 and $7,500 for those 50 and older.

What happens to my gold IRA when I retire?

When you retire, you can take distributions from your gold IRA in cash or physical gold. The IRS requires mandatory minimum distributions (RMDs) starting at age 73. If you opt for physical gold, your custodian will arrange for the delivery of your gold to you, although storage and shipping fees may apply.