Although IRAs used to be limited to holding American Eagle gold and silver coins, IRAs can now invest in IRS-approved gold, silver, palladium, and platinum bars and coins. Not all gold investments can belong to an IRA. The basic rule is that an IRA cannot own a collectible and precious metals are defined as collectibles, regardless of whether it is an investment in gold bars or coins. Luckily, there are exceptions to the general rule for gold, silver, platinum, and palladium, which are held in specific forms. A gold certificate is simply a piece of paper that can be redeemed for physical gold
If you have a precious metal IRA, your IRA directly owns physical gold bars or coins, which you select and order directly. You can store coins or gold bars in a precious metal IRA. Despite the colloquial term “gold IRA,” you can hold silver, platinum, and palladium on this account. Beware of companies that claim they don’t charge for account management, storage, and insurance.
A silver IRA is also a traditional IRA, a ROTH IRA, a SEP IRA, a SIMPLE IRA, or an inherited IRA that is managed by the account holder himself and holds valid forms of physical silver coins or silver bars. In general, the standard fees charged by most custodian banks include an account opening fee, an annual administrative fee (including bank statements and documentation), and a storage fee. If the account holder does not transfer the money within 60 days, those funds are taxed and may be penalized for early withdrawal. Once you’ve set up your Gold IRA, you can transfer or transfer the funds from an existing IRA or other retirement plans
If you die, your IRA and its assets are transferred to your IRA beneficiary or beneficiaries. IRS rules allow funding a Gold IRA with funds from another IRA, 401 (k), 403 (b), 457 (b), or Thrift Savings Plan. There is no limit to the number of direct IRA transfers from one IRA custodian bank to another that you can initiate. When it comes to gold coins or gold bars, you have several gold products to choose from that you can deposit into your IRA account.
To own gold, whether in coins or gold bars, in an IRA, you need a genuine, self-directed IRA offered by a few custodian managers. An important caveat with both IRA transfers and transfers is to consider how much you want to deposit into your new account. Self-managed IRAs, which include gold IRAs, have the same contribution and distribution limits based on your age as traditional IRAs. If you withdraw gold from your IRA before you reach the age of 59½, you’ll have to pay income tax on the value of that gold, as well as a 10% penalty for an early withdrawal from a retirement account
It’s important that you understand all costs and expenses before you buy physical gold to keep in an IRA. If you’re wondering what “IRS-approved gold” is, note that there are minimum metal fineness requirements as well as type, size, and weight specifications.