Many people want to buy gold but don’t know how to buy it in an IRA. They come to our expert team asking for details on how the process works. One of the first steps is to find a precious metals IRA custodian.
We usually help with this process, and this article covers everything we share to help guide our customers. Cutting to the chase, we often recommend Gold Star Trust if you don’t already have a custodian in mind.
Learn all you need to know about Gold IRA custodians, including what they are and why you need one. We’ll explain the different types of retirement accounts that can hold precious metals and how to choose the right custodian for your needs.
You’ll also get an idea of the fees involved in setting up and maintaining a Gold IRA so you know exactly what to expect.
What is a precious metals IRA custodian?
If you’re planning to allocate some of your retirement funds into alternative investments, IRS regulations require you to use a custodian.
You can’t just go out and buy real estate, gold, or crypto without involving this third-party company to manage your investments. This is because if you hold these assets directly, the IRS considers it a distribution, which means it wouldn’t count as a retirement account. It’s similar to how you hold stocks and bonds with a traditional IRA custodian like Vanguard or Fidelity.
Gold or Silver IRA custodians manage self-directed IRA accounts that hold physical gold or other precious metals. They are non-bank companies that buy and sell gold on behalf of their customers.
The role of a Gold IRA custodian
These custodians follow IRS regulations for gold investments and take care of your account in the following ways:
Rollover assistance: Helping you rollover funds from your 401(k) or traditional IRA into a self-directed IRA.
Precious metals trading: Buying and selling IRA-eligible gold, silver, or platinum coins or bars.
Asset reporting: Recording and reporting on your precious metals assets.
Secure storage: Arranging for secure storage of your gold and other precious metals.
IRS compliance: Keeping you updated on IRS regulations for your self-directed IRA account like Required Minimum Distributions (RMDs).
What’s not covered by Gold IRA custodians
Gold IRA custodians don’t sell precious metals investments. Instead, you’ll purchase the assets of your choice from a Gold IRA company. They also don’t provide investment advice or manage your portfolio—those decisions are entirely up to you. The custodian you choose simply follows your instructions.
Types of precious metals allowed in IRAs
If you want to open a precious metals IRA, the IRS has specific requirements. This includes which types of metals, their purity, and even manufacturing standards. You can hold any of the following:
Gold and Silver IRAs
Most people hold gold and silver investments in these retirement accounts. Gold is more popular in a precious metal IRA because it’s a steady asset.
In fact, the treasuries of most countries hold gold in reserves to hedge against market conditions. This could be anything from the possible devaluation of their own currency to fears about possible recessions.
Silver is different because it can have strong industrial demand. For example, you’ll find silver in solar panels and electric vehicles. So, you might hold silver in your IRA if you think there’ll be increased demand in the future.
The IRS-approved precious metal assets you can buy include:
Gold
You can buy gold bullion coins or bars that are at least 99.5% pure. Some of the most common coins include:
- American Gold Eagle
- American Gold Buffalo
- Canadian Gold Maple Leaf
For bars, you can buy brands like PAMP Suisse Gold Bar or Valcambi Gold Bar.
Silver
Silver must be at least 99.9% pure. Some of the best silver coins for your IRA include:
- American Silver Eagle Coin
- Canadian Silver Maple Leaf Coin
- Austrian Silver Philharmonic Coin
You can buy silver bars in any number of sizes from manufacturers like Johnson Matthey, PAMP Suisse and Royal Canadian Mint.
Platinum and other metals
The IRS also allows platinum and other metals like palladium coins in your IRA. Just like silver, platinum has industrial uses, plus it’s actually more rare than gold. So, this could be a good investment if you think demand will increase.
Metals you can add to your IRA account must be 99.95% pure and can include coins like:
- American Platinum Eagle
- Canadian Platinum Maple Leaf
- Austrian Platinum Philharmonic
Qualified platinum bar manufacturers include PAMP Suisse, Valcambi, and Credit Suisse.
Retirement accounts provided by precious metals IRA custodians
You can invest in a precious metal IRA through a number of self-directed IRA retirement accounts, including:
Traditional IRA
In this account type, all the funds are pre-tax dollars, so your investments grow tax-deferred. You pay taxes when you withdraw funds at retirement age.
The IRS tax rules may allow you to contribute to this account each year, and those contributions might be tax deductible.
For 2024, the IRS allowed max annual contributions are $7000 if you are under 50 or $8000 if you are over.
Roth IRA
In Roth IRAs, you contribute after-tax dollars, so your investments grow tax-free and are also tax-free when you withdraw them.
You can withdraw your original contribution amount tax-free at any time, but you can’t touch the gains until you reach retirement age.
SEP IRA
Small business owners who have SEP IRA retirement accounts can also use those funds to invest in physical precious metals.
You can set up a Traditional IRA or Roth IRA and invest 25% of your compensation or a max of $69,000 in 2024.
401(k) rollover
If you have a retirement account under a previous employer’s 401(k), 403(b), 457(b) or TSP, you can transfer some or all of the funds to a Gold self-directed IRA custodian.
Self-directed IRA custodian fees
Just like you pay maintenance fees to traditional investment accounts, precious metals IRAs have custodian fees.
The best Gold IRA custodians publish their fees so you know what to expect.
Types of fees
These are the common fees you’ll find with Self-Directed IRAs:
Setup fee: This initial one-time fee applies when you open your Gold IRA account.
Maintenance fee: Custodians charge an annual fee to manage your account. This covers administration costs and reporting and verifying compliance with IRS regulations.
Storage fee: You can’t store your IRA gold at home. Self-directed IRA custodians place your assets in a secure depository and pass on the storage fees to you each year.
Transaction fees: Your custodian may charge fees for buying, selling, or transferring gold within your IRA.
Other fees: Some Gold IRA custodians have fees for related services like wire transfers, ACH, or paper statements.
Fee amounts
For Swiss America customers who don’t already have a Gold IRA custodian in mind, we often recommend Gold Star Trust. Their fees include:
Account setup: $50
Annual maintenance: $90
Storage fees: $100 for comingled storage. If you want dedicated storage, this requires custom quotes on pricing.
Buy/sell/exhange: No fee. Note that you might still have shipping fees for liquidations and in-kind distributions.
Choosing a Gold IRA custodian
If you don’t already have a Gold IRA custodian in mind, here’s what you should look for to choose the best one for your needs:
Reputation: Start by researching the reputation of the Self-Directed IRA custodians you are considering. You can post in Reddit forums like r/gold Google to see company reviews and ask for recommendations from your Gold IRA company.
Experience: It’s best to work with a company that has been in business for several years and has a proven track record. This is your retirement account – don’t trust it to a company that doesn’t have a good amount of experience.
Customer support: As Reddit user monumentmetals shared in the r/gold forum ” IRA is all about customer service. They are all pretty much the same, but that’s the difference. There’s no worse feeling than having your money held hostage by a company that won’t call you back. “
Fees: Evaluate precious metals IRA custodians on their fee structure, amounts and transparency. For example, Gold Star Trust doesn’t charge you to buy, sell, or exchange assets in your Gold IRA. You don’t want to be nickled and dimed everytime you decide to change something with your assets.
Investment options: Many people who look at gold and silver investments also want the flexibility to buy other alternative assets. Your Gold IRA custodian should have expertise in precious metals IRAs, but they should also allow you to add other investments if you want.
Accessibility: Find out what kind of reporting, day-to-day visibility, and the withdrawal process is for your funds. The best custodians have good answers and flexibility in all of these areas.
Choosing a Gold IRA company
As we mentioned above, Gold IRA custodians do not sell physical precious metals.
To buy gold, you’ll work with a precious metals dealer, often called a “Gold IRA company”. So, how do you evaluate Gold IRA companies and make the best choice? Here are our top recommendations:
Longevity
Look for a Gold IRA company that has been in business for decades. This means they have been through various economic ups and downs. Plus it means they aren’t a fly-by-night operation looking to scam customers.
Since the early 1980s, Swiss America has helped investors through various economic cycles and market shifts. Our decades of experience make us a seasoned, trustworthy partner for buying physical precious metals.
Customer reviews
Check out reviews and customer testimonials. The best Gold IRA company should have numerous positive reviews and ratings.
Swiss America’s thousands of happy clients enjoy fast delivery of high-quality metals, responsive and knowledgeable customer service, and consistent performance that meets or exceeds expectations.
Education and Advice
The right Gold IRA company should provide education and guidance to help you make the best decisions for your situation. Swiss America focuses heavily on investor education with resources like:
Video and podcast: We share economic news and updates in our regular podcast and Youtube videos to help you understand the drivers that impact precious metals investments.
Research reports: You can find several in-depth research reports from our team covering topics like The Secret War On Cash, The Timeliness Truth About Gold & Silver, and The Silver Report.
Daily news: Get the latest update on what’s happening in the world and its impact on Gold IRA investing through our newsletter or daily news page.
Broker expertise: Every member of our team has a deep understanding of the gold market and extensive training. We’re here to help you evaluate options, convert your IRA to gold, choose the right custodian, and even secure storage methods.
Transparent pricing
Look for companies that are up-front about pricing for Gold IRAs and precious metals investments. At Swiss America, we provide transparent pricing for both our metals and any transaction costs. You’ll know exactly what the premium is above the spot price and any establishment fees for Gold IRA accounts.
Reporting
Check the status of your account value at any time via our online portal. This information gives you real-time value of your physical gold or other metals.
Gold trade program
Swiss America customers benefit from our gold trade program, which lets you sell your gold back to us when needed. This gives you liquidity for emergencies or portfolio rebalancing.
Pros and cons of a precious metals IRA
Is a Gold IRA right for you? The answer depends on your goals and financial plans. It’s a good idea to be aware of the pros and cons of investing in precious metals. Here are areas to consider:
Pros of a Gold IRA
Reasons why people benefit from Gold or Silver IRAs include:
Diversification
Investors use Gold IRAs to diversify their investments beyond paper assets like stocks, bonds, and mutual funds. The whole goal of diversification is to not have all your “eggs in one basket.”
With this strategy, you increase your chances of positive returns despite what might be happening with any one of your investment types. Experts usually recommend keeping about 10% of your retirement account in a physical precious metal investment.
Hedge against inflation
The value of gold moves differently than paper assets and investors often use precious metal IRAs to provide protection against inflation. The reason investors see gold as a safe haven investment is because it’s a limited resource.
Governments can’t just produce extra gold but they can print more money. As they add more money into the economic system, it decreases the value of what those funds can buy.
We saw this in 2022 when the federal government passed several relief packages during the global pandemic. These additional funds and dollars pushed inflation beyond normal annual growth, reaching a ten-year peak of 6.6%.
Tangible asset ownership
Some investors want to own physical assets. A Gold IRA is not investing in mining stocks, ETFs, or mutual funds. It’s a way to actually own a precious metals investment that you store through your IRA custodian.
This gives investors a sense of security and control that paper assets can’t offer.
Tax benefits
Traditional IRAs and Gold IRAs offer tax advantages. As we discussed with different account types, you can grow your portfolio with tax deferrals or even tax-free. If you qualify, you can contribute to your Gold IRA and deduct those contributions.
Cons of Gold IRA
You should always consider the drawbacks of any investment. For a Gold IRA, these include:
Fees
This type of IRA has costs for custodian fees, storage, and insurance. Be aware of these details so you can consider the impact on your portfolio’s overall performance.
No dividends or interest income
Gold is an easy and simple investment, but it also doesn’t pay dividends or interest income. All this means is that your returns come from the incremental market value between the price you paid and the selling price if you decide to liquidate.
Potential penalties and taxes for early withdrawals
Just like any other investment in an IRA, you can’t just withdraw funds without following specific IRS guidelines. These tax rules include:
Early withdrawal penalty: If you take money out of your Gold IRA before you turn 59½, you’ll typically get hit with a 10% penalty on the amount you withdraw. This is the IRS’s way of incentivizing you to keep your retirement savings intact until you actually retire.
Ordinary income tax: The IRS considers any money you take out of your Gold IRA as regular income, so you’ll owe ordinary income tax on that amount. The more you take out, the higher your tax bill could be, especially if it puts you into a higher tax bracket.
State taxes: Depending on where you live, you might owe state taxes on the money you withdraw from your Gold IRA. Each state has its own rules, so verify what applies to you.
Required minimum distributions (RMDs): If you have a traditional IRA with pre-tax dollars, once you hit 73 the IRS requires you to start taking a minimum amount out of your Traditional IRA each year. This rule basically makes sure that you eventually pay taxes on the money you’ve deferred.
5 Easy steps to open a Gold IRA
Once you’ve decided to invest in a Gold IRA, here’s how to get started:
Step 1: Choose a precious metals dealer that you’ll work with to buy precious metal assets.
Step 2: Choose a Gold IRA custodian and open an account.
Step 3: Fund your account through a transfer, rollover, or new contribution.
Step 4: Work with your gold dealer to decide on which IRS-approved precious metals you want to add to your portfolio.
Step 5: Direct your Gold IRA custodian on which physical gold bullion and other assets to purchase.
Gold and silver IRA custodians wrapping up
Now that you understand Gold IRA custodians, you have the information you need to diversify your retirement portfolio with precious metals. This type of IRA can be a smart hedge against inflation and economic uncertainty.
Choose the right custodian after checking out their reputation, fees, and customer support. Consider the IRA types available and make sure you follow IRS regulations to avoid penalties with these tax-advantaged accounts.
Ready to secure your retirement with precious metals? Reach out to the expert team at Swiss America. We’ll help you set up your Gold IRA and find the right solution for your financial goals.
Precious metals ira custodian: FAQs
Can I hold precious metals in an IRA?
Yes, you can hold precious metals in a self-directed IRA. This allows you to invest in gold, silver, platinum, and palladium as part of your retirement portfolio.
Are Gold IRAs legit?
Yes, Gold IRAs are legitimate and regulated by the IRS. They allow you to invest in physical gold as part of your retirement savings.
How safe is a precious metals IRA?
A precious metals IRA is generally safe if you choose a reputable custodian and secure storage. Like all investments, it comes with risks like market volatility.
Note: The information in this post is for informational purposes only and should not be considered tax or legal advice. Please consult with your own tax professionals before making any decisions or taking action based on this information.
