Gold IRA Basics: Your Questions Answered
Author: GoldClarity Research Team
Last Updated: September 5, 2025
What is a Precious Metals IRA?
A Precious Metals IRA is a type of Self-Directed Individual Retirement Account (SDIRA). Unlike standard IRAs that hold paper assets like stocks and bonds, a Precious Metals IRA allows you to hold physical, tangible assets—specifically, gold, silver, platinum, or palladium—that meet purity standards set by the IRS. It operates under the same tax rules and contribution limits as a conventional IRA, but the assets inside are real metal, stored securely on your behalf.
The 5-Step Process to Opening a Gold IRA
Reputable companies like Augusta Precious Metals handle most of the paperwork with you, making the process simple. Here is the typical process:
- Choose Your Company: Select a trusted precious metals dealer to act as your liaison.
- Open Your SDIRA Account: Your dealer helps you set up an account with an IRS-approved custodian (e.g., Equity Trust).
- Fund Your Account: Move funds from an existing 401(k), IRA, or other retirement plan via a tax-free rollover or transfer.
- Select Your Metals: Choose the IRA-eligible gold and silver for your portfolio from options your dealer provides.
- Store Your Metals: Your chosen metals are shipped fully insured to a secure, IRS-approved depository for storage.
Key IRS Rules & Considerations
If you have decided to add physical precious metals to your retirement assets, it's important to understand the landscape and the strict IRS rules.
Key Rules You MUST Know
- No Home Storage: You cannot legally store your IRA metals at home. Doing so is considered a distribution by the IRS and will trigger taxes and penalties. The metals must be held in an approved depository.
- Purity Standards: Your metals must meet minimum purity levels: 99.5% for gold and 99.9% for silver. Reputable companies only offer IRA-eligible products.
- Distributions: Required Minimum Distributions (RMDs) apply to Traditional Gold IRAs starting at age 73, just like with a standard IRA.
Benefits vs. Considerations
Potential Benefits
- Own a tangible, physical asset.
- Historically used as a hedge against inflation.
- Offers portfolio diversification.
- Same tax advantages as a standard IRA.
Important Considerations
- Involves annual fees for custody and storage.
- Does not pay dividends or interest.
- Liquidation process is different from stocks.
- Subject to market price volatility.
Frequently Asked Questions
How does a Gold IRA compare to owning physical gold directly?▾
A Gold IRA offers significant tax advantages, as your investment grows tax-deferred or tax-free, avoiding the high 28% collectibles tax. However, you have less control, as all transactions and storage are handled by a custodian. Owning gold directly gives you immediate physical control but comes with a much less favorable tax treatment on any gains.
What are the different types of Gold IRAs?▾
Gold IRAs are available as Traditional, Roth, and SEP IRAs. A Traditional Gold IRA is funded with pre-tax dollars for tax-deferred growth. A Roth Gold IRA is funded with after-tax dollars, allowing for tax-free growth and withdrawals. A SEP Gold IRA is for self-employed individuals and small business owners, offering higher contribution limits.
How much does it cost to set up a Gold IRA?▾
Initial costs typically include a one-time account setup fee (around $50) plus annual fees for both the custodian (account administration) and the depository (secure storage and insurance). These annual fees usually total around $200-$300. Many top-tier companies offer promotions to waive these fees for several years for new clients.
What are the contribution limits for a Gold IRA?▾
For 2025, the maximum IRA contribution is $7,000 for individuals under age 50. Those age 50 and older can make an additional "catch-up" contribution of $1,000, for a total of $8,000. This limit applies to the combined total of all your IRA accounts.
What is the difference between a direct and an indirect rollover?▾
A direct rollover is when funds are transferred directly from your old retirement account administrator to your new Gold IRA custodian. This method is highly recommended as it is seamless and avoids any tax implications. An indirect rollover is when a check is sent to you personally, and you have 60 days to deposit it into the new IRA. This method is risky because if you miss the deadline, the entire amount is considered a taxable distribution, and 20% is automatically withheld for taxes from 401(k)s.
What is the "spread" or markup on coins?▾
The spread is the difference between the dealer's cost for a precious metal and the price they sell it for. This is the primary way Gold IRA companies are compensated. A reputable company will be transparent about their spread, which typically ranges from 5% to 8% on common bullion products, while less reputable dealers may charge significantly more.
How does a Gold IRA compare to a Gold ETF?▾
A Gold IRA involves owning specific, physical gold bars and coins, whereas a Gold ETF involves owning shares in a trust that holds gold. You cannot take physical delivery from an ETF. Here is a comparison:
| Feature | Gold IRA | Gold ETF |
|---|---|---|
| Ownership | Direct ownership of physical metal | Shares in a trust, no physical ownership |
| Costs | Higher (setup, admin, storage fees) | Lower (low annual expense ratios) |
| Liquidity | Slower, manual process to sell | Very high, can be sold instantly on stock market |
| Best For | Investors wanting physical ownership in a retirement account. | Investors wanting simple, low-cost exposure to the price of gold. |
How do I choose a reputable Gold IRA company?▾
To choose a reputable company, you should look for high ratings from the Better Business Bureau (BBB) and Consumer Affairs, transparent pricing on all fees and spreads, a focus on client education instead of high-pressure sales tactics, and a clear, written policy for buying back your metals when you're ready to sell.