Gold Ira Rules
While the rules for having gold and silver in your ira are simple, they are quite restrictive since the U.S. government regulates this area rather heavily due to the high fraud and scam potential of this particular niche in the financial industry.
As long as you have or are eligible to create a 401k or IRA plan, you can use it to buy as much precious metals as you want or are willing to afford. At the time of this writing, 401k plans cannot directly purchase physical metals like an IRA can, but instead can purchase etf’s and paper gold stocks if it’s a self-directed 401k type plan.
The normal rules for withdrawals applies to both retirement account types. They are:
- Withdrawals of cash, or coins and bars in this case, can only be done without penalty at age 59.5. This includes taking physical possession of the actual physical metals.
- Wanting or taking possession of said metals must be approved through your gold IRA/401k custodian, which will take a few weeks to clear with the government.
- Withdrawals before 59.5 years are prohibited unless you’re willing to take a severe tax penalty (at least 10%).
- All metals must be deposited at a verified government depository, such as the one in Delaware.
- To maximize your tax deferments, it’s best to try to keep your metals in your retirement account until at least 70 and a half years of age.
- IRA accounts are currently the only allowable retirement vehicle to buy and store metals.
- Only specific, government made only coins and bars are allowed to be used, such as the American gold eagle coin
- Gold, silver, platinum, and palladium are all allowable to be purchased in your individual retirement account.
- All these bullion coins must be 99% pure metal or greater to be eligible for tax deferment advantages.
- You will still need to pay the normal tax withdrawal fees when you “cash out” your metals, which in this case means the market rates per ounce of metals upon taking physical possession of them.
If you have a 401k plan but want to buy metals, your choices are even more limited as follows:
- 401k’s can only buy paper gold such as ETF’s or gold mutual funds.
- The 401k must be self-directed.
- You can only do gold 401k rollovers after you get a new job, and this assumes your new employer is willing to match you.
In other words, you need to have or create an IRA to make your retirement backed by gold and silver. There isn’t much you can do to get around this fact, sadly.
Some might ask “Why not just buy the valuable metals outright and take possession now with my post-tax money?” Well, this is a very good question and it usually just has to do with:
- Safely storing the metals without getting robbed
- Avoiding paying higher spot prices on metals since you’re buying the real thing directly
Many gold brokers are aware of the desire to hold physical metals in one’s hands, and they generally take advantage of you by simply charging you higher fees, knowing that you will likely pay it. While this isn’t illegal and understandable, I still think it’s a bad way to do business since there’s so much of this stuff to go around.
These are the rules for having a gold IRA. As time and popularity of this grows, expect the rules to become a lot more relaxed. Since you’ve read this far, you’re likely way ahead of the pack and I’d like to congratulate you for that, regardless of your decision to get into metals or not.