Interested in learning how to transfer IRA to gold? This post will take you through all you need to know even as a beginner who has no idea about what investing in gold entails. All you need to do is read on till the end of this article and you will be good to go. Let’s dive into it right away:
Thinking about your retirement years will most likely lead to you figuring out the best ways to invest, in a bid to ensure that you are free from financial stress and struggles when that time comes. If anything, the retirement years are meant to be spent enjoying the fruits of all the hard labor that went into earning the money and building wealth.
By now, you probably know about different types of IRAs, and what they are used for investing in. Different accounts have different rules, and as you will learn when you are getting started with investing in gold, you cannot use your regular IRA to invest in this shiny metal.
This means that if you have some funds in your existing individual retirement account (IRA), you cannot use them to directly invest in physical gold. If you are in such a situation, there are only two ways in which you can gain exposure to gold, including:
- Transferring your IRA funds to gold investments
- Purchasing gold paper assets e.g. gold mining stocks, gold futures, gold ETFs, and mutual funds that have gold stocks in them.
This article will only focus only on how you can transfer your IRA to gold, so read on to find out more about it.
What is a Gold IRA transfer?
A gold IRA transfer refers to the process of moving funds from one type of individual retirement account to a special IRA referred to as a gold IRA, simply by having the custodians of the two accounts liaise with each other about the movement of the money. Simply put, the movement of the money happens between the two custodians, without you coming into contact with the money at any phase of the process.
This is different from a gold IRA rollover, in that with a gold IRA rollover, you have to request the custodian of your existing IRA to send or remit to you the funds in your account so that you can deposit them into the gold IRA that you will create.
N.B: A gold IRA is a type of self-directed individual account that allows you as the account holder to invest in precious metals ( gold, silver, platinum, palladium), and other alternative assets that are otherwise prohibited for use for investment in regular IRAs.
How to transfer your IRA to Gold: The Steps You Should Follow
1. Open a new gold IRA
The first step in the process is in opening a new gold IRA. In this step, you are required to search for the most reliable gold IRA custodian (or gold IRA company). Most gold IRA custodians have a well-defined and simple application process that involves filling out some online forms by providing some details about yourself.
If at any point, you feel that you do not have what it takes to complete the account opening process, then you should check if a phone number is provided on the custodian’s official website, so that you can contact them and request help.
2. Initiate a gold IRA transfer
A typical gold IRA transfer involves supplying the custodian of your existing IRA (Traditional IRA, Gold IRA, or SEP-IRA) with the information pertaining to your new gold IRA. After supplying the existing IRA’s custodian with basic information about your account and the amount you want to be transferred, they will proceed to contact your gold IRA custodian, for them to complete the transfer.
The good thing about such a transfer is that you will not be taxed or penalized since the IRA custodians will play their part to ensure that the process is completed within 60 days.
3. Search for a precious metal dealer
Now that your gold IRA is funded, you can start thinking about how to source the gold that you will add to your account. It is necessary for you to exercise caution at this phase of the process since you can either end up with fake gold or end up losing your money to scammers. Your gold IRA custodian may provide you with a list of precious metal dealers for you to pick the one you find most reliable to you.
Take your time to evaluate each precious metal dealer you short-list for consideration and visit as many consumer trust sites (Better Business Bureau, Business Consumer Alliance, Yelp, Trustpilot, Facebook reviews, etc) to see what other customers are saying about the nature of services offered.
4. Storage of the precious metals
When it comes to investing in gold through an IRA, the IRS does not allow you to store the gold at your home safe or a local depository. All the gold must be stored in an IRS-approved third-party depository that has been established to not only be safe enough but that is also insured by a well-known insurance firm such as Lloyds of London.
Your gold IRA custodian may let you choose your preferred IRS-approved depository, but others may only offer a limited list of the depositories you can choose from. Either way, you should do your research to find out whether the depository you choose has an exemplary track record of performance.
5. Buying the gold and holding it
After choosing your preferred third-party depository, you can proceed to buy the gold. This is a simple step, but you will need to establish which type of gold you are purchasing, and why you are purchasing it. You can start by educating yourself about investing in gold through an IRA, and use the educational resources offered by your gold IRA custodian on their official website. Most gold IRA custodians are willing to educate you through:
- One-on-one consultation calls (these may be free)
- Gold IRA kits (delivered to your home for free)
- A detailed Frequently Asked Questions section
- Blog posts
Frequently Asked Questions on “Transfer IRA to Gold”
1. How long does it take to transfer your IRA funds to gold?
The duration of the gold IRA transfer process varies from one gold IRA custodian to the next one. If you work with a reliable company, you will be better placed to have everything set up and ready to roll within a few days. Other companies may take up to a month, depending on how their processes are structured. If you come across that takes longer than a month, then you should probably cross it off your list right away.
2. Is there a limit to the quantity of gold I can hold in a gold IRA?
No. You can hold as much gold as you want to, provided that it is all IRA-approved gold. Note that there are annual contribution limits for gold IRAs, so the quantity of gold you can hold in your account is most likely limited to the total amount of funds you transfer from your other IRA, plus the total gold IRA contributions you make from the time you open your account to the time you start taking distributions.
3. Who is eligible for a gold IRA transfer?
In most cases, if you already have an existing IRA (Traditional IRA, SEP IRA, and Roth IRA), you can easily open a gold IRA and begin gaining exposure to the price movements of this metal. You should, however, consult with the gold IRA experts in your preferred gold IRA custodian company on your eligibility. You can do this by contacting them and requesting to know whether your existing IRA qualifies for a gold IRA transfer.
4. Is a gold IRA transfer necessary for me?
Depends. Investing in gold has its upsides and downsides, just as is the case with other precious metals. You can choose to tap into the main benefits of gold, such as protection from inflation, diversification, and growth, by allocating a portion of your retirement funds to your gold IRA. You will come across many opinion posts about investing in gold, but my advice would be that you take the time to do sufficient research and that you do not let anyone rush you into making a decision about doing a gold IRA transfer.
That will be all for today’s post on how to transfer IRA to gold. I hope you found this post informative, and if you did, let me know by leaving a comment in the section below. You can also share it with anyone in your circles who you know would benefit from such information.
I wish you the best,
Eric, Investor and Team Member at Gold Retired!