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How To Put Physical Gold Into An IRA

Business Education

If you are thinking about getting physical gold or silver into your IRA, chances are that you have already gone over the basics of a self directed or gold IRA. Keeping this in mind, let us jump straight to the point.

As the fears of an economic recession increase, more and more people naturally want to protect their savings from being wiped out in a manner similar to what happened in the 2008 financial crisis and for this reason, the awareness about the stability of precious metals has increased and people are not waking up to the utility of precious metals in protecting their savings in times of economic uncertainty.

So the question that most people wonder about is how can gold be deposited into an IRA? First of all it has to be absolutely clear that a lot of IRA managing companies do not allow physical gold to be deposited into the IRA, in fact even the government does not allow it, for various reasons. So if you have a traditional 401(K) IRA account then you cannot deposit physical gold, at most you can perhaps invest in gold ETFs, but we are talking about physical and tangible gold here.

Set Up Your Gold IRA

The first thing that needs to be done is that you need to open a self directed or Gold IRA, for this you will need to choose an IRA company that best suits your need. Remember to carry out complete due diligence before choosing the company because it is a matter of your retirement savings, you do not want to entrust your life savings to a company that does not have a good reputation. Do not fall for low cost offerings or something that feels too good to be true. Once you have chosen the company for your Ira, you need to contact them and usually within 48 hours, the company will contact you and run you through the details and necessary paper work. It does not take long to open up a gold or self directed account.

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Roll Over The Funds

The next step is going to be the “roll over” of your funds from your existing IRA into the gold IRA. As long as you have got your funds in the traditional IRA, those funds cannot be used to purchase gold. Make sure to ask your fund managers to see if your funds will be subject to any taxation or penalty or not. You do not want to carry out the roll over in a wrong manner, this is why it is important to choose a good company for IRA as they have specialized professionals who handle the roll over process flawlessly.

The roll over process requires some paper work that should be handled by your IRA company. Usually there is a vetting process similar to what banks have; once again this will be handled by your IRA company. Once the process is complete your funds will be transferred from the 401(K) to the Gold IRA account and the next step involves looking for a custodian to manage the gold on your behalf.

Get A Custodian Or Trustee For Your Gold

Some Gold IRA companies also provide custodial services but if your company does not provide custodial services then you need to look for a reliable custodian for your gold and silver. Under federal law custodial services can be offered by banks, credit unions, trust union or brokerage firms that have been approved to provide asset custody services. You can contact banks and credit agencies to find out their custodial policy and relevant charges. Usually the custodial companies charge storage and administration expenses. This also means that you will not have physical possession of your gold and silver because the custodial services store the precious metals in special vaults and depositories that are not normally in every major city. However, upon the request of clients arrangements can be made to examine the precious metals.

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Purchase The Gold

Once you have set up the custodian, now you can shop for precious metals. You cannot deposit just any precious metal into the account it has to be regulated and in accordance with the terms and conditions set up by the government which means that jewelry and other precious metal artifacts cannot be deposited into the account, only regulated precious metals can be deposited.

It must be remembered that any withdrawal from the IRA or gold IRA account is considered as a distribution by the government and thus the amount withdrawn is taxable, however if you have set up a gold IRA account and you purchase regulated gold then it counts as investment and thus the purchase of gold is not taxable. The accepted forms of gold are:

  • Gold coin minted and issued by the secretary of the treasury
  • Gold coin issued under laws of any state
  • Gold bullion exceeding certain purity standards (usually 99.5% pure)

Once you have chosen the precious metals, you will be required to inform your IRA company with the relevant details and then your IRA company will then make the purchase on your behalf. This process should not take more than 48 hours. Once the IRA company gets through with the transaction, your gold will be delivered to your custodian, delivery times depend on the vendor or dealer you purchase your gold from. A reputable dealer will not take more than 48 – 72 hours to deliver the gold.

In this manner, you can transfer physical gold into your gold IRA and reap the benefits of stability and capital appreciation and rest assured that your investment and savings are safe from the risk of loss.

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