PRECIOUS METALS IRA FAQ

What is a Precious Metals IRA?

A Precious Metals IRA is a type of IRA—whether Traditional, ROTH, SEP, SIMPLE, Rollover, or Inherited—that holds physical precious metals, including gold, silver, platinum, and palladium. Since the passage of the Taxpayer Relief Act of 1997, which allowed expanded investment options, IRA holders have been able to use their IRA funds to invest in approved precious metals.

What is a Gold IRA?

A Gold IRA is a self-directed IRA (Traditional, ROTH, SEP, SIMPLE, or Inherited) that holds eligible physical gold coins or gold bars as part of its assets.

What is a Silver IRA?

A Silver IRA is a self-directed IRA (Traditional, ROTH, SEP, SIMPLE, or Inherited) that holds allowable forms of physical silver, such as silver coins or silver bars. Many Precious Metals IRAs combine gold and silver investments.

What is a Palladium IRA?

A Palladium IRA is a type of self-directed Precious Metals IRA that invests in approved forms of physical palladium coins or bars.

What is a Platinum IRA?

A Platinum IRA is an IRA that includes some or all of its assets invested in IRA-approved forms of platinum bullion. Platinum IRAs are typically set up through a self-directed IRA custodian.

What types of precious metals can a Precious Metals IRA hold?

A Precious Metals IRA can contain the aforementioned four types of precious metals: gold, silver, platinum, and palladium. Gold in an IRA is limited to certain coins and bars, such as 1 ounce, ½ ounce, ¼ ounce, and 1/10-ounce Gold American Eagles (either Uncirculated or Proof), or other gold products with a minimum purity of 0.995%. Silver must be at least 0.999% pure, while both platinum and palladium must have a purity of at least 0.9995%.

Can I own rhodium in my IRA?

No, rhodium is not an approved precious metal for inclusion in an IRA.

Are there any metals not allowed in a Precious Metals IRA?

Yes, the IRS only allows the following precious metals in a Precious Metals IRA:

• Gold: Gold American Eagles (Proof or Uncirculated) in 1 ounce, ½ ounce, ¼ ounce, and 1/10-ounce sizes, or other gold coins or bars with a minimum purity of 99.5%.
• Silver: Coins or bars with a minimum purity of 99.9%.
• Platinum: Coins or bars with a minimum purity of 99.95%.
• Palladium: Coins or bars with a minimum purity of 99.95%.

Is a Gold IRA the same as a gold certificate?

No, a gold certificate is essentially a paper claim for physical gold, which can be redeemed for actual gold at a later time. In contrast, a Gold IRA holds physical gold or other precious metals directly in the form of coins or bars that you select.

Why do I need to transfer or rollover my IRA to convert it to gold?

Although any IRA can technically purchase gold and precious metals, many large custodians (like Charles Schwab, Merrill Lynch, and JP Morgan Chase) do not offer physical metals as an investment option. These custodians typically focus on paper assets or managed funds. Since physical precious metals require a self-directed IRA, you would need a custodian that specializes in such investments. If your current custodian does not allow precious metals in your IRA, we can help you facilitate a rollover or direct transfer to a custodian who does. This process is not taxable.

Do I need to invest all the money in my Gold IRA at once?

No, you are not required to invest all your funds immediately. Once your Gold IRA is set up, you can transfer or rollover funds from an existing IRA or retirement plan. You can leave the funds in cash until you’re ready to invest. At any time, you can choose to invest a portion or all of your balance, or even keep some of it in cash or invest in other assets.

Do I pay taxes when I transfer into a Gold IRA?

No, transferring funds from an existing IRA or retirement account into a Gold IRA does not trigger any tax liability, as long as the transfer is done correctly.

What fees are associated with a Precious Metals IRA?

Most custodians charge standard fees, including account opening fees, annual maintenance fees (which cover statements and filings), and storage fees. Some custodians may also charge a transaction fee when purchasing metals. These fees can vary significantly between custodians, so it’s important to compare them. Constitutional Gold Group offers an up-to-date chart of estimated fee schedules for different custodians.

Why are the fees for a Precious Metals IRA higher than those for a regular IRA?

Most of the largest IRA custodians, such as JP Morgan, TD Ameritrade, Edward Jones, and Merrill Lynch, primarily offer paper-based financial products like stocks, mutual funds, and CDs. These custodians typically charge minimal or no direct fees because they profit from the products they sell. Additionally, banks can earn money through the fractional reserve banking system, even when you only hold cash in your IRA. In contrast, self-directed IRA custodians do not generate revenue from the assets held in your account. As a result, they charge fees to cover the custodial services they provide, such as account management and issuing IRA statements, as well as the costs of secure storage for precious metals.

How do I pay my annual Precious Metals IRA fees?

You can pay your annual IRA fees by check or credit card. Alternatively, you may choose to pay the fees from any cash balance in your account. Any fees you pay out of pocket are 100% tax-deductible.

Are the setup and maintenance fees for my Gold IRA tax deductible?

Yes, all fees associated with setting up and maintaining your Gold IRA are tax-deductible.

What happens if I miss my annual IRA fee payment?

If you miss your payment, you will incur a late fee. If your payment becomes significantly overdue, your custodian may sell a portion of your precious metals to cover the outstanding fees.

What is the difference between an IRA transfer and an IRA rollover?

An IRA transfer involves directly moving IRA assets from one custodian to another. This is typically initiated by the account holder, who authorizes the receiving custodian to request the transfer of funds or assets from the releasing custodian. The transfer occurs between custodians with no tax impact. A rollover, on the other hand, is a method for transferring funds from one account type to another, such as from a 401(k) to an IRA. Rollovers are commonly used for like-account transfers (e.g., Traditional IRA to Traditional IRA). There is no limit on the number of transfers you can make within a year.
For rollovers, there are two types: direct and indirect. A direct rollover moves funds directly from one custodian to another, while an indirect rollover sends funds to the account holder. In the case of an indirect rollover, the account holder must deposit the funds into a new retirement account within 60 days to avoid taxes and penalties. You are allowed only one indirect rollover per 12-month period.

Are the precious metal account fees paid from my IRA, or do I pay them separately?

When setting up a new IRA or transferring funds into a Precious Metals IRA, you can choose to pay all fees from the IRA assets or directly from your personal funds (via check or credit card). Any fees paid as part of your IRA setup are fully tax-deductible.

Can I use my ROTH IRA to buy gold?

Yes, a ROTH IRA can hold gold and other eligible precious metals, just like other types of IRAs, including Traditional IRAs, SEP IRAs, SIMPLE IRAs, Inherited IRAs, Rollover IRAs, and Spousal IRAs.

I only want to move part of my IRA to precious metals. Can I use only part of my IRA funds?

Yes, you can choose to do a partial IRA rollover to a Gold IRA. You are free to move only a portion of your IRA or retirement account into a Gold IRA. Note that you can have multiple IRAs and divide your assets between different custodians.

My IRA custodian doesn’t offer gold. Do I have other options?

Yes, you can transfer your IRA to a self-directed custodian who offers gold as an investment option. Constitutional Gold Group works with many self-directed IRA custodians that provide gold investments, and we can assist you with initiating a tax-free transfer or rollover to a new custodian. You can make as many direct transfers between custodians as needed without limits.

I have a retirement plan at work. Can I roll it over to a Gold IRA?

Yes, if you have a retirement plan from a previous employer or if you’re retiring or changing jobs, you can roll over the funds from employer-sponsored plans such as a 401(k), 403(b), 457(b), or TSP into a self-directed IRA to purchase precious metals. If you’re still employed with the company offering the plan, check with your plan administrator to see if you’re eligible to roll over a portion of your retirement plan into an IRA. Some employers allow employees to move part of their retirement funds to an IRA while still working.

Can I store my IRA precious metals myself?

No, the IRS requires that precious metals in an IRA be stored by an approved trustee or custodian. The custodian must be a bank, a federally insured credit union, a savings and loan association, or another IRS-approved entity (as per 26 U.S. Code § 408). While some people try to use “checkbook control IRAs,” “LLC IRAs,” or “Home Storage IRAs” to store metals themselves, this structure is not recognized by the IRS. Storing IRA-owned metals at home can expose you to potential IRS penalties. Custodians that offer Checkbook IRA structures typically advise clients to store the metals in a secure bank safety deposit box.

How do Required Minimum Distributions (RMDs) work for a Gold IRA?

IRA holders must begin taking Required Minimum Distributions (RMDs) at age 72 (73 if you turn 72 after December 31, 2022). For a Gold IRA, you can take your RMDs “in kind,” which means you can have the physical precious metals sent directly to you. Alternatively, you can sell the metals and take your RMD in cash.

What if I need to liquidate my Precious Metals IRA?

You can sell the gold or other precious metals in your IRA at any time without incurring taxes or penalties, as long as you don’t withdraw the cash from your IRA. If you take the cash out, you will be subject to taxes, unless it’s a ROTH IRA.

Can I add to my Precious Metals IRA or make more transfers?

Yes, you can always add to your Precious Metals IRA. You can do so by transferring funds from another IRA or retirement plan, or by making annual contributions, subject to the contribution limits of your IRA type and age.

Can I change metals within my Gold IRA?

Yes, you can buy, sell, trade, or swap the precious metals within your Gold IRA at any time, without triggering any tax consequences.

Where are the storage facilities for my Precious Metals IRA?

Custodians use various secure storage facilities for your precious metals. Some custodians offer a choice of facilities, while others may work with specific locations. Constitutional Gold Group maintains an up-to-date list of storage options from various custodians. Some of the most popular storage facilities include:

• Delaware Depository Service Company (DDSC), Wilmington, DE
• Brink’s Global Service, Los Angeles, CA; Springfield Gardens, NY; and Salt Lake City, UT
• International Depository Services (IDS), New Castle, DE; Ontario, Canada; and Toronto, Canada
• First State Depository, Wilmington, DE
• CNT Depository, Bridgewater, MA

Will my Precious Metals IRA be stored safely and are my metals insured?

Yes, the depositories used by reputable self-directed IRA custodians employ advanced security measures, including armed security and surveillance. These facilities are insured with excess insurance policies from prominent global insurers like Travelers and Lloyd’s of London, with some policies covering billions of dollars. By choosing a trustworthy custodian and secure storage, you can have peace of mind regarding the safety of your IRA’s precious metals.

Can I change the storage facilities?

Yes, you can change your storage facility if you’re not satisfied with the current one or if the fees are too high. If your custodian doesn’t offer the storage facility you prefer, you may need to switch to another IRA custodian that provides it.

Can I take delivery of the metals in my IRA to satisfy an RMD?

Yes, you can take direct delivery of the precious metals in your IRA at any time, including to fulfill your Required Minimum Distribution (RMD) obligation.

Do I receive statements for my Precious Metals IRA?

Yes, your custodian will provide you with quarterly statements for your Precious Metals IRA account.

Can I see the precious metals in my Gold IRA?

Yes, depending on the storage facility you choose, you can usually schedule an appointment to view your precious metals in person.

What happens to my Gold IRA if I die?

If you pass away, your IRA and its assets will be transferred to the beneficiary or beneficiaries you’ve designated. You can choose and update your IRA beneficiaries at any time.

Can I leave my Precious Metals IRA to my church or a chosen charity?

Yes, you can designate your church or any other charity as the beneficiary of your IRA and its assets.