The regulations and gold IRA rules regarding set-up are really not that complicated but they need to be completed in accordance with the IRS. The reason why people think investing in physical bullion is an involved process is due to the IRS, which is why it is imperative you work with a company that has a great track record in handling these type of accounts (recommended company is below)
Most are accustomed to dealing with assets such as stocks, bonds, CD’s, ETF’s and mutual funds; not precious metals. However, as you’ll see the process is fairly straight forward and any experienced gold IRA company/custodian should be able to help you walk through the steps easily with no issues. We’ll be helping you with exactly that below. So what are the gold IRA rules you need to keep in the back of your mind…
Gold IRA Rules
You need to be aware of these basic rules of a gold IRA, which are pretty straightforward and necessary for the best security and least risk:
- No numismatic coins are allowed
- IRS approved bullion only (see image below)
- You can open a self-directed gold IRA account directly with a new custodian
- You can rollover or transfer funds from a previous retirement account (including 401(k), SEP, 403b, TSP) into a new self-directed gold IRA account.
- A gold IRA transfer is something you can do at any time if you have an existing account, however assets must go from custodian to custodian.
- A gold IRA rollover is when you receive your distribution from your current custodian directly, then deposit the funds into another custodian account within 60 days. If not you’ll be liable for taxes and penalties on the amount withdrawn.
- To keep your tax deferred status on this new gold IRA account, you can only rollover funds once a year.
Now, while this may be a simple process there should be some items you should be made aware of beforehand and are worth repeating. First, only bullion bars or coins can be bought for any IRA backed fund. Numismatic coins are of a dubious value and are not recognized by the IRS to be a stable enough investment to qualify. Any custodian that tells you otherwise should be avoided at all costs, and yes we hear stories of companies steering investors towards these collectibles. It does happen from time to time, so be aware.
The second item to realize is that the bullion bars/coins you are purchasing today are not going to be made available to you until you retire. You simply cannot hold these coins at any one time, because if you should gain possession of these coins before they are placed in an IRS approved vault, then it is possible that they would not qualify to be placed into your IRA.
Home Storage Gold IRA Rules
If you’ve been hearing advertisements about storing your physical gold from an IRA at home, be wary. This is not advisable and could actually be illegal. The IRS has issued a stern warning against this practice because the law states that one must store precious metals with a self-directed IRA third-party custodian. Don’t believe the hype about starting a LLC company and having the LLC name yourself as the trustee. There is a long drawn-out process that also requires that your application be approved by the IRS. Because the IRS has long caught on to this, the chances of approval are slim to none. You could even face fines/penalties and extra taxes. Besides, creating an LLC is definitely not suitable for regular retirees.
In any case, here are some of the home storage precious metals IRA requirements:
- You must have or create a limited liability company, in your name, and with a specially written operating agreement.
- After incorporation and audits, you must have a minimum net worth of at least $250,000.
- All employees and trustees of the company must put up a $250,000 fidelity bond as corporate insurance.
- Ownership of the trustee corporation must be divided between several people.
- Applicant must have verifiable fiduciary experience with a “reputable financial background” and prove to have had experience handling retirement funds.
- The trustee corporation for your IRA must have a business location that is open to the public.
- Applicant must have corporate legal counsel on retainer and provide a detailed audit by a qualified public accountant annually.
* The bottom line is, since the IRS has never approved home storage gold IRAs, do it the right way. Have your Gold IRA administered by a custodian, also called a trustee (our top recommended trustee is below). So remember this when approaching precious metals companies… ‘IRA gold must be physically maintained in a depository by the custodian or trustee, not by the IRA owner.’
Other self directed gold IRA rules you need to be aware of and should incorporate:
- Fully-insured and segregated precious metal storage (w/ a registered custodian)
- Hold metals on the books of a company or title only you control
- Avoid metals that can be hypothecated by the trustee, meaning lent out to cover anyone’s debts but your own.
- Assuring direct ownership, ensuring accounts are titled in your name or in the name of an entity you control
- Make sure promissory notes and certificates are third-party insured
- Avoid accounts that require the trustee to purchase metals at market price when requesting delivery
Setting up your Gold IRA
To setup Gold backed IRA you first need to get in touch with someone who has the experience and know how to help you establish such a fund. We are currently recommending our highest rated dealer/custodian for this. To see why, take a look at the full company review of Regal Assets here.
Once you have an IRA set up, then you can start to either transfer your existing assets into that fund or just buy gold (or other precious metals) outright to be placed into your individual retirement account. If you are buying gold to be placed directly into your Gold backed IRA, you must still obey by the limits set by the IRS of the amounts you can invest into any IRA.
If you’ve reached your limit for this year, you can still transfer your assets over to your Gold backed IRA fund. Your custodian will take care of the details for you, so really there is not much you have to worry about.
Basically, what will happen is that in the transfer process your paper assets, such as your mutual funds, stocks, or other equities will be sold. The money from the sale of these assets will then be used to purchase bullion gold, silver, or other approved coins and bars to be placed into your IRA fund.
If you need more detailed information regarding tax implications or IRA regulations the helpful experts at Regal Assets are very knowledgeable. They are not pushy sales people. We have found they take great pride in providing answers to all of your questions, explaining the entire process in great detail, and there is absolutely no obligation to purchase anything. If you’d like, give them a try at the number below.
Why you should let experienced people handle the details…
Letting your custodian handle the details alleviates a lot of worry on your part and also allows the experience and knowledge of the custodian to make the wisest choices for your retirement.
For instance, did you know that the spot price on Gold bars and Gold coins is ever so slightly different and the markup for gold coins is higher than gold bars? Allowing your custodian to take care of buying the maximum value for your money will protect your assets long term.
Transfer or Rollover to Gold
The question to rollover your IRA from a 401(k) or transfer from a current IRA is something to consider. To be honest there are many benefits to just transferring over funds from one IRA to another and there is no limitations on that. A rollover on the other hand gets this done in one step with no worries what so ever, and you can continue to add to your IRA fund each year with the standard contribution limits.
Some people have particular differences in how their estate is set up and therefore have different requirements in regards to moving over funds. To be sure you get the right advice, seeking out a proper and impartial financial advisor would be wise.
We recommend getting started ordering the free investment kit offered by Regal Assets. It has hard copy books DVDs, and other materials to help you fully understand the details of the process.
Click the image below and fill out the simple form. There is no obligation to purchase anything.
So, in closing, while some may argue that understanding self-directed gold IRA rules for investing is not the easiest thing, it does not need to be difficult as you can see. The argument for all the positive aspects is quite compelling. Any gains you make using fiat based equities would be null and void should the currency of your nation collapse or the stock markets suffer a sustained crash.
Knowing the gold IRA rules and choosing to go with a gold backed IRA for your retirement can secure your family’s future for many years to come. We hope this has been helpful in getting you pointed in the right direction.