What if I already have a self-directed IRA?

Great. So long as it is with one of our supported custodians you can jump right into buying metals. Simply shop for gold and silver (only some products are IRA eligible because of IRS rules, so note that on each product's details as you browse our selection) and select the IRA option at checkout.

What is a self-directed IRA? How is it different from the one I have with my brokerage account?

There's not much difference except your freedom of choice in investment. Self-directed is a marketing term used by custodians who support investing in lots of different asset classes like physical real estate to precious metals to business loans and lots more inside the same Individual Retirement Account (IRA). Your brokerage IRA uses the same rules and regulations, but is simply limited to the investments available on their platform, usually just public stocks and bonds. This is often referred to as a "walled garden" where the selection is limited by the supplier (think of the old America Online versus the modern worldwide web). There is nothing inherently wrong with a brokerage IRA so long as you know its limitations. But with a self-directed IRA your choices are much much wider.

Funds can typically be freely transferred between IRAs with no tax consequences by simply filling out a form with your custodian, allowing to make use of both types of IRAs at the same time.

Can I use my 401(k) instead?

Yes and no. Most 401(k) accounts, like a typical brokerage IRA, are walled gardens as well. Some offer just a handful of investments selected by your company, others anything at the holding brokerage. Either way, in order to allow investment in alternatives like real estate and precious metals, you can "rollover" some or all of your 401(k) balance into a self-directed IRA to use those same pre-tax funds to make your investments.

If the 401(k) account is from a former employer, there are usually no limits on your ability to make a rollover.

If you are still employed, you'll have to consult your 401(k) provider or employer about whether they allow for an "in service rollover".

Americans are allowed to own a self-directed IRA in addition to their traditional IRA where they can invest in alternative assets, such as precious metals. A gold IRA operates in a similar manner as a traditional retirement account, but it must include a percentage of IRS-approved bars or coins that are stored in a depository.

There are two main ways to fund a self-directed IRA.

1. A rollover (or transfer) of some or all of your existing traditional IRA, 401K, 403B or TSP account (for members of the military and government employees). Your IRA consultant will arrange for the transfer with your assigned IRA custodian.

2. Allowed annual contributions can be made into your gold IRA account up to the approved IRS limits. For 2022, total annual contributions to a self-directed IRA cannot be more than $6,000 of income, or $7,000 if you’re age 50 or older.

Choosing which type of precious metals account is a question to discuss with your IRA consultant. It can depend on the status of your existing IRAs, your contribution plan, your age,
your employment or income status, and your desired goal.

A traditional gold IRA is tax-deferred until you make a withdrawal or take an age-required distribution. A Roth gold IRA is funded with pre-taxed money and is not taxed on withdrawal. Any capital gains or growth is also not taxed.

On average, the cost of a self-directed retirement account is less than most retirement plans. The annual costs typically range between $160 - $250. For example, with a $50,000
investment, the yearly cost is only half of one percent or less.

The same tax rules apply for gold IRAs as for traditional IRAs, and Roth IRA rules are the same as for Roth gold IRAs.

First, by following the IRS tax guidelines for IRA rollovers, you may transfer any amount of your current IRAs into a gold IRA with no tax penalty.

When you invest un-taxed money into a traditional gold IRA, taxes will be calculated at the time of each distribution. When you invest already-taxed money into a Roth gold IRA, your distributions and any capital gain on the investment are not taxed.

The same contribution limits and distribution rules for conventional IRAs apply to gold IRAs, except the last one:

The annual contribution limit for funding is $6,000 till age 50, and $7,000 over-50

At age 72, the required minimum distributions (RMD) must begin

Early withdrawals (under age 59 ½) incurs a 10% penalty and additional taxes

You may receive your distributions in cash or physical bars and coins

The storage of precious metals held within an IRA is done at IRS-approved depositories. They handle all the reporting to the IRS on your behalf. Depending on which gold IRA company you work with, they may already have one or more gold depositories they work with, or you may need to locate one.