Gold IRA Rollover Guide: Diversify Your Retirement with Gold

Gold and precious metals investing is enjoying a massive surge in popularity. 

It’s easy to see why: Gold has been a stable, consistent store of value for thousands of years. Nations, kingdoms, and empires have risen and fallen, their currencies debased and rendered worthless,

“Since 1913, the purchasing power of the U.S. dollar has eroded by approximately 96%.”

Meanwhile, the U.S. and most other central banks have spent years undercutting their own currencies by resorting to the printing press, and by holding interest rates - the price of money - at historically low levels.

There’s a price for this profligacy: Inflation. 

But the debasement of the currency didn’t start with the Pandemic. The last century has been marked by a relentless erosion of the purchasing power of the dollar.

Since 1913, the U.S. dollar has eroded by approximately 96%. This means that $1 in 1913 would only be worth about $0.04 today.

For example, in the inflationary 1970s, gold generated strong annual returns of 35% on average, while the dollar was rapidly losing its purchasing power, even as stock markets declined along with it.

Although past performance doesn't guarantee future results, gold's long track record suggests it can help defend your retirement nest egg against inflation. 

In addition to inflation protection, gold is historically an effective portfolio diversifier because its price movements typically have a low correlation with stocks and bonds

Gold as a Safe Haven

When equities markets tumble, gold has often held steady or even appreciated, helping to offset losses, and smooth out the performance of investment portfolios taken as a whole. Geopolitical events and economic uncertainty also tend to drive "safe haven" demand for gold.

In the face of a crisis or recession, owning some actual, physical gold in your retirement portfolio can help act as a ballast––helping to stabilize your portfolio in rough seas. 

Using a self-directed Gold IRA allows you to own a valuable, tangible retirement asset while still enjoying the significant tax advantages that IRAs and similar tax-advantaged savings vehicles provide. 

The purpose of this gold IRA rollover guide is to introduce retirement savers to physical gold, the ins and outs of the Gold IRA, which enables you to combine the tax advantages and wealth protection benefits of the IRA and similar accounts, and to help you with the gold IRA rollover process.

What’s an IRA? 

An individual retirement arrangement (IRA) is a tax-advantaged retirement savings account that allows individuals to save for retirement while deferring taxes on their contributions and earnings. 

There are two main types of IRAs: traditional IRAs and Roth IRAs. Each has advantages and disadvantages, depending on your circumstances. Let’s take a closer look at both.

Traditional IRAs

Traditional IRAs, first authorized  in 1974 with the Employee Retirement Security Act (ERISA),  allow you to deduct your contributions from your taxable income when you file your taxes.

401(k)s, 403(b)s, SEP IRAs, and SIMPLE IRAs also follow this general concept: Contributions are (usually) made pre-tax, and money in these accounts grows tax-deferred.

When you withdraw money (hopefully for retirement!), these withdrawals are taxed as ordinary income. There’s no income cap on IRA contributions. You can contribute the full amount at any income level. But if you make over a certain income, the amount of your contribution you can deduct goes down.

Note: Retirement accounts in this category don’t let you defer taxes forever: Traditional IRAs and similar accounts listed above require you to begin taxable required minimum distributions out of your account, generally starting at age 72.

Roth IRAs

Roth IRAs were introduced in 1997 with the passage of the Taxpayer Relief Act.

Roth IRAs offer a different set of benefits than traditional IRAs: First, Roth IRA contributions are made with after-tax dollars. There is never any tax deduction for Roth IRA contributions.

However, assets in Roth IRAs grow tax free, indefinitely, and withdrawals from Roth IRAs are tax-free in retirement, as long as you’ve left the assets in the account for at least five years.

Roth IRAs can be a good option for people who expect to be in a higher tax bracket in retirement than they are now.

Traditional vs. Roth IRAs At a Glance

Learn More: Gold IRA Tax Rules 

Gold IRAs

A Gold IRA is simply an IRA that holds physical gold on customers’ behalf. It can be a traditional IRA  (including SEP IRAs and SIMPLE IRAs) or a Roth IRA.

There is no difference in how a gold IRA is taxed compared to these other categories of IRAs. The main difference is that a gold IRA has a custodian who is willing to buy, ship, store, and sell physical gold, silver, platinum, or palladium bullion – the actual coins, bars, and rounds – on your behalf.

Not all investment companies do this. Most off-the-shelf IRA accounts sold and managed by investment companies, banks, and broker/dealers do not support the purchase of physical gold, silver, platinum, or palladium bullion products. 

Instead, gold IRAs are primarily marketed and sold by specialized dealers that facilitate in the process of setting up and funding gold IRAs. These gold IRA companies can walk you through the paperwork, assist in the purchase of gold and silver products, and arrange the shipment of metals to an IRS-approved depository (to actually hold the gold). 

Prominent examples of gold IRA companies include: 

• Goldco
• Noble Gold Investments
• Birch Gold Group
• Augusta Precious Metals
• Lear Capital
• and more (see our full list)

Self-Directed IRAs

Gold IRAs are a subset of self-directed IRAs. These are IRAs whose custodians allow IRA owners to take more personal, direct control of the assets in their IRAs.

In addition to gold and precious metals, self-directed IRAs may also hold a wide number of other alternative asset classes, including real estate, individual stocks and bonds, partnerships, limited liability companies, and closely-held C-corporations. 

What is an IRA Rollover? 

An IRA rollover is a transfer of assets from one IRA to another. There are two main types of IRA rollovers: trustee-to-trustee rollovers and direct rollovers.

Trustee-to-Trustee Rollovers

A trustee-to-trustee rollover is when the assets are transferred directly from the trustee of one IRA to the trustee of another IRA. This is the simplest type of IRA rollover and does not involve any tax implications.

Direct Rollovers

A direct rollover is when the IRA owner takes possession of the IRA funds in cash or a check. The IRA owner then has 60 days to deposit the funds into another IRA.

If the IRA owner does not deposit the funds into another IRA within 60 days, the funds will be considered a taxable distribution and may be subject to income taxes and early withdrawal penalties.

Why Do an IRA Rollover? 

There are a few reasons why someone might want to do an IRA rollover:

1.  Consolidate IRAs. This can make it easier to manage your accounts, reduce investment expenses, and track your investments.

2. Changing jobs. You may want to transfer your current 401(k), 403(b), or SIMPLE IRA assets into a new IRA. 

3. Change the investment options in your IRA. If you are not happy with the investment options in your current IRA, you can rollover the funds to an IRA that offers better investment options.
   
   Not all retirement plans allow self-directed investing strategies like gold and precious metals investing. If you want to buy physical gold or other precious metals in a retirement account, you need to find an IRA custodian that will allow it. 

Then you need to transfer your existing retirement assets into your new self-directed gold IRA. That’s going to involve an IRA rollover. 

How to Choose a Gold IRA Company

Here are the key steps to choosing the best gold IRA company for your needs:

1. Research the reputation and reviews of top gold IRA companies

• Look for companies with high ratings from the Better Business Bureau,(A+ is best), Business Consumer Alliance, TrustLink, Trustpilot, and Google Reviews. 
• Read through customer reviews to assess their satisfaction with the company's service, expertise, transparency, and reliability. 
• No company is perfect. Sometimes there are glitches with transactions and deliveries. Normally these are quickly identified and corrected.
  
  But be wary of companies with a pattern of unresolved complaints.

2. Compare account fees and pricing

• Understand all the potential fees, including setup fees, annual maintenance/storage fees, premiums, and transaction fees...
• Look for companies with transparent, competitive pricing. You don’t want “hidden” fees or fees you can’t control.
• Compare premiums between two or three companies. "Premium" refers to the additional cost you're paying over the spot price of gold when you make a purchase. 
  
  Researching and comparing dealer pricing ensures you do not overpay for your precious metals. To avoid confusion or miscommunication, always get pricing details in writing.
• Typically. gold IRA customers pay flat annual fees regardless of account size. Make sure to get all fees in writing so that there are no surprise charges from your custodian or storage provider.
• There are usually fees to handle a transaction. These can be a significant factor if you expect to trade frequently. If you are a confirmed buy-and-hold customer, these may not be a major factor at all. 

3. Look at the inventory

• Choose a company that offers a wide variety of IRS-approved gold, silver, platinum and palladium products.
• Having flexibility in your buying options allows you to better diversify your precious metals portfolio. 
• Buy as much gold as you can for your dollar. Stick to popular common bullion bars and coins that trade at low premiums.  
  
  Unless you're a coin expert and know what you're doing, avoid the sales pitch for 'premium', rare, exclusive, or collectible coins. These often come at high markup and are not necessarily better in the long-run. 

4. Consider the minimum purchase requirements

• Gold IRA companies have different account minimums to get started, ranging from $5,000 up to $50,000.
• Pick a company whose minimum aligns with the amount you're looking to buy.
  
  For example, Augusta Precious Metals has a $50k minimum. This is best for larger accounts, while Birch Gold Group's $10k minimum works better for first time buyers.

5. Look for extensive educational resources

• The best gold IRA companies provide ample educational materials like guides, videos, webinars, and articles to inform your gold and silver buying decisions.
• Augusta Precious Metals excels in this area with their comprehensive online knowledge center and one-on-one educational web conference.

6. Assess ease of use and customer support

• Choose a company with an easy, transparent process for setting up your gold IRA and executing your trades.
• Look for providers with responsive, knowledgeable customer support available through multiple channels, including phone, email, and chat. 

7. Understand storage options and policies

• Your precious metals must be stored at an IRS-approved depository. All the leading Gold IRA companies partner with respected vaults like Delaware Depository and Brinks.
• Evaluate storage options like segregated vs commingled storage and associated fees.

Based on our research, some of the best gold IRA companies that stand out across these key criteria include:

• Augusta Precious Metals. Excellent reputation, extensive education, and superior service. ($50,000 minimum)
• Goldco. Outstanding reviews, robust buyback program, and extensive precious metals selection. ($25,000 minimum) 
• Noble Gold Investments. Low minimums and exceptional customer service. ($20,000 minimum)
• Birch Gold Group. Excellent transparency, low fees, 20+ years in business, and strong ratings. ($10,000 minimum)

Ultimately, the right gold IRA company depends on your unique needs and preferences. By carefully evaluating these factors, you can find a trusted partner to help secure your retirement savings with precious metals.

IRA Rollover Rules

It is important to note that there are some restrictions on IRA rollovers. For example, you cannot roll over an IRA to a non-qualified account, such as a taxable brokerage account. You also cannot do an IRA rollover more than once per year.

If you are considering an IRA rollover, it is important to talk to your IRA custodian or financial advisor to understand the rules and implications of doing a rollover.

Gold IRA Rollovers, Step-By-Step

Many people open Gold IRAs with assets from a workplace 401(k) plan. If you have assets in a 401(k) or similar account you want to use to open and fund a gold IRA, here’s a step-by-step guide to doing the rollover without incurring taxes or penalties. 

1. Choose a reputable gold IRA company

• Research and compare different gold IRA providers based on their reputation, fees, customer service, and selection of IRA-approved precious metals. 
• Look for companies with extensive experience, positive customer reviews, and transparent pricing.
• Some well-regarded options can be found here.

2. Open a self-directed IRA account

• Work with your chosen gold IRA company to set up a new self-directed IRA that allows you to hold physical precious metals.
• Complete the new IRAs’ application form and provide necessary documentation. If you’re doing a direct IRA, your new IRA custodian will have funds transferred from your 401(k) or other retirement account into the new self-directed account.
• Your gold IRA provider will assist you throughout this process to ensure everything is handled correctly.

3. Initiate the rollover process.

• Inform your current 401(k) plan administrator that you wish to roll over funds into your new gold IRA.
• You can choose between a direct rollover (funds transferred directly to the new IRA) or an indirect rollover (funds sent to you first, which you then deposit into the new IRA within 60 days). A direct rollover is generally recommended to avoid potential taxes and penalties.
• Ensure the funds are accurately transferred to your new IRA custodian.

4. Make the Purchase.

• Decide what bullion products you want your IRA to purchase and hold on your behalf. You have to buy bullion products: e.g., specific coins, bars, or rounds manufactured to specific purity levels from either national mints or IRS- approved manufacturers. Non-bullion collectibles and numismatics are not authorized for IRAs. In addition to gold, you can also choose silver, platinum, or palladium bullion. 
• Instruct your gold IRA company to make the purchase on your behalf.  

The gold IRA company isn’t going to choose your assets for you. Remember, these are self-directed IRAs. You are making the buying decisions, not some fund manager somewhere. 

You must be proactive, and provide your IRA custodian specific instructions in writing. Specifically, you have to tell your IRA custodian what to buy, whom to buy it from, and at what purchase price, and when you need the purchase completed by. The custodian will handle the rest. 

• Your precious metals will be stored in a secure, IRS-approved depository facility on your behalf. NEVER take gold IRA assets into your own personal possession. Doing so could cause the IRS to disqualify your entire Gold IRA account, triggering massive tax penalties and fines. 
• Be sure to obtain and safeguard all documentation related to your metals purchases and ownership.

5. Verify and confirm the transaction. 

• It’s always a good idea to double check your statement from your Gold IRA company to ensure the transaction was completed correctly and reported correctly, and that the asset you purchased is now sitting on your shelf in the depository facility. 

Related: Lear Capital Review - Is the Gold Dealer Legit?

What Precious Metals are Approved for Your IRA? 

Most gold and precious metals products are not allowable in Gold IRAs. Here is a list of the basic eligibility criteria, and the most common and popular forms of IRA-eligible precious metals

1. Gold Bars and Rounds

Gold bars and rounds are allowed if they have a minimum fineness of 99.5% and are produced by a NYMEX, COMEX, NYSE/Liffe, LME, LBMA, LPPM, TOCOM, ISO 9000 or national government mint approved refiner, assayer or manufacturer. The bars/rounds must have the producer's hallmark and meet minimum fineness requirements.

2. Gold Coins 

Allowable gold coins include

• American Eagle bullion and proof coins 
• Australian Kangaroo/Nugget bullion coins
• Austrian Philharmonic bullion coins
• British Britannia coins (2013 and newer)  
• Canadian Maple Leaf coins
• Chinese Panda coins
• U.S. Buffalo bullion coins
• Other gold coins meeting minimum fineness of 99.5%

3. Proof coins

• Proof coins must be in original mint packaging in excellent condition with a certificate of authenticity. 
• Non-proof coins must be in brilliant uncirculated condition.

4. Silver, Platinum and Palladium Products

Silver, platinum and palladium bars and coins meeting certain purity standards are also allowed. Silver must be 99.9% pure, platinum and palladium 99.95% pure.

5. Numismatics?

Numismatic (rare or collectible) coins are not allowed for your precious metals IRA. These are non-bullion coins that are remarkable for their beauty, rarity, or value as collectibles.

IRA rules require retirement savers to make buying decisions based on the value of the actual metal itself, not collectibility or aesthetic concerns. 

6. Prohibited transaction rules

Prohibited transactions are improper uses of an IRA by the IRA owner or certain disqualified persons. These rules are designed to ensure tax advantages of IRAs are used for the intended purpose of retirement income security – not the personal benefit of the IRA owner.

• Your IRA cannot buy, sell, lend to, or borrow from any disqualified person. 
• These include the IRA owner, their spouse, ancestors, lineal descendants or ascendants and their spouses, and any entity (corporation, partnership, trust, estate) in which the IRA owner has a 50% or greater interest. It also includes IRA fiduciaries and service providers. 
• If a prohibited transaction occurs, the IRA loses its tax-advantaged status and the entire fair market value is considered distributed and taxable as of January 1 of the year the transaction took place. The IRA owner may also owe a 10% early withdrawal penalty if under age 59½. In essence, this means you can’t use your IRA to transact with family members, and your advisors can’t recommend you buy IRA assets from them, or sell to them. 
• Your IRA should only transact with independent third parties.

7. Possession

The coins or bullion must be held by the IRA trustee or custodian, never by the IRA owner directly. Do not attempt to take personal possession of Gold IRA assets at any time, other than as a result of taking an in-kind distribution. 

Do not try “Gold IRA home storage” schemes, even via an LLC. The courts have frowned on attempts to circumvent rules prohibiting personal, direct possession of Gold IRA assets in this way. 

Getting Started

Buying gold or other precious metals isn’t a magic bullet for your portfolio. Like all assets, precious metals can and do lose money over short periods of time on occasion. 

But exposure to gold, silver, platinum, or palladium bullion can act as a vital diversifier and ballast to help stabilize your portfolio when the economic seas get rough, or when debt-strapped governments are forced to devalue their currency to pay off bondholders. 

Exposure to tangible assets like gold and real estate are especially important for portfolios that are heavy with paper assets, such as bonds, stocks, and cash equivalents. Any given stock or bond can potentially become worthless in very short order. Ask any former Enron stockholder.

The same is not true for gold, silver, or real estate. Novice and intermediate buyers should generally stick to bullion bars, coins, and rounds from government or other established and reputable mints. Leave numismatics and collectibles for professionals. 

Otherwise the professionals will eat your lunch. However, it’s important to work with a reputable gold IRA company.

Not only does this reduce your risk of getting lured into a rare gold IRA scam; these companies will also have the knowledge and core competence to help you handle transactions in a way that is compliant with laws governing IRAs and other tax-advantaged accounts.  

This is important because one slip-up… such as mailing your IRA gold to your home address rather than ensuring your gold is stored with an IRS-authorized depository, can result in significant penalties and other legal ramifications.

Whoever you work with, it’s a good idea to check them out thoroughly with the Better Business Bureau and other trusted consumer review websites.