Choosing your Gold IRA company is the first step to opening your IRA. If you decide to invest in a precious metals IRA, you should do so conservatively. Depending on your financial situation, most experts recommend investing no more than 5 to 10% of your retirement savings in precious metals. Acceptable products that meet these criteria include Canadian Maple Leaf coins, Australian Koala investment coins, and PAMP Suisse bars.
The IRS also allows American Eagle coins even though they don’t meet the 99.5% purity standard for gold. You can’t currently hold rare or collectible coins, Swiss francs, British government bonds, and German marks in a self-governing IRA. There are minimum requirements for the fineness or purity of metals, as well as regulations that govern the size, type, and weight of your IRA gold. Many people who want to avoid this risk instead have their Gold IRA company carry it out as a transfer from institution to institution instead of taking it on themselves.
A self-managed IRA offers the same tax benefits as a traditional IRA, but allows you to hold precious metals and other alternative assets in accordance with IRS regulations. You can set up the SDIRA either as a traditional IRA (tax-deductible contributions) or as a Roth IRA (tax-free distributions). Most gold IRA companies recommend or require that you work with a specific custodian and custodian, although some give you a choice of two or more. A gold IRA rollover involves withdrawing money from another defined contribution account, such as an IRA, 401 (k), 403 (b), or a savings plan.
A good Gold IRA representative will help you figure out how much you should think about investing and which metals will serve you best. They also perform the necessary administrative functions to ensure that your Gold IRA complies with all IRS regulations. Unless you have multiple retirement accounts, it would be very risky to convert your entire balance into a gold IRA. If you need advice, you should contact a trusted advisor instead of relying on representatives from the Gold IRA company.
Before you initiate the transfer, it’s important to calculate how much of your existing retirement savings you’d like to invest in your new Gold IRA. To comply with the many regulations surrounding gold IRAs, you can’t store your gold at home or in a safe deposit box. With a traditional IRA or other retirement account, you can invest in gold through the stock market by buying stocks in mining companies or mutual funds that hold those stocks. Many people who open gold IRAs use funds from another IRA to do so, but it’s not a good idea to convert your entire nest egg into a gold IRA.
Many of the leading gold IRA companies have similar fee structures, but they can vary by a few hundred dollars per year. If you want to hold gold outside of a retirement account (which means you can keep it at home), here’s more information on how to buy gold outside of an IRA.