Converting an IRA to gold involves opening a self-directed gold IRA, choosing an IRS-approved custodian, transferring funds from your existing IRA, and purchasing IRS-approved physical gold such as coins or bars. Investors often make this move to diversify their retirement portfolio, hedge against inflation, or protect long-term wealth with tangible assets. The IRS requires that gold in an IRA meets strict purity rules and be stored in an approved depository—not at home. The process includes fees for storage, insurance, and custodial administration. Converting an IRA to gold can be a sound strategy when used as part of a diversified retirement plan, but investors should understand the risks, costs, and regulatory requirements before moving forward.
Convert IRA to Gold – Key Takeaways
- Converting an IRA to gold requires a self-directed IRA managed by an IRS-approved custodian.
- Only IRS-approved gold (typically 99.5% purity or higher) can be held in a gold IRA.
- Gold must be stored in an IRS-approved depository; home storage is not allowed.
- A direct custodian-to-custodian transfer is the simplest and safest funding method.
- Investors should expect custodian, storage, insurance, and transaction fees.
- Gold IRAs offer diversification and inflation protection but also come with risks and higher costs.
- Most financial advisors recommend limiting precious metals to a modest percentage of your portfolio.
- This strategy is best for long-term planners who want stability, diversification, and tangible asset exposure.
- Work with reputable custodians and dealers to avoid scams and ensure compliance.
Why Convert an Existing IRA to a Gold IRA Account?
Before getting into the steps to take to start a gold IRA rollover or transfer, it’s important to understand why you might want to consider this. In my experience working with clients who want to invest in gold and other physical precious metals, I have found that they want to invest for one of the following reasons:
They Want to Diversify Their Retirement Savings
When we look at gold investments, traditionally, we find that gold and other physical metals, keep their value when the stock market falls and inflation rises. For people who want their retirement savings to be more stable, diversifying your retirement account is a smart idea.
They Want Protection from Inflation
Since gold and other precious metals are physical assets, they aren’t directly affected by inflation like paper money, stocks, and other paper asset classes are.
They Want to Preserve Their Wealth
For those who are ready to retire, or near to retirement, converting part of their IRA to gold can be a good way to preserve their wealth. This is especially true if they are worried about risk or currency devaluation.
They Want Alternative Asset Exposure
A gold IRA is a form of a self-directed IRA. This means that when you purchase gold or other precious metals, you are exposed to an alternative asset.
Though all of this is true, the decision to put your IRS funds into a gold or silver IRA is not one that you should take lightly. Gold IRAs come with more costs, rules, and complexities than a traditional IRA. This is why I always suggest that you diversify your retirement accounts with precious metals and paper assets.
How to Convert an IRA to Gold or Silver – Precious Metals IRAs – Step-by-Step
You can get a traditional or Roth IRA, or even SEP gold IRAs, when you convert or transfer traditional retirement accounts into a new gold IRA. Here are the basic steps:
Step 1 – Know the Rules for Precious Metals IRAs
To convert an IRA to gold, you need to know the rules. These are tax advantaged retirement accounts, so IRS rules are in play. Here are the basic rules:
- This is a self-directed IRA. In most cases, that means you need to work with a reputable gold IRA company, not a traditional brokerage.
- You can use your IRA funds to purchase gold, silver, platinum, and palladium. This can be in the form of gold bars, bullion, coins, etc, but they must meet IRS rules, i.e. gold must be 99.5% pure. Remember, this is physical gold, not gold stocks.
- You must store your gold (and other metals) in a secure storage facility known as a depository. Storing physical gold that is in an IRA is regulated by the IRS.
- There are additional fees and costs that you will need to pay with a self-directed retirement account including custodian fees, storage fees, and insurance. These vary depending on the custodian and storage facility.
This might sound like a lot, but these rules are in place for a good reason. They help to maintain the tax advantages you get with these accounts, and it ensures proper oversight. If you ignore these rules, and you don’t do things the right way, the IRS could consider the funds taxable income, which means you would have to pay taxes on that money.
Step 2 – Choose an IRA Custodian
This might be the most important step of the process. There are many custodians and gold IRA companies out there, but not all of them are good ones. Some may even border on scammy practices. It’s so important to do your research here. I have used and reviewed many of them, and I always advise people to do the following when doing their own research:
- Make sure that the custodian is using IRS rules.
- Ensure that the custodian has experience in the self-directed IRA industry.
- Understand the fee structure.
- Look for transparency. You should get clear statements, know where your metals are, and get good communication from the company you are working with.
- Know where your metals are stored. Depositories should be extremely secure and insured.
Choosing the wrong custodian can really eat into your returns thanks to hidden fees and poor communication, so please do your research.
Step 3 – Open Your New Retirement Account – Fund A Self-Directed IRA
Once you have selected a gold IRA custodian, the next step is to open up the account. Here’s the basic way to do that:
First, fill out the paperwork. A good custodian will do most of this for you. They will talk to you about your personal finances, your workplace retirement plan or employer sponsored retirement plan, and explain the difference between an indirect rollover and a direct rollover. (Or a transfer, which might also apply in your case depending on the type of retirement account you currently have.)
Step 4 – Purchase IRS-Approved Gold, Silver, Platinum, and Palladium
When you have funded your account, now it’s time to choose your metals. Remember, not all precious metals qualify for a gold IRA. Here’s some guidelines:
- Work with your custodian and a reputable gold IRA company to select the best metals for your goals.
- Verify that the metals meet IRS standards. Some common options include American Eagle coins, Canadian Gold Maple Leafs, gold bars, gold coins, etc.
- Consider storage options. Segregated storage means your gold is stored alone and it’s identified as yours. Non-segregated means it’s stored with other people’s metals in a pool. There are differences in cost between these choices with most custodians.
Step 5 – Ongoing Maintenance, Reporting & Fees
Converting your IRA to gold isn’t a one-time transaction — it also comes with long-term responsibilities.
- Annual Fees: You’ll likely pay a custodian annual fee plus storage and insurance. According to Gold IRA Blueprint, these fees can be around $100–$300 per year or more depending on your holdings.
- Transaction Fees: Whenever you buy or sell metals in your IRA, there may be fees (often 1–5% of transaction value).
- Reporting: Your custodian will provide annual statements. These include the value of your gold holdings and any storage or transaction costs.
- Tax Considerations: Because gold IRAs follow standard IRA rules, you’ll face ordinary income tax on distributions from a traditional gold IRA. Roth gold IRAs avoid that, but have other considerations.
- Required Minimum Distributions (RMDs): If you hold gold in a traditional IRA, you’ll need to take RMDs when required by age. Your custodian may sell some gold to meet this requirement, or make in-kind distributions.
Remember – these costs and rules aren’t negligible. The “premium” for gold IRAs — in fees and complexity — can be significant, and need to be weighed against expected benefits.
Risks & Disadvantages You Must Consider
While gold IRAs have their appeal, there are a number of risks and disadvantages you should be aware of:
- Liquidity Risk – Physical gold isn’t as liquid as stocks or mutual funds. Selling gold held in an IRA can take time, and you’ll need to work through your custodian.
- Price Volatility – Gold prices fluctuate, sometimes sharply. Though it’s a hedge, it’s not immune to downturns.
- High Fees – Storage, insurance, transaction, and custodian fees can add up. For some clients, these costs outweigh the benefit.
- Scams and Fraud – There are unscrupulous firms in the precious metal space. Always use a reputable custodian and dealer. Regulators like the CFTC and FINRA have warned of fraudulent gold-IRA schemes.
- Concentration Risk – Over-allocating to gold reduces portfolio diversification. I often advise clients not to convert more than a modest percentage (for example, 10–15%) of their retirement savings to physical gold. Some financial professionals recommend even more conservative allocations.
- Tax Risk – If IRS rules are not followed — for example, if your gold doesn’t meet purity rules, or if you try to store it at home — you might jeopardize the tax-advantaged status of the IRA.
Gold IRA Transfer – My Final Thoughts
Converting an IRA to gold can be a powerful move — but only if it’s done correctly.
If you’re serious about exploring a gold IRA, I suggest reading some of the reviews I have written about the different custodians out there. Many custodians are reputable, but not all of them are, and the industry, as a whole, doesn’t always have the best reputation. Don’t go into this blindly; choose a good gold IRA company that meets your needs, that you can afford, and that has a good reputation.
Frequently Asked Questions About Converting an IRA to a Gold IRA
Can I convert any type of IRA to a gold IRA?
Most traditional IRAs, Roth IRAs, SEP IRAs, and SIMPLE IRAs can be converted to a gold IRA, as long as the gold is held in a self-directed IRA and follows IRS guidelines. Employer-sponsored plans like 401(k)s may require separation from the employer before funds can be transferred.
What type of gold is allowed in an IRA?
The IRS only allows certain gold products: typically gold that meets 99.5% purity, such as gold bars from approved refiners or coins like American Gold Eagles or Canadian Maple Leafs. Collectible coins, jewelry, and uncertified gold are prohibited.
Can I store the gold at home after converting my IRA?
No. The IRS requires IRA-owned gold to be stored in an approved depository. Keeping gold at home or in a personal safe can disqualify your IRA and trigger taxes and penalties.
How much does it cost to maintain a gold IRA?
Costs vary by custodian but typically include:
- Account setup fees
- Annual custodian fees
- Storage and insurance fees
- Dealer markups and transaction fees
Expect annual expenses to be higher than a traditional IRA invested in mutual funds or ETFs.
What’s the difference between a rollover and a transfer?
A direct transfer moves funds from one custodian to another without you handling the money. This is the recommended method. A rollover gives the account holder the funds temporarily and requires redepositing within 60 days—adding risk and paperwork.
