What is a gold IRA?
A gold IRA is a traditional, Roth, SEP, or SIMPLE IRA held with a custodian that permits physical bullion meeting IRS fineness standards. Contribution limits, deduction rules, and distribution ages are identical to any other IRA of the same type. The only real difference is custody of the metal.
"Gold IRA" is an industry description, not a separate account type in the tax code. Roth conversion mechanics likewise remain those of the underlying IRA.
The practical difference is custody. Instead of a book entry at a brokerage, your account owns specific coins or bars sitting in a vault. That physical reality creates the three costs and three counterparties that define the entire category, and it is the reason the account is administratively heavier than a fund.
Who holds the metal in a gold IRA?
Three separate parties are involved: a regulated custodian that holds title and issues tax reporting, a dealer that sources and prices the metal, and an approved depository that vaults and insures it. When one firm quietly performs all three roles, pricing and accountability suffer.
Every compliant precious-metals IRA involves three distinct roles. Understanding them is the single most useful thing a new investor can learn, because most complaints in this industry trace back to one party quietly wearing all three hats.
Role one
The custodian
Role two
The dealer
Role three
The depository
Dormy is the dealer. We coordinate the other two on your behalf and disclose in writing who they are, what they charge, and what each one is responsible for. See Gold IRA storage explained and allocated versus unallocated holdings for the custody detail behind that arrangement, and how to verify a gold bar is real for what keeps a bar's provenance intact in storage.
Which metals are allowed in a gold IRA?
The Internal Revenue Code permits gold of at least 99.5 percent fineness, silver at 99.9 percent, and platinum and palladium at 99.95 percent, plus specified coins such as the American Gold Eagle. Eligibility is decided product by product, never by a blanket badge.
Eligibility is decided product by product. Broadly, the code requires gold of at least 99.5 percent fineness, silver at 99.9 percent, and platinum and palladium at 99.95 percent, produced by an approved refiner, assayer, or manufacturer, or minted by a national government where a statutory exception applies. The American Gold Eagle is the best-known exception: it is below the general gold threshold and is specifically permitted by statute.
Collectibles are excluded. That exclusion is why graded, slabbed, and heavily marketed proof issues deserve extra scrutiny, not because every proof coin is ineligible, but because eligibility is often used as a selling point while the premium is where the real cost hides.
For the product-level reference, read IRA-eligible metals and proof coins vs. bullion: premiums and resale value.
| Metal | Minimum fineness | Notable exception |
|---|---|---|
| Gold | 99.5% (.995) | American Gold Eagle, permitted by statute at .9167 |
| Silver | 99.9% (.999) | One-ounce silver coins minted by the U.S. Treasury |
| Platinum | 99.95% (.9995) | Specified U.S. and approved sovereign coins |
| Palladium | 99.95% (.9995) | Approved refiner bars and specified coins |
IRS Publication 590-B also names the specific U.S. gold coins an IRA may hold in one-ounce, half-ounce, quarter-ounce, and tenth-ounce sizes, alongside one-ounce Treasury silver coins. Bars and rounds must come from an approved refiner, assayer, or manufacturer, a hallmark alone is not enough.
How do you fund a gold IRA?
A gold IRA is funded three ways: a trustee-to-trustee transfer between IRAs, a direct rollover from an employer plan, or an indirect rollover where funds pass through you and must be redeposited within 60 days. Transfers and direct rollovers are the lower-risk routes.
There are three ways money arrives, and the distinction is tax-relevant.
Transfer
Funds move custodian-to-custodian between IRAs of the same type. Nothing is reported as a distribution, there is no withholding, and there is no annual limit on the number of transfers.
Direct rollover
An eligible employer plan, 401(k), 403(b), 457, or TSP, sends funds directly to the new IRA custodian. Because you never take receipt, mandatory withholding does not apply.
Indirect rollover
The plan pays you and you redeposit into the IRA within 60 days. Withholding usually applies and must be replaced from other funds to avoid a taxable shortfall. This is the route that creates the most avoidable tax problems, and it is rarely necessary.
Full detail lives on the gold IRA rollover page and in transfer versus rollover.
How much does a gold IRA cost?
Expect four cost lines: the dealer premium over spot on each purchase, an account setup fee, an annual custodian fee, and an annual storage and insurance fee charged by the depository. The premium is by far the largest and the most negotiable of the four.
Four cost lines exist. Any presentation that shows fewer than four is incomplete.
- Premium over spot. The dealer's charge above the metal's market price. This is almost always the largest single cost and the one most often left unquoted.
- Custodian setup and annual fee. A one-time account opening charge plus a recurring administration fee.
- Depository storage fee. Charged annually, usually as a flat amount or a small percentage of value, depending on segregated or commingled storage.
- The sell-side spread. What a dealer will bid when you eventually liquidate. A wide buy premium paired with a thin bid is how an account can sit underwater while metal prices rise.
Our typical premium ranges table shows what normal looks like by product type, and how to read a quote walks through an annotated example line by line.
Can you store gold IRA metal at home?
No. The IRS requires IRA metal to be held by a qualified trustee or approved depository. Taking personal possession is generally treated as a distribution of the amount involved, creating ordinary income tax and a possible additional tax if you are under 59½.
Metal owned by an IRA must be held by a qualified trustee or an approved depository. Marketing that promises IRA gold in a home safe, typically through a single-member LLC owned by the IRA, asks you to accept meaningful risk that the IRS treats the arrangement as a distribution of the whole account, with tax, and potentially penalty, in the year it happened.
We take a hard line here because the downside is asymmetric and irreversible. Read the home-storage myth for the reasoning. If holding the metal yourself is the point, the comparison you actually want is a gold IRA versus buying gold outright, which sets custody, limits, tax and liquidity side by side.
How do gold IRA distributions and RMDs work?
Distributions follow standard IRA rules for the account type. Traditional accounts carry required minimum distributions, satisfied either by selling part of the holding for cash or by an in-kind distribution of specific coins or bars valued at the distribution date.
Traditional IRA distribution rules apply unchanged. The wrinkle is that bullion is not infinitely divisible: a required minimum distribution is usually satisfied either by selling a portion of the holdings for cash or by an in-kind distribution of specific coins or bars valued at the distribution date. Planning that liquidity a year ahead avoids forced selling into a soft bid.
See RMDs and metals and inheriting a gold IRA.
How much money do you need to start a gold IRA?
Most established firms set a practical minimum between $10,000 and $25,000, and a few require more. The IRS sets no minimum at all, dealers do. Below roughly $10,000, fixed custodian and storage fees consume an outsized share of the account each year, which is the real constraint.
There is no legal minimum. The constraint is arithmetic. Custody and storage are largely fixed dollar costs, so they weigh far more heavily on a small balance than a large one. If combined custodian and depository fees run roughly $250 a year:
- On a $100,000 account, that is about 0.25 percent a year.
- On a $25,000 account, about 1.0 percent a year.
- On a $5,000 account, about 5.0 percent a year.
The metal is identical in all three cases; only the denominator changes. That is why a sub-scale IRA often makes less sense than a direct purchase with no annual custodial cost. We walk through the full comparison in gold IRA minimums, and what to expect.
How does a gold IRA compare with a gold ETF?
A gold ETF is cheaper, instantly liquid, and held as a book entry through your broker. A gold IRA holds metal you can eventually take delivery of, with no issuer or counterparty between you and the asset, at the cost of premiums, storage fees, and slower liquidation.
Both give you exposure to the gold price. They are not the same asset, and the honest comparison runs in both directions.
| Consideration | Physical metal in an IRA | Gold ETF in a brokerage IRA |
|---|---|---|
| Entry cost | Dealer premium over spot | Small commission or none |
| Ongoing cost | Custodian plus depository fees | Fund expense ratio |
| Counterparty exposure | None to the metal itself once vaulted | Fund sponsor, trustee, and market structure |
| Liquidity | Days, via dealer bid | Seconds, at market |
| Delivery | Possible via in-kind distribution | Generally not available |
If your reason for owning gold is a short-term trade, the ETF is the more efficient instrument and we will say so. Physical metal earns its cost only when the point is ownership without an intermediary, over a long holding period.
Can you withdraw from a gold IRA before age 59½?
Yes, but the same rules as any IRA apply. A withdrawal before age 59½ is generally included in income and can carry an additional 10 percent tax unless an exception applies. You may take the distribution in cash after a sale, or in kind as specific coins or bars.
The account type governs, not the asset. A traditional gold IRA distribution before 59½ is generally taxed as ordinary income and may carry the additional 10 percent tax described in IRS Publication 590-B, subject to the standard exceptions. Roth rules follow Roth ordering and the five-year requirement.
The practical complication is that bullion has to be either sold or physically shipped. An in-kind distribution is valued at the distribution date, and delivery is insured and signature required. Neither happens same-day, so plan liquidity ahead rather than under pressure.
Does the IRS know when you buy gold?
Inside an IRA, yes, your custodian reports contributions, transfers, distributions, and year-end fair market value to the IRS on standard forms. Outside an IRA, private purchases are not routinely reported, though certain cash transactions and specific bullion sales carry dealer reporting obligations.
An IRA is a reported structure by design. Your custodian files Form 5498 for contributions, transfers, and the year-end value of the account, and Form 1099-R for distributions. That reporting is not a downside; it is what makes the tax deferral work.
A personal purchase held outside a retirement account is different. Ordinary dealer sales to you are not reported as such, but dealers have their own obligations on large cash transactions and on certain specified bullion products when they buy from you. Any firm that markets metals primarily as untraceable is selling secrecy, not sound planning, and gains remain taxable regardless.
Where do gold IRA investors lose money?
Most losses come from premium, not from the gold price. Oversized markups on proof or semi-numismatic coins, undisclosed spreads, pressure to move an entire retirement account at once, and vague buyback terms account for the large majority of investor complaints in this category.
- Buying heavily promoted proof or exclusive-mintage coins at premiums that require a large move in metal prices simply to break even.
- Accepting a quote in dollars without ever confirming ounces received.
- Choosing a firm on advertising volume rather than on written disclosure of premium, fees, and buyback terms.
- Using an indirect rollover when a direct transfer was available.
- Ignoring the sell side entirely until the moment liquidity is needed.
The most efficient defence is a short list of questions asked before any paperwork. We publish ours: ten questions that end bad sales calls.
Is a gold IRA right for you?
A gold IRA fits investors who want a physical allocation inside an existing tax-advantaged wrapper, plan to hold for years, and accept ongoing custodian and storage costs. It fits poorly for short holding periods, small balances, or money needed for near-term liquidity.
Physical metal has no yield, carries storage cost, and can trade below its purchase price for extended periods. It is held for diversification and for holding an asset without counterparty credit risk, not for income and not for certainty. Anyone telling you it cannot lose value is not describing the asset accurately.
If you are still deciding whether to own metal at all, start with should you own gold rather than with account mechanics. For a balanced look at the account itself, see gold IRA pros and cons. Self-employed savers have additional account options, covered in gold IRAs for the self-employed.
Where can you verify these rules yourself?
Verify every rule at the source rather than on a dealer's website. IRS Publication 590-A covers contributions and rollovers, Publication 590-B covers distributions and required minimums, Internal Revenue Code section 408(m) defines eligible metals, and FINRA publishes investor guidance on physical precious-metals sales practices.
We would rather you check us than trust us. These are the primary sources behind every number on this page:
- IRS Publication 590-A , contributions to individual retirement arrangements, including transfer and rollover mechanics and the 60-day rule.
- IRS Publication 590-B , distributions, the additional tax before age 59½, required minimum distributions, and the statutory coin exceptions.
- FINRA investor insight on buying physical gold , the regulator's own summary of the sales practices that generate complaints in this category.
Contribution limits and the required-minimum-distribution age change with legislation and inflation adjustments. Confirm the current-year figures with the IRS or your tax professional before you act on them, including anything you read here.