The Truth About Home Storage Gold IRAs [2024]
There’s a lot of misinformation when it comes to holding precious metals in a retirement plan. So let’s debunk them once and for all. This includes the biggest misconception of all: Can you store your gold IRA at home?
What is a Gold IRA
A Gold IRA is a type of self-directed individual retirement account. It allows you to hold gold and other precious metals. It can be physical metal directly, a claim on physical metal, or even an ETF or other fund that holds the metal.
Is it possible to set up a Home Storage Gold IRA?
Some marketing pitches may say otherwise, but you can’t store gold and other metals in your IRA at home. Doing so will result in a prohibited transaction and result in the distribution of your entire IRA.
While it’s possible to hold precious metals in a retirement plan IRA, strict rules apply.
- Only certain coins bars, and rounds qualify as eligible investments for a Gold IRA. Precious metals must meet criteria such as minimum fineness and production standards. Section 408(m)(3) of the Tax Code lists the forms of precious metals that can be held in an IRA.
- You also need a qualified custodian to hold the gold and store it in an IRS-approved depository. You cannot take possession of it and store it at home or a safe deposit box.
Buying precious metals that aren’t eligible for IRAs or storing them the wrong way can both result in a prohibited transaction.
Prohibited Transactions Can Invalidate a Gold IRA
Strict rules apply when it comes to holding precious metals in a Gold IRA.
It is easy to accidentally trigger a “prohibited transaction.” And that is something you really don’t want. First, it will be considered a distribution of your entire IRA – not just the assets involved in the transaction.
In most cases, that means you’ll have to pay tax on the entire value of the IRA, up to a top federal rate of 40.8%. Plus state tax, if applicable. And if you’re under 59½ years old, the entire distribution would be subject to an extra 10% penalty.
The Role of the Custodian
Without a custodian, it is not possible to open an IRA, including one that involves assets like gold, silver, or platinum.
The custodian plays a crucial role in managing the assets within the IRA. They maintain records, process transactions, ensure compliance with IRS regulations (i.e. what metals are held in the IRA, where they are stored). Another responsibility of the custodian is to file an annual report with the IRS for each IRA it administers.
Finding the Right Custodian
Many custodians prohibit investments in precious metals other than mining shares or ETFs.
But custodians who specialize in self-directed IRAs will generally allow you to hold precious metals in your IRA, so long as you follow the rules.
Just be sure to choose a custodian that permits precious metals investments. Dozens of companies are available to assist in this regard. One that we’ve worked with for many years is GoldStar Trust.
All You Need to Know About Gold IRAs
| Gold IRA | |
| Physical Gold | A Gold IRA can hold physical gold and other precious metals. But strict rules apply. Only certain coins, bars, and rounds qualify to be included in a Gold IRA. |
| Transfer Process | Approval from the custodian is necessary for transferring assets in or out of a Gold IRA. The process of adding or selling gold can vary in speed and complexity. There also may be a fee for every transaction. |
| Storage | The custodian is responsible for storing the gold in an IRS-approved depository. You cannot store it at home. |
| Possession | You do not have physical possession of the gold. |
| Control | You have control over your gold but can act only through your IRA custodian. |
| Access | With a Gold IRA, you cannot physically access your gold as it must be stored in a depository selected by your custodian. |
| Diversification | There are strict rules on the types of gold and other precious metals that can be included in a Gold IRA. |
| Compliance | The custodian is responsible for making sure all IRS rules and regulations are met. |
| Fees | There are higher fees associated with owning a Gold IRA versus owning physical gold stored at home or a vault or safe deposit box of your choice. |
| Estate Planning | A Gold IRA may be inherited but must be transferred to a beneficiary through the IRA custodian. |
| Tax Benefits | A Gold IRA offers tax benefits. These include tax-deferred growth and, in some cases, deductions. With a Roth Gold IRA, the growth in value of the gold is tax-free after certain conditions have been met. |
Gold IRA vs Physical Gold: What’s Better?
Both a Gold IRA and physical gold involve owning physical metals. However, there are notable differences between the two. Each option has specific advantages and limitations.
Here’s what you need to know before you decide: Gold IRA vs Physical Gold.
Since a Home Storage Gold IRA is not legal, how does a Gold IRA actually work?
Setting up a Gold IRA involves these steps.
- Choose a Reputable Custodian: Select a trustworthy company to handle your Gold IRA account and act as your Custodian. Research potential providers thoroughly to ensure reliability and compliance with IRS regulations.
- Open Your Account: Complete new account paperwork. It includes an IRA application, IRS forms, and the terms of service agreement. The custodian will guide you through this process.
- Fund Your Gold IRA: Fund your Gold IRA through options like rolling over or transferring assets from an existing retirement account. You can also make new annual contributions as with a standard IRA. Your custodian and the Gold IRA company rep will help with the needed paperwork.
- Select Your Precious Metals: Choose the types of physical gold, silver, platinum, or palladium you wish to invest in within your Gold IRA. (Please note: Only certain forms of gold are permitted within an IRA.)
- Secure Storage: Gold storage is handled by the custodian. Custodians work with depositories like Delaware Depository, Brinks Global Services, and International Depository Services to ensure the safekeeping of the precious metals held in the Gold IRA.
- Monitor and Maintain Your Account: Once your Gold IRA is established and metals are stored, regularly monitor your investment portfolio. Your Gold IRA company will provide statements on your holdings and their valuations.
If you want to store your gold at home….
… then a Gold IRA may not work for you.
Purchasing physical gold bars and coins and storing them at your home, a safe deposit box or vault may be the better solution for you.
Not sure how to start?
- More information on best gold coins to buy and best gold bars to buy.
- More information on how to store precious metals — at your home, within the US and offshore.
Need some help?
Since 1984, we’ve helped more than 15,000 customers and clients protect their wealth. For its proven record as a wealth preservation, gold has often been a part of that planning.
If you’re interested in using gold for the same purpose, and aren’t quite sure where to start, please book a free, no-obligation call with one of our Associates to see if a wealth protection plan is right for you.
