Traditional gold IRAs are subject to a 10% penalty for payouts made before the age of 59. A gold IRA rollover involves withdrawing funds from another defined contribution account, such as an IRA, 401 (k), 403 (b), or savings plan. You can transfer all or part of the balance to fund a Gold IRA with no tax liability, as long as you complete the rollover within 60 days. To avoid the possibility of having to pay taxes and penalties, your Gold IRA company can process the transfer on your behalf
Before you start transferring, it’s important to calculate how much of the value of your existing retirement plan you’d like to invest in your new Gold IRA. For many, that means opening a Roth IRA, a type of account that allows tax-free withdrawals once you reach retirement age. A key selling point that gold IRA companies like to tout in their marketing is that if you own a gold IRA, you’re holding the physical precious metals. Gold and other precious metals are just one of the many things you can buy with a Roth Gold IRA
These investments are available in a normal brokerage IRA, meaning you wouldn’t have to go through the work and additional costs of setting up a self-directed gold IRA. Before opening a gold IRA, remember that it’s not the only way to invest in gold with your retirement savings. They also make it easier to open your Gold IRA account, but they don’t provide investment advice, and you shouldn’t use the marketing material they publish as a guide in this regard. If this isn’t a priority for you, there are other ways to add precious metals to your portfolio besides a gold IRA
Making a mistake, even if it’s accidental, can be very costly. So it’s worth knowing what the IRS does and doesn’t do with your Gold IRA. A gold IRA firm will help you set up your account and sell you the gold (or silver) coins or bars that fund the account. However, the IRS has introduced additional tax reporting and record keeping requirements for gold IRAs due to the more complicated assets they hold. In addition to the after-tax rule, Roth’s Gold IRAs include a few other guidelines that you must also follow
Make sure you check the list of allowed gold objects with your custodian bank before you transfer gold to your IRA. Orion Metal Exchange is a California-based company that offers gold IRAs and a wide variety of precious metals, coins, and gold bars. The IRS does not allow popular gold coins such as the South African Krugerrand or British state coins to be stored in
a gold IRA.