How to Open a Gold IRA: The Complete Step-by-Step Setup Guide

If you are looking for ways to diversify your portfolio, hedge against inflation, and protect your wealth in case of economic uncertainty, you may have come across Gold IRAs.

A gold IRA (individual retirement account) is very much like a traditional IRA- in that it provides tax-advantaged long-term savings to be used as part of retirement planning. The difference? You can use the account to invest in physical gold and other precious metals.

Since the stock market crash in 2008, people have been more wary of what could happen to their money tied up in stocks and bonds. As such, they have turned more towards safe haven asset classes- of which gold is the king.

Investing in a gold IRA is an excellent way to secure your financial future- protecting against inflation, volatility, and economic disaster. Below, we have provided a detailed step-by-step guide to setting up a gold and precious metals IRA- including everything you need to consider during the process.

A Quick Introduction to How to Open a Gold IRA Account

Before we begin, there are a few types of gold savings accounts- including a Roth gold IRA, gold mutual funds, and SEP gold iRAs. In this guide, we focus on the traditional gold IRA.

There are a few things to note before starting a gold IRA.

  • This is a self-directed IRA- meaning you alone decide how and when the funds are used.
  • You must have an appointed and IRA-approved account custodian to facilitate transactions.
  • There is no such thing as a home-storage gold IRA- you should store all your gold in a specialized facility to avoid the risk of theft or investigation by the IRS.
  • It is important to understand the contribution limits before opening.
  • Speak to a financial advisor about how much of your portfolio to invest in gold before taking further gold IRA investment steps.

How to Start a Gold IRA in Eight Steps

Here is the complete guide to how to set up a gold IRA in eight simple steps. This is quite a detailed run-through that covers everything you need to know. Let’s get started.

1: Research Gold IRA Companies

The very first thing you need to do is choose your precious metals IRA provider. A gold IRA company provides the support needed to make this complicated process easier. Choosing the right one is essential- but you need to do your research.

This provider will be your point of contact for service issues, queries, account changes, and more- so you need to know they tick all the boxes. Here are some of the things to look for when choosing your provider.

Fees

Gold IRAs involve higher fees than most other individual retirement accounts, but some companies charge more than others. Be sure to compare the costs for the following.

  • Account setup fees
  • Storage fees
  • Custodian fees
  • Transaction fees
  • Broker fees

Some providers also have a one-time fee for joining the company- and the minimum investment required for opening the account can range from $5000 to $50,000. Having all this info will help narrow your search.

Storage Facilities

Most reputable gold IRA providers offer secure storage as part of the package- but not all of them. If you choose one that does not, you need to be willing to arrange storage separately- and it has to be in line with the IRS regulations.

Look into what (if any) IRA-approved depository the company uses. It is highly beneficial if they arrange this service for you, as it can be complicated sometimes going in as an individual.

Custodians

Like the storage facilities, many providers offer custodial services to all account holders. Your custodian is the person who will make any gold purchases on your behalf- but only when you direct them to. Find out how the company arranges custodians for clients, and ensure they are IRS-approved.

Again, not every company includes this service. If you would rather appoint your own custodian, choose a provider that allows you to do so.

Precious Metals Dealers

Lastly, look into the precious metals dealers associated with the provider. Many gold IRA companies have their own broker and dealer services, so you can buy directly through them. This is usually a good way to go, but there are other possibilities.

Setting Up Your Gold IRA

2: Set Up Your Account

Once your research is complete and you have selected your gold IRA provider, the next step is to get set up. This is probably the simplest part- in most cases, you can be set up and ready to go in less than half an hour.

You generally need to provide a few basic details, pay the necessary fees, and fill out some paperwork- but the service team at your chosen company will help you.

3: Appoint a Custodian

If it isn’t already done for you automatically, you need to appoint a custodian to your gold IRA. We already covered a little on this, but here are some further details just to clarify.

  • Custodians are responsible for facilitating all transactions- including gold purchases, fund withdrawals, and transfers.
  • Only the appointed custodian can purchase gold for IRA investments- you cannot do it yourself.
  • The custodian appointed to your account must be approved by the IRS.
  • Many companies provide one for you, but some do not.
  • A custodian could be a bank, trust companies, or other trusted entities.

4: Deposit Funds

Next, you need to fund the account. There are several ways to fund your account for gold investing when you first get started.

Some of the most popular ways to fund a gold IRA include 401(k) and IRA transfers or rollovers- since not everyone has a lump sum available to put into the account.

Rollovers

A rollover involves moving money from one savings account to another- usually either a 401(k) or traditional IRA. Because these accounts have restrictions regarding withdrawals, you must complete the rollover within 60 days to avoid heavy penalties.

The process is as follows.

  • Inform the account administrator on your existing account of your intention to move funds. Instruct them to send the desired amount to your personal account.
  • When the money arrives, you must deposit it into your gold IRA in its entirety no more than 60 days after the withdrawal.
  • Have your gold IRA custodian confirm the deposit.

Transfers

Transfers are very similar- but without the risk of penalties. Instead of the money going to your account, the administrator sends it directly to the gold IRA via the custodian. This is also called a direct rollover.

Other Contributions

If you have funds available that are not already in a tax-advantaged account, you can deposit them straight into the gold IRA. There are technically annual account contribution limits ($6500 for under 50s and $7500 for over 50s), but you can sometimes deposit a higher amount when you first open. Speak to your custodian and gold IRA provider for specific details.

5: Wait for Confirmation

Depending on the deposit method, you may need to wait some days for funds to clear. It shouldn’t generally take any more than a week.

6: Choose Your Precious Metals

Now, you can start investing! You can buy a range of products from a verified precious metals dealer- but first, do your research.

There are a few things to consider when choosing your precious metals.

  • Do you only want to invest in gold, or do you want to include other precious metals?
  • Are you looking for the most stable product- or one with the most potential to yield returns?
  • What is the current price of gold, and is it a good time to buy?
  • Have you confirmed that the precious metals products you are interested in are approved by the IRS?

What Precious Metals are IRS-Approved?

Whatever products you buy for your precious metal IRA must be IRS-approved- and there are some rules regarding what is allowed.

  • Gold must be at least 99.5% pure (except American Eagle coins).
  • Silver must be at least 99.9% pure.
  • Platinum and palladium must be at least 99.95% pure.

You can invest in precious metal coins, bullion, and bars- as long as they meet the minimum purity ratings. Collectible or commemorative gold coins are not allowed. All products must be in mint condition with original packaging (where applicable).

Some of the popular choices for gold IRA investors include:

  • Canadian Maple Leaf coins
  • Australian Kangaroo coins
  • American Silver Eagle coins
  • Platinum Britannia coin

7: Direct Your Account Custodian to Purchase Gold for Your Account

Although this is a self-directed gold IRA, you cannot buy gold yourself. Once you know what precious metals you want to invest in, you should direct your gold IRA custodian to make the purchase for you using the funds.

8: Have the Gold Stored Securely

One of the downsides of owning physical gold rather than paper assets is having to store it somewhere. Gold takes up a lot of space- and you can’t just stuff it under your mattress. Some types of accounts let you store a small amount at home, but other than that, you have to store precious metals in a secure depository.

Generally speaking, your gold IRA custodian will arrange this for you when they make the purchase- but it is good for you to follow to progress and keep up to date with the timeline. There are multiple secure storage facilities in the US and overseas, and the one you use may depend on your location and the company you choose to open an account with.

Remember, although your custodian is likely to recommend a storage facility to you- or have a default option they use- you are entitled to ask for a different depository. As long as it is approved by the IRS, there is no reason you can’t use it to store your gold.

Summary: How to Set Up a Precious Metals IRA

Like all investment retirement accounts – a gold IRA is designed for long-term wealth planning and protection. Opening precious metals IRAs is beneficial for many investors- especially those with concerns about stock market volatility.

Setting up a gold IRA is reasonably easy- but there are several elements to consider during the process. Here is a brief summary of the most important steps.  For more info, check out the gold IRA FAQ page I set up.

  • Pick a gold IRA company with a good reputation that ticks all your boxes.
  • Choose a custodian, storage facility, and precious metals dealer you trust- and that is approved by the IRS.
  • Decide how you want to fund your account and make the necessary arrangement. Don’t forget the 60-day time limit on rollovers unless you want to lose 10% of your money!
  • Research options for specific precious metals products to invest in- but remember that you cannot make the purchase yourself.
  • Your custodian has to make the actual purchases, but gold IRAs are 100% self-directed, and you have complete control over how your funds are used.
  • You cannot store gold IRA products at home- no matter what some websites tell you. A secure storage facility is essential to remain compliant with IRS rules and regulations.

With this step-by-step guide to how to start investing in gold IRA, diversifying your portfolio is easy. Remember to always speak with a financial advisor before going ahead- they can offer advice on how much to invest, and may have recommendations for gold IRA providers to consider.

Tim Schmidt

About 

Tim Schmidt is an Entrepreneur who has covered retirement investing since 2012. He started IRA Investing to share his expertise in using his Self-Directed IRA for alternative investments. His views on retirement investing have been highlighted in USA Today, Business Insider, Tech Times, and more. He invested with Goldco.