What is a gold IRA? How it works, the rules and the costs

At a glance

Account types	Traditional, Roth or SEP IRA, opened as a self-directed account
What it can hold	Gold, silver, platinum and palladium that meet IRS purity minimums, plus certain U.S. Mint coins
Who holds the metal	A bank or IRS-approved trustee, usually through a depository
2026 contribution limit	$7,500 to a traditional or Roth IRA, or $8,600 if you’re 50 or older; SEP IRAs follow employer contribution rules
Ways to fund it	New contributions, or a transfer or rollover from another IRA or a workplace plan

How a gold IRA works

Most IRAs sit at a brokerage and can only hold what that brokerage offers, which almost never includes physical metal. A gold IRA is a self-directed IRA held by a custodian that allows alternative assets. The custodian has to be a bank or a company on the IRS’s list of approved nonbank trustees.

Three parties are involved. The custodian administers the account and handles IRS reporting, a dealer sells the metal, and a depository stores it. The process usually goes like this:

1. You open a self-directed IRA with a custodian that handles precious metals.
2. You fund it with a contribution, or by moving money from an existing IRA or 401(k).
3. You pick the coins or bars, and the custodian pays the dealer out of your account.
4. The dealer ships the metal to a depository, where it’s held for your IRA.

The metal doesn’t change how the account is taxed. In a traditional IRA, growth is tax-deferred and withdrawals are taxed as ordinary income. In a Roth IRA, qualified withdrawals are tax-free. When you take money out, you can sell the metal and receive cash, or have the coins or bars shipped to you. Either way it counts as a distribution, valued at the metal’s market price at the time.

Which metals qualify

The tax code treats most metals, coins and gems as collectibles. If an IRA buys a collectible, the IRS treats the purchase price as money you withdrew, so you owe income tax on it and possibly a 10% penalty if you’re under 59½. Section 408(m) of the tax code makes two exceptions, and they’re what make gold IRAs possible:

• Certain coins: the gold, silver and platinum American Eagle coins the U.S. Mint issues under federal law, plus coins issued under state law.
• Bullion that’s pure enough: gold, silver, platinum or palladium at or above the minimum purity accepted for delivery on a regulated futures exchange, as long as a trustee holds it.

In practice, custodians use the delivery standards of CME Group’s COMEX and NYMEX exchanges, and they generally accept bullion coins and bars that meet them:

Metal	Minimum purity	Common IRA-eligible examples
Gold	99.5%	American Gold Buffalo, Canadian Gold Maple Leaf, Austrian Philharmonic, bars from approved refiners
Silver	99.9%	American Silver Eagle, Canadian Silver Maple Leaf, 999 silver bars
Platinum	99.95%	American Platinum Eagle, platinum bars
Palladium	99.95%	Canadian Palladium Maple Leaf, palladium bars

Most collector coins don’t qualify, even when they’re gold. That includes pre-1933 U.S. gold coins and most “rare” or “limited mintage” coins that dealers sometimes push into IRAs at high markups. The exceptions are coins the law names, such as American Eagles, which many custodians accept in proof as well as bullion versions.

Where the metal is stored

Your custodian arranges storage at a depository, a secure vault that specializes in precious metals and carries insurance. You’ll usually choose between two options:

• Commingled storage: your metal is pooled with other customers’ metal of the same type. When you take it out, you get equivalent coins or bars, which may not be the exact pieces you bought.
• Segregated storage: your specific coins or bars are kept apart and returned to you. This usually costs more.

Ask where the depository is, who insures it, and how often it’s audited.

What it costs

A gold IRA costs more to run than a regular IRA at a brokerage. Expect three kinds of cost, and ask for each one in writing before you open an account:

1. The premium over spot when you buy, which is the dealer’s markup over the metal’s market price. It varies a lot between dealers and products.
2. An annual custodian fee for administering the account, sometimes with setup and transaction fees on top.
3. A storage fee from the depository, charged as a flat amount or a percentage of the metal’s value, and usually higher for segregated storage.

You also give up a spread when you sell, because dealers buy back below the price they sell at. We explain how premiums and spreads work and what gold IRA fees look like in separate guides. Our fee calculator adds them up for the amount you have in mind. Before you open an account, weigh the pros and cons of a gold IRA and read our checklist for choosing a gold IRA company.

Funding it with a rollover

Most people fund a gold IRA by moving money from an existing account. The cleanest way is a direct transfer or direct rollover, where the money goes straight from the old custodian or plan to the new one. Nothing is withheld, and it doesn’t count against the once-a-year limit on IRA-to-IRA rollovers.

If a workplace plan pays the money to you instead, it has to withhold 20% for federal taxes. You then have 60 days to deposit the full amount, making up the withheld 20% from your own pocket, or the shortfall is taxed as a distribution. Our gold IRA rollover guide walks through each step.

Withdrawals and required minimum distributions

The usual IRA rules apply. Withdrawals before age 59½ generally face a 10% additional tax on top of income tax, unless an exception applies. Owners of traditional IRAs must start required minimum distributions (RMDs) at 73, or at 75 if they were born in 1960 or later.

With a gold IRA, an RMD means either selling some metal to raise cash or taking coins or bars “in kind,” which is taxed at their market value that day. Missing an RMD triggers a 25% excise tax on the amount you should have taken, reduced to 10% if you correct it within the IRS’s correction window, which can close before two years are up. Roth IRA owners don’t have RMDs during their lifetime. Our guide to taking money or metal out of a gold IRA goes through the options.

Who a gold IRA suits

A gold IRA can make sense if you want some physical metal inside a retirement account and you’re comfortable with the extra fees and paperwork. It’s a poor fit if you’re after income, since gold pays no interest or dividends, or if you might need the money quickly, because selling means going through the custodian and a dealer.

If you only want gold’s price movements, a gold ETF held in a regular IRA does that more cheaply, although you don’t own specific coins or bars. We compare the two in Gold ETFs vs. physical gold.

Frequently asked questions