How To Open A Gold IRA

Opening a 'gold IRA' is a little more involved than opening a 'regular' IRA.

Firstly, if you are thinking of opening a gold IRA, you probably already have an IRA account, either a Traditional or Roth. If that is the case, you have additional considerations: should you convert a part of your existing IRA, the whole of it or just start a new gold IRA?  In any of these cases, you will very likely need to open a new, dedicated precious metals IRA account with an approved adminstrator or custodian. This can be accomplished in 2 steps:

1. Find a gold IRA administrator and custodian
Find out if your existing IRA account administrator can custody physical gold. If so, proceed to step 2 but chances are that they can't because the requirements are very specialized and most IRA administrators are not equipped. In this case, you will need to open a self-directed IRA account with an approved gold IRA administrator and custodian. The government requires that a precious metals IRA be administered and kept under lock and key by authorized depository. Under the IRS rules, you cannot have physical control of your gold investments as long as they are in your IRA and neither can the administrator. It will have to be kept with the custodian in a specially secure place. If you are converting a part of your existing IRA or the whole of it, you can roll over or transfer it to the new administrator.

2. Fund your Gold IRA
You can only put IRS approved gold bars and coins like the American Eagle into your account. Stay away from "proof" coins as they carry a hefty premium to regular coins. But here is where things get a little complicated--you cannot buy and take possession of your IRA gold as that could qualify as a distribution and attract taxes and penalties. The purchase from a bullion dealer must be coded as an IRA purchase and you would want the gold sent directly to the depository by the custodian. The same mechanics hold if you are rolling over an existing IRA to be converted into gold. After that, you will typically receive quarterly statements that show the holding details and value of your IRA gold investments.
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