Gold IRA Rules

Gold IRA Rules

If you are transferring your present IRA into gold, or beginning a new gold IRA, you must follow certain rules. There are many, and they may seem so complicated that you fear breaking them if you try to buy gold for your IRA. Because of this, it is essential for you to become knowledgeable about every rule on gold IRAs, or choose a company and custodian who are able to help. The majority of companies that specialize in gold IRAs will only buy the gold you request and ensure its safe storage, but an excellent company specializing in gold IRAs will ensure that you don’t break any rules, as well as helping you make sure your investment is secure and profitable. What do these rules involve, and will they encourage or discourage you from spreading out your investments?

Types of Gold

The IRS states that only particular kinds of gold are permitted in an IRA, gold that is of a high enough quality to be suitable for investment. You may own gold bars or bullion in an IRA. The gold, however, needs to be from an accredited manufacturer like ISE-9000, LBMA, Nymex or LME. The purity of bars in an IRA has to be at least .995.

You may own gold coins as part of your IRA, however, there are a limited number of countries they can come from, and they have to be of similar purity standards as bars. You may not own collectible coins, however, and you can’t own coins that come from an unapproved mint. Because of this, you must oversee the gold you are purchasing, and where you are purchasing it from. If not, the IRS may see your purchase as taking money out of your IRA, instead of rolling money over. In this case you will have to pay income taxes on your purchase and if you aren’t yet fifty-nine and a half, there is an additional 10% penalty charge.

Your Custodian Matters

In order to have gold as part of your IRA investment, you must have a custodian who will accommodate. This might be harder than you would think since you need a custodian that is knowledgeable, trustworthy, and able to safely store the gold. The majority of custodians who oversee gold IRAs work with reputable depositories so that your gold is protected.

You must have a custodian who is willing to work with you to invest and store your gold, and if you don’t, you must roll your IRA over to someone who will. Normally, this means that you must make a self-directed IRA so that you can invest however you please, and your custodian will simply do as you say. There are many companies specializing in IRAs containing gold, and they will take the time to go over the process with you so that you can rest easy investing in gold.

Restrictions on Funding and Time Frame

There are a couple of restrictions you must know if you are going to transfer or roll over your IRA. First of all, the rollover must be done within 60 days, or the IRS will say that you are taking the money out, and you will face tax penalties. Also, you cannot touch funds from both the IRA you are transferring from, and the IRA you are transferring to, for an entire year. Because of this, you should be sure that this is the correct choice for you before you begin.

When beginning a gold IRA, there are some restrictions on funding. You can only deposit $5,000 into your IRA each year. This means that you will have to build your investment gradually. The only exception to this rule is if you are rolling over or transferring an IRA.

The reviews you will find on this website will help you find the right gold IRA custodian for you, as well as help you comprehend how some of the best custodians of gold IRAs operate. They will tell you about applicable fees and what you should expect from your IRA investments. Also, please remember that there is no guaranteed investment, so you must diversify your assets in order to have a secure future. If you are ready to invest in gold, but are unsure of where to begin, you should work with an IRA custodian who knows about investing in gold, and who will spend the time you need to advise you, and help you understand the process.

IRAs, or individual retirement accounts, have two large advantages: tax savings and compound interest. An IRA is an important element to consider if you want an enjoyable and lengthy retirement, and if you are able to invest money in an IRA and not worry about it, you should do it. It is sometimes confusing, however, when you are first getting started, because there are different kinds of IRAs, so we will cover these and their advantages below.

Those who receive compensation that is taxable during a year may open an IRA, though both spouses in a marriage may have individual IRAs, even if only one of them is working. There is a limit to the amount that may be invested in an IRA each year. With a regular IRA, income is only taxable until you withdraw money, but with Roth IRAs there are no taxes on money you withdraw. You cannot, however, take a deduction for Roth IRA payments when doing taxes, but you sometimes can for traditional IRAs.

You can withdraw funds from IRAs at any time, but if you take it out of a traditional IRA, it is taxable. There is also a ten percent excise tax, in addition to income taxes, if you withdraw money from an IRA prior to the age of 59.5. There are many exceptions to this rule, including to pay taxes owed, medical expenses, for the purchase of a fist home, education, death or disability. In these cases, however, income taxes still apply, unless it is an Education or Roth IRA.

IRA Types

IRAs come in 9 different variations for retirement planning. You probably won’t use all of them, or many of them. However, knowing what each type offers may help you plan well for retirement. ­

Individual Retirement Account: These are Roth or traditional IRAs that are created through a financial institution. The funds are then invested in a variety of places, including CDs, money market accounts, metals, bonds and stocks.

Individual Retirement Annuity: This is very similar to an IRA, but it is done through a life insurance company.

Employer and Employee Association Trust Account: Otherwise called a group IRA, these are traditional IRAs created by unions, employers, or an association for members or employees.

Simplified Employee Pension (SEP-IRA): This is a variation on the traditional IRA, created by employers for employees. It lets employers donate up to 15%, or $30,000 of employees’ salaries to their IRA each year.

SIMPLE – IRA: A variation on the traditional IRA, created by a small business for employees. It allows the employees to fund their IRA to a set amount based on income, with matching employer contributions.

Spousal IRA: An IRA, be it Roth or traditional, that one spouse contributes to for the other spouse, who makes under $2,000 a year. This is only allowed if they file their taxes jointly for the year.

Rollover IRA: A variation on the traditional IRA, allowing the investor to receive a retirement plan distribution.

Inherited IRA: An IRA, either Roth or traditional, that is inherited by someone who wasn’t married to the deceased person.

Education IRA: An IRA for the purpose of funding higher education for the beneficiary. You may not deduct contributions to this type of IRA, but there are no taxes on withdraws.  

This wide variety of IRAs may be difficult to understand, and some become confused when trying to decide which type to choose for their retirement savings. If you have an IRA now, and want to change your investments or roll over your money, talk to a financial adviser so that you can understand all of the options. Also, investment brokers will also sometimes help you make the IRA investments you want, be they precious metals, bonds or stocks.