If you have lots of retirement savings, you should consider diversifying them into a Gold IRA. On the other hand, if you still need to build up your emergency fund or get rid of your high-interest debt, a Gold IRA is probably not the best fit for you.
Provider Fit
A Gold IRA can be a good part of your investment portfolio. But it probably shouldn’t be the whole portfolio. No matter how confident you are in an investment, it’s important to spread out your risk. That said, there are lots of people who want to at least dabble in a Gold IRA. So, what should you look for in a Gold IRA provider?
Investment Goals
Like any other form of investment, a Gold IRA can’t guarantee you growth. Its value will fluctuate just like the market. It also has special fees and rules and can be harder to liquidate than some other retirement account options. But a gold IRA can be a good option for investors who want part of their retirement fund to be in precious metals.
Before shopping around for a Gold IRA company, it’s worth it to step back and consider what you’re looking for in this investment. Some investors turn to gold IRAs as a way to hedge against market volatility or a declining currency. Others like the idea of owning something more tangible than a paper asset. A Gold IRA probably isn’t the best fit for investors looking for income, fast growth, or easy liquidity.
Clear Guidance
Opening a self-directed retirement account that holds physical precious metals isn’t as simple as rolling over money into a mutual fund. There are special rules for setting up the account, rolling over your money, custody, storage, and so on. On top of that, precious metals investments have special considerations that traditional investments don’t, like storage and insurance, bullion premiums, and dealer markups.
Account Mechanics
- A custodian: Your IRA must be self-directed and administered by a special custodian in order to retain its tax-exempt status.
- A precious metals dealer: The company you work with to purchase IRS-compliant coins and bars.
- A depository: A special depository that’s approved to store the precious metals you purchase.
- Delivery/shipping arrangements: Shipping or delivery details for getting your metals to the depository.
Costs and Safeguards
Account Fees
You should never sign up for a Gold IRA without a complete understanding of its costs. Comparing best gold IRA companies means looking closely at their fee schedules and overall account costs. Get the provider’s fee schedule in writing and read it carefully before rolling over any money. Beware of companies that tout low (or no!) setup fees, as other costs could still make the account expensive to maintain.
Questions to ask:
- What fees do you charge the first year/subsequent years?
- Do you charge a flat storage fee or a percentage of the account value?
- Is my storage segregated or commingled? Are there different fees for each option?
- What’s your buyback program?
- Do you charge to liquidate assets or move the account?
- Can the fees go up later?
Gold IRA fees can include:
- Setup/establishment
- Annual/administrative
- Storage
- Insurance
- Shipping
- Dealer markups/spreads
A dealer’s markup/spread is the difference between the price you pay for a coin/bar and the price you’d get if you sold it back to them. Make sure you understand this cost up front, particularly if you’re interested in numismatic/specialty products.
Red Flags
Be wary of any company that won’t give you a clear rundown of its fees, hedges its answers, or tries to rush you into making a decision, especially with a limited-time offer.
Eligible Products
Gold IRA investors are limited to certain types of gold coins/bars. Eligibility is based on the product’s fineness (purity), form, and the mint’s standards.
Many common bullion products are IRS-approved, but specialty/rare coins usually aren’t. This is important because Gold IRA presentations often tout certain coins’ interesting history, perceived scarcity, or low mintage. Keep in mind that these coins will likely come with high markups and may be tough to sell for a good price down the road.
Questions to ask:
- What coins/bars are you recommending? Why are they a good fit for my account?
- What’s the premium for each item (cost over the metal’s spot price)?
The best companies will be happy to lay out the pros and cons of high-markup specialty coins versus low-premium bullion options. There’s no such thing as a right or wrong answer, as it depends on your individual goals.
Rollovers
Transferring money from one custodian to another (known as a direct transfer) is usually the easiest way to fund a Gold IRA since you don’t actually receive the funds. Other rollover options could have tax implications and come with unique time frames.
Keep in mind that if your money is paid to you instead of sent directly to your new custodian, you only have 60 days to deposit it into another qualifying retirement account. Otherwise, it could be considered a taxable distribution that possibly subjects you to additional taxes/penalties.
Questions to ask:
- What’s the difference between a transfer and a rollover?
- What paperwork will I need to complete?
- Who’s responsible for making sure the money gets delivered?
Get all rollover details in writing. Save all rollover forms, account statements, and other documents.
Customer Service
The true test of any precious metals dealer comes after you’ve opened your account. At that point, you’ll need to deal with customer service reps if you want to:
- Understand your statements
- Make updates to your account
- Liquidate some/all of your holdings
- Take distributions once you retire
Questions to ask:
- How detailed are account statements? (For example, will your statement list the type/amount of metals you own as well as information about your storage option?)
- Can I talk to a live person?
- What’s the liquidation/distribution process?
The best gold IRA companies will connect you with friendly, knowledgeable customer service agents. They’ll be happy to walk you through account procedures and never dangle fishy price predictions to sweeten the deal.
Provider Comparison
As you can see, there’s a lot more to Gold IRAs than meets the eye. Don’t fall for slick ads and flashy sales pitches! Compare rollover procedures, product offerings, buyback programs, storage/custody options, and most importantly, fees before investing your retirement nest egg.
Want more personalized investment advice? Consider talking with a tax/financial professional who can take your entire retirement strategy into account.
Before you move your money, ask for each gold IRA company’s rollover procedures and fee schedule in writing!
