Gold IRA Rollover Guide

January 8, 2022- Written by Peter Wilt

Gold Investing with Your Current Retirement Accounts

What is a Gold IRA Rollover?

A gold IRA rollover is when you move your retirement account funds into an IRA that holds physical precious metals. The metals typically come in the form of either bullion coins or bars and are held in a secure depository.

Gold IRA Rollover vs. Gold Transfer

 When choosing to move your money to gold, there are two ways of doing it:  a rollover or a transfer.

A transfer is when you move your funds between accounts of the same type (ex. an IRA to another IRA).

A direct rollover occurs when you move your funds between two different types of account (ex. 401k to IRA).

Disclosure: Some of the links in this article are from sponsors. The list below is an honest review gathered from thorough research, experience, and consumer-based feedback. 

Gold IRA Rollover Process Breakdown

Your gold IRA rollover starts with:

1. Find a gold IRA provider

Your gold IRA provider (such as the companies I review here in my website) helps you learn about gold IRAs, choose a custodian and storage facility, and provides the metals you are wishing to purchase. Look for a provider that can demonstrate a top-notch track record for service, specialized knowledge of precious metals, and a streamlined process.

The gold IRA company helps you choose the precious metal and transfer the money from your current accounts to fund the gold IRA. The best companies provide ongoing service, even after your initial transaction.

2. Choose a custodian

When investing in a gold IRA, it is illegal for you as the account holder to administer or store the metal yourself, and so a custodian is needed to oversee the process of the transference of funds to the gold IRA and its maintenance.

A gold provider is often the one that recommends a proven custodian they work with. For example, my number one choice of gold IRA company, Augusta Precious Metals, recommends a custodian called Equity Trust.

3. Metals are delivered to the depository

Once you have funded your new gold IRA with a new custodial account and chosen the precious metals, the gold IRA provider will make arrangements to send your metal to the secure depository you choose.

Be sure to use a gold IRA company that pays shipping and insurance for the delivery to reduce your costs. Some of them also cover your fees.

4. Metals are stored in a depository

You can choose segregated storage, where your metals are always the exact ones you purchased – or nonsegregated storage, where you own a specific amount of gold or silver but it is co-mingled with gold and silver delivered to the facility by other owners.

Once your metals are securely stored, the rollover process is complete.

Our Recommendation for Your Rollover

Now that I explained how to do a 401(k) to gold IRA rollover, here is the company that I think is the best choice to manage your gold IRA:

#1 Augusta Precious Metals - Top Overall Pick

Augusta has an unmatched reputation and were voted the most trusted gold IRA company in the US. On top of a perfect record with the Business Consumer Alliance (BCA) and Better Business Bureau (BBB), it’s easy to see why so many people—including high-profile investors like Joe Montana—have chosen to work with Augusta.

Some more benefits of reaching out to Augusta:

  • Don’t pressure you & not sales driven – industry’s only no-commission sales floor
  • Only precious metals company with 0 BCA and BBB complaints since opening 
  • Extremely competitive and transparent pricing
  • Main objective: educate you and make the process easy (ask about unique one-on-one web conference)_
  • Endorsed independently by Joe Montana and chosen by his own advisors

#2 Goldco- Low startup investment

Goldco is best known for their low barrier to entry with a minimum investment of just $25,000.

They have a great customer service team- this is a great choice for beginner investors as well as those who have been investing for decades. 

Choosing Your IRA-Approved Bullion Coins & Bars

 The Internal Revenue Service has strict standards on the types of silver and gold assets that can be obtained within a tax-advantaged retirement account.

They include but are not limited to: American Eagle gold coins, Credit Suisse gold bars, Johnson Matthey gold bars, Valcambi gold CombiBars, and Canadian Gold Maple Leaf coins.

Collectible coins can be included in a gold IRA if they are minted and issued under the laws of any sovereign state, the coins or bars are in possession of a bank or non-bank trustee, or the coins are described under 31 USC Section 5112 standard.

Investing in assets that do not meet the approving standard will result in penalties and fines from the IRS. To avoid this, make sure you work with a reputable gold and silver provider who can assure you of the proper choices. 

Accounts Types Eligible for a Gold IRA Rollover 

There are several types of accounts that are eligible for a gold IRA rollover. The most popular accounts are traditional or Roth IRAs, self-directed or employer-sponsored 401(k), SEP IRA, 403(b), 457(b), and TSP.

With an employer-sponsored account, you will most likely have to wait until after your employment has been terminated before you can facilitate a rollover. 

You may be able to do a partial rollover while you are still employed but must still meet the age requirement of being 59.5 years old.

The stipulations are based upon the agreement between the company and the investment organization. You can find out by speaking with your human resources representative to see if they are aware of this and know what the standards are based on the agreement.

For better consultation, speak directly with the investment company to go over what options are available.

They will know the ins and outs of the agreement and may be able to steer you into a better investment plan than what you initially had in mind. 

Gold IRA Rollover FAQs

-How Does a Gold IRA Rollover Work?

 A rollover is the movement of funds from one retirement account to another. This must be completed in less than 60 days to ensure no extra taxes are added onto the money. If it takes longer than 60 days, it's considered a distribution.

Remember that—should you choose to go with a rollover—it is recommended by financial experts that you perform a “direct rollover” instead of an “indirect rollover”. In your new account, you can hold a number of different physical metals, as long as they meet IRS standards. You can also hold  ETFs but it is not usually recommended for a number of reasons.

Indirect rollovers have withholding requirements and are at risk of incurring early distribution penalties. 

-What Are the IRS Rules for a Gold IRA?

  The Internal Revenue Service has rules and regulations on gold IRAs that your custodian can share. If you have an education-focused gold provider like Augusta Precious Metals, they are available to answer all your questions and help make sure you are following all the rules.

The most important rule is pertaining to self-directed IRAs, which states that a custodian must administer your account—just like with any IRA. 

You, the account owner, must not purchase the precious metals with the IRA account funds. The account custodian must send a check to your gold provider to purchase the metals.

Then, once obtained, the provider must send the metals for storage in an secure depository. 

The storage facility (depository) will inventory and safeguard the gold to keep it fit for distribution or liquidation at your order. 

-What Are the IRS Rules for a Gold IRA Rollover?

Here are some of the most important (below). Be sure to consult with your own tax and financial professionals to ensure you are following all relevant rules. 

Per the IRS regulations, if you initiate an indirect rollover from an employer-sponsored plan, you have 60 days from the date you receive the funds from your old custodian to deposit them into the gold IRA account with the new custodian you’ve chosen. However, if you move your money this way – rather than via a direct rollover or trustee-to-trustee transfer – the distribution is subject to a mandatory 20% federal income tax withholding. (Note: There is no mandatory federal tax withholding on distributions from IRAs.)

Moreover, if the rollover is not completed within this time frame, the money will be deemed taxable and you will face a 10% early withdrawal penalty if you are under 59.5 years old.

-What are the IRS Rules for a Gold IRA Transfer?

Using a direct trustee-to-trustee transfer for IRAs – or a direct rollover for moving money from an employer-sponsored plan to an IRA – is considered the easiest and safest way to move money from one account to the other.

With a transfer, there is no need to be concerned with the 60-day time frame restriction imposed on indirect rollovers, nor do you run the risk of penalties from the IRS. 

The transfer is typically done by wire transfer and sometimes can be accomplished within the same business day. The original custodian can also issue a check and mail it out to the new custodian as well.

A transfer is considered the easiest and safest way to move money into your new gold IRA as the process is handled by professionals and does not require the account holder’s involvement—except for their initial approval for the transaction to be performed. 

-What are the Fees Involved in a Gold IRA Rollover?

There may be application or setup fees when establishing your new IRA account with the custodian, and you should expect to pay annual custodian or administration fees, as well as feed related to the storage of your metals.

Different service providers will charge different annual amounts, but the typical cost is around $80.00 for custodians and $100 for storage services (no matter how much in metals you own).

There generally are no rollover or transfer fees to move over any existing IRA or 401(k) funds to a gold IRA account or any other kind of precious metal IRA account. 

-How does an indirect 401(k) to Gold IRA Rollover Work?

First, the funds will be distributed to you MINUS a 20% federal tax withholding; if it is your intention to roll over the full amount from the plan (pre-withholding), you will have to make up that difference yourself from other funds. This is why a direct transfer/rollover may be preferable for many individuals.   

That aside, once you receive the distribution, you will have 60 days to deposit those monies with your new gold IRA custodian. If you do not meet the 60-day deadline, the funds will be considered taxable and you could incur a 10% early-withdrawal penalty if you are under 59.5 years old. 

-What Physical Gold is Allowed in a Gold IRA Rollover?

The Internal Revenue Service has strict rules pertaining to the types of gold and other precious metals allowed in an IRA.

You can invest in “bars” or “bricks” or coins that meet two basic standards.

The metal must be an official currency of a recognized public entity and it must meet a purity standard. In the United States, the purity must be 0.995 or greater to be considered a valid form of precious metal for an IRA.

 The types of physical gold that can be held in a self-directed IRA include the American Gold Eagle coin, the Canadian Gold Maple Leaf coin, the Austrian Philharmonic gold coin, the American Gold Buffalo coin, gold kilo bars, certain gold bullion bars, Credit Suisse gold bars, and Swiss PAMP gold bars.

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