Best Gold IRA Companies

IRA Rules & Regulations For Gold

As with any investment, the IRS has guidelines of how IRAs, including gold IRAs, are started and managed. This is an overview of some key aspects for gold IRAs.

Administration Regulations

You must use an administrator who works with precious metals and is also approved by the IRS to open a gold IRA. Even though you direct it personally, administrators (brokers, custodians, etc.) are still necessary to act on your behalf.

Storage Facilities

Gold and other precious metals that make up an IRA require storage in vault facilities approved by the IRS. Due to the chance of fraud or theft with precious metals, the IRS will only allow storage facilities that it has approved to be used in IRA account. So it was that only six depository vaults in the United States were approved to store the these gold bars, silver, coins and other precious metals in retirement accounts.

These six approved storage vaults account for nearly all of the gold, silver, platinum, and palladium contained in the precious metals retirement accounts around the country. Yet recently, the IRS has amended this rule to allow for gold IRA be stored outside of the USA, but they still need to be approved by the IRS.

IRA precious metals are still usually held in one of six IRS approved depository company vaults. These companies include the following well-known and imminently trusted institutions:

◎ Delaware Depository

◎ Brinks Security

◎ HSBC Bank USA

◎ JPMorgan Chase Bank North America

◎ Scotia Mocatta

◎ CNT Depository

Tax Regulations

Actual possession of the gold on your part is deemed a distribution by IRS, which means they are subject to taxes or penalties.

Taking physical possession of the gold are subject to income tax at the point of withdrawal. Early distributions see a levy of 10% unless it falls under a predetermined exclusion (see below). Profits can see further assessments via capital gains tax.

Contribution Limits

Gold IRA contribution limits are $6,000 per year, increasing to $7,000 annually once you turn 50 years of age.It can be funded via rollover or with a purchase made through your administrator.

Age Limits

Access to your gold IRA are restricted to age 59½, although you are under no requirement to start taking distributions at that age. You will, however, have to take distributions beginning at age 70.

Early Withdrawal Limitations

We use the word limitations because while there is a 10% penalty for early withdrawal, there are a number of exceptions to the rule, including:

◎ IRA owner becomes disabled or is hospitalized without means to pay the medical bill.

◎ IRA owner dies, and their beneficiary requires access to the funds.

◎ IRA owner loses employment and needs access to funds.

◎ IRA owner wants to purchase a new, first time home (can use up to $10,000) or fund a family members education.

Types of Precious Metals

As we identified earlier there is a limit to the precious metals included in your self-directed IRA.

The IRS stipulates a minimum purity requirement for gold of 0.995 or 24 carats, which you can find in a limited number of products.

As we noted earlier, gold IRAs are self-directed, meaning the individual investor has more direct control over the account and can include a broader range of investments in the account than a traditional IRA.

However, when dealing with gold, you will require the services of a broker to purchase the gold and/or a custodian to serve as the account administrator.

This is one area where investing with metals can get tricky. Custodians are federal or state-approved agencies such as banks, brokerage firms, credit unions, savings and loans, or trust companies that serve as asset-custody providers.

In other words, these services facilitate safekeeping of the securities and management of the account for the individual investor. They do not, however, directly sell the gold to the clients.

The acquisition, or the identification of the dealer, falls to the actual investor. Due to the nature of the gold market, though, many custodians are likely to have recommendations for preferred dealers or vice versa.

The choice for both though remains with the investor. Unfortunately, when dealing in gold, not everything is black and white. Precious metal investing is highly specialized, and scams are prevalent.

To ensure you make a sound investment, you'll need to conduct plenty of research as to which firms will best fit your needs.

In regards to finding the right companies to deal with, look for transparency - both in how they conduct themselves and the fees involved in their stewardship or the acquisition of the gold.

You want your investment to make money, not lose it.

Reputation in the gold market is equally as important.

Review third party ratings and consumer reviews to find the ones that add up to a good overall experience.