Precious Metals Investing & IRAs
Precious metals can be purchased directly or, when applicable rules are met, held through an IRA. The ownership structure changes custody, storage, tax treatment and costs.
Key Takeaways
- Verify tax and custody rules using primary sources before moving retirement assets.
- Compare total costs, including dealer transaction economics, not just the annual account fee.
- Know the storage and liquidation process before authorizing a precious-metals purchase.
Gold, Silver, Platinum And Palladium
Federal IRA rules provide exceptions for certain coins and qualifying bullion in multiple precious metals, not gold alone. The exact product and custody arrangement determine whether it fits the exception.
Physical Metal Has Transaction Friction
Unlike an exchange-traded security with a visible quoted market, physical products can carry premiums and dealer spreads that vary by product and market conditions.
IRA Ownership Changes The Process
When qualifying metal is owned by an IRA, the account's custodian and storage requirements matter. Personally purchasing the same metal creates a different ownership and tax situation.
Know Your Reason For Owning It
Potential motives include diversification or a preference for tangible assets. Whatever the thesis, define how much exposure is intended, what would cause you to sell and how the asset fits the rest of the portfolio.
Product Eligibility Is Specific
The IRS generally treats metals and coins as collectibles but provides exceptions for specified coins and certain qualifying bullion. Do not assume that every gold or silver product is suitable for an IRA.
Price Is More Than Spot
Physical metal is commonly bought above a reference market price and sold under different dealer terms. Premiums and spreads can materially affect the economics of entering and exiting a position.
Storage Depends On Ownership
Personally owned metal and IRA-owned bullion are different structures. IRS guidance states that qualifying IRA bullion must be in the physical possession of a bank or an approved nonbank trustee.
Plan The Exit Before The Purchase
Before buying, understand how the asset can be sold or distributed, how a dealer's buyback process works, and which costs could apply. Convenience is useful, but it is not the same as a guaranteed resale price.
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- Gold Vs Silver
- Gold IRA Vs Physical Gold
- Gold IRA Vs Gold ETF
- Gold Coins Vs Gold Bars
- Dealer Fees And Spreads
Primary Sources
- IRS: IRA FAQs And Precious-Metals Rules
- IRS: Rollovers Of Retirement Plan And IRA Distributions
- IRS Publication 590-A