Gold IRA Rollover – FAQ

What Exactly is an IRA?

The acronym IRA stands for “individual retirement account”. Rather than put money in a bank account where it would earn minimal interest you can open an IRA, a savings plan that gives you tax advantages as well as helping your money grow. Depending on the type of IRA you open you can get tax-free growth or tax deferred growth of your wealth. Of course, there are governmental regulations that govern how much you can contribute annually and when you can withdraw funds. People usually open IRAs in addition to the 401(k) accounts that they open with their employer. Their IRA supplements their 401(k) and eventually holds the majority of their investments.

 

What is a Self-Directed IRA?

If you have a traditional IRA you’re pretty much uninvolved with the account except for the quarterly statements that show you the details of your investments. A self-directed IRA puts you in charge of where and how much you invest. Rather than rely on an IRA custodian to make those decisions for you, you are the director of where your money goes and how much you invest in various stocks, bonds, mutual funds, or precious metals.

With a self-directed IRA you can also invest with a conscience, directing your money to investments that provide benefits to people. For instance, instead of investing in a company that produces tobacco you could choose to invest in a pharmaceutical company that is researching cures for deadly diseases. A self-directed IRA takes more time and consideration that a traditional IRA but it gives you nearly complete control over where your money is invested. Plus, you can be sure that your investments are being made with your interests in mind and not to fill the pockets of a professional investment advisor.

 

Can I have more than one IRA?

Yes. However, while you can have as many IRAs as you deem advisable you must adhere to the limits that the government says you can invest in those accounts. A person under 50 at the end of 2011 can feed those accounts just $5000 per year, the entire amount distributed across all the IRAs. Those older than 50 can contribute up to $6000 annually. So if you have four IRAs and you are 45 years old you can put $1250 into each one, $4000 in one and $250 in the remaining three, or any other combination that equals the limit of $5000. If you are 50 or older you can divide $6000 between all your IRAs.

 

Can I use my existing IRA to invest in precious metals?

You will have to ask your custodian or trustee to invest in precious metals and they will make the decision. If you have a self-directed IRA you can invest in gold and other precious metals as you see fit as long as they meet the standards of purity set by the government.

 

How Do I Use my IRA to Invest in Precious Metals?

The simplest way to invest in precious metals is with a self-directed IRA. All you need do is specify a portion of your funds to be used to buy gold, silver, or other precious metals. People typically invest about 20%-25% of their funds into these metals but you can choose any portion of your portfolio to buy bullion or coins as long as the metals adhere to the purity requirements established by the laws governing precious metals IRAs. You can find that information at Regal Assets in a list of permitted IRA metals.

 

What is the difference between a traditional IRA and a Roth IRA?

The main difference between these two account is the way they are taxed. When you put money in a traditional IRA those contributions may be tax deductible. Your income, participation in various employer plans, whether you are married and other factors can qualify you or not for a tax deduction on your contributions. The money you put into your traditional IRA lowers your taxable income depending on these factors.

A Roth IRA doesn’t provide tax deductions on your contributions but the money you access after you retire is tax free providing you delay any withdrawals until you are at least 70.5 years old. You can only have a Roth IRA if your adjusted gross income is less that $107,000 or, if you are married, less than $169,000 when you file jointly.

Like a traditional IRA, there are limits to how much you can contribute to a Roth IRA. If you are over 50 you can deposit up to $6000 but the amount is reduced to $5000 for people who were under 50 at the end of 2011.

Funds withdrawn from a Roth IRA before you reach the age of 59.5 are subject to penalties and taxes unless the funds are used to pay certain educational loans or to buy a home. In these circumstances you will still have to pay tax as you would with income but you would not incur penalties.

 

Can I hold anything other than gold in my IRA?

If you have a self-directed IRA the answer is yes. You can have any type of assets you deem appropriate for a self-directed IRA. In fact, you can have a varied basket-full of not only precious metals like gold but bonds, stocks, mutual funds, cash, and other investments. In fact, as valuable and secure as gold is, it’s always a good idea to diversify your investments and not put all your eggs into one basket, so to speak.

 

Can I Convert My IRA into a Gold IRA?

You definitely can. This is called a “Rollover Gold IRA” because you roll your existing account over into a different kind of investment. You can rollover one account or as many as you wish without having to pay taxes or penalties. Just set up a brand new IRA and transfer the old IRA funds into it, telling the custodian that you wish to invest in gold. Your new custodian will work with the former custodian to transfer the funds. Time is important, however, since there are time limits and other types of restrictions imposed and the IRS may require reporting the transfer; your custodian will be able to help you handle these details. Be sure that you seek out advice from a knowledgeable and reliable tax consultant before you start the rollover process. You may also want to use your 401(k) to invest in gold – you can find out more information about that option here.

 

Will it Take Long to Roll Over my IRA?

That depends. Because of all the rules and regulations imposed on investors by the IRS, there are a lot of factors that come into play when you change anything about an IRA. A Regal Assets representative is trained in handling rollovers in the most expeditious manner possible and can work with your existing IRA custodian to transfer those funds in a timely manner.

 

Can I Buy Other Precious Metals for my IRA?

Since your IRA is self-directed you can hold any assets that you want to provided they conform to established IRS rules and regulations. This means you can invest in gold, palladium, silver, stocks, bonds, and other assets. It’s always a good idea to have a varied portfolio. You might also want to consider buying gold in forms other than bullion or coins, such as gold stocks.

 

Rather than Roll Over Can I Open an IRA with Cash?

Sure you can, but remember that you will only get tax benefits on the first $5,000 if you’re under age 50 or the first $6,000 if you’re over 50.

 

How Much is Typically Invested in Gold and Other Precious Metals?

It depends, of course, on how much the investor can budget. Most individuals use the entire allowable contribution to buy their IRA’s assets but others may only contribute a few thousand dollars. Over the life of the IRA, the typical investor will accumulate around $25,000 in precious metals. Those that began investing in gold and other precious metals years ago may have as much as $100,000 worth of these assets.

 

Why Should I Choose Regal Assets Over Other Custodians for my IRA?

The custodian you choose is critical to the success of your IRA. It may be hard to refuse to use the friend of a business contact or a distant member or your family as a custodian but remember–this is your retirement and you want the best advisor to help you reach your goals. Choose a company that has investor-friendly fees and charges as well as years of experience investing in precious metals IRAs. Be sure, too, that your custodian is up to date on all the current tax laws and how they might apply to your account. This last consideration is especially critical because new tax laws are passed all the time that the general public never knows about.

 

What happens the gold and precious metals after I buy them?

If you are buying gold for an IRA they will go directly from the seller to a secure storage facility that has been approved by the IRS to store gold and other precious metals. You will have access to your gold if you want to take physical possession of them but that will qualify as a withdrawal from your IRA. Withdrawing a portion or all of your gold and other precious metals before a certain age will subject you to taxes and penalties.

Of course, you can buy gold and have it delivered directly to you as often as you want since there is no law against a private citizen owning precious metals. If you have contributed the maximum allowable amount in your IRA and have some funds you want to invest, you can always buy gold and keep it in a safe place in your home or in a safe deposit box.

 

How Do I Know that My Precious Metals are Safe?

Regal Assets takes their custodial responsibility seriously. They store their clients’ precious metals with Brinks, a company of impeccable reputation that is an authorized depository agent for NYMEX/Comex. You can rest assured that your precious metals are safe and secure. In addition, your physical precious metal assets will always be yours unless you decide to sell them at some point.

 

How are my Gold and other Precious Metals Identified?

All of Regal Assets investors’ precious metals are “fungible”, meaning they are stored together and not in individual receptacles. Let’s say that you buy a 2010 American Eagle gold bullion coin and store it in your Regal Assets gold IRA. If you decide to sell that coin or withdraw it for home storage it may not be the precise coin you bought but it will be an American Gold Eagle of the exact purity and weight that you deposited. Your precious metals are grouped according to form, manufacturer, denomination and weight to insure that what you have invested is what you get upon withdrawal.

 

What About Transferring my Gold to Another Storage Facility?

Because Regal Assets selects the best storage to deposit their clients’ assets that also minimizing costs and administrative fees, your precious metals must stay in their secure storage facility unless you transfer them to another IRA custodian. If you want to do this your Regal Assets representative will gladly assist you in making the transfer in a timely, secure fashion. However, you’ll lose the advantage of low fees and storage costs and possibly forego the security of a Brinks storage facility.

 

What About Storing my Gold in my Home or Bank Deposit Box?

You can do that but you many incur tax penalties since your IRA assets are not stored or managed by a third party. If you take personal possession of any of your IRA assets before the minimum age imposed by the IRS it’s the same as a withdrawal whether you store it or spend it. Withdrawing your precious metals is the same as a distribution of assets and must be reported to the IRS.

Although you’ll lose the physical security of a Brinks storage facility, there is nothing stopping you from buying gold and other precious metals for personal use and storing them in your home safe or a bank deposit box. You just can’t withdraw precious metals from your IRA to store elsewhere without incurring penalties and taxes.

 

What's a Custodian and How is one Different from a Trustee?

A trust is a legal arrangement that is meant to hold assets owned by a beneficiary. For instance, a trust might contain a fund that is payable to a person upon the death of the person that set up the trust. A trustee is one that administer the trust account. This trustee controls the trust on the condition that all actions concerning the trust are in the sole interest of the beneficiary.

A custodian manages and holds assets for the owner of those assets. He or she arranges safe and secure storage and follows the instructions of the owner. Both a trustee and a custodian are typically governed in their obligations by the laws of the state wherein they practice.

 

Can I Buy Any Type of Precious Metals for my IRA?

No. The government has established specific requirements for precious metals deposited into IRAs in order to protect the integrity of your investments. Gold has to be at least .9950 pure and silver is required to be .9990 pure. Platinum and Palladium cannot be held as an asset in an IRA unless the metal is .9995 pure.

As to forms of precious metals, you can deposit bullion bars or coins. Only bullion bars made by COMEX, ISO 9000, or NYMEX qualify as these are the three refiners that the IRS authorizes for IRA investment quality metals. Proof coins are required to be in their original, undamaged and unmodified packaging with a certificate of authenticity. Approved coins include Canadian Maple Leafs, Austrian Philharmonics, and American Gold Eagles.

 

Do I Receive Statements Regarding my Investments?

Regal Assets sends quarterly statements through regular mail regarding your precious metals IRA. You also receive an annual hardcopy statement showing all of the transactions that occurred during the year as well as a market valuation of your IRA assets. At any time on any day, you have access to the details of your account by using an online portal.

 

What About The Fees for Setting Up a Self-Directed Gold IRA?

When you choose Regal Assets you’ll be charge a flat fee that covers administration as well as storage. That means setting up your gold IRA and storing your assets is all included in one fee with no extra charges. The fee you are quoted is the fee you pay with no hidden costs or surprise charges.