How to Convert Your IRA to a Gold IRA

During times of high inflation and market uncertainty, you may be drawn to gold as a safe haven and store of value. The price of gold tends to rise during inflation, and gold can safeguard against losses since it typically moves opposite the stock market. 

You might be exploring whether to convert an IRA to a gold IRA. Doing so might help you preserve and grow your wealth for your retirement. If it’s a retirement strategy you want to pursue, here’s how you can convert an IRA to a gold IRA.

What Is a Gold IRA?

A gold IRA is a self-directed individual retirement account (IRA) that allows you to hold physical gold and other precious metals to contribute to your retirement savings. Traditional IRAs typically hold stocks, bonds and mutual funds. However, those usually aren’t allowed in a gold IRA account.

The physical gold in your gold IRA investment must be 99.5% pure and meet other IRS requirements, such as being produced by an accredited refiner, assayer or manufacturer and carrying the producer’s mint mark. You can also hold only bars, coins or rounds.

You can diversify your investment portfolio with a gold-backed IRA to hedge inflation since gold generally maintains its value during an economic downturn, unlike stocks and bonds. However, gold IRAs carry higher fees and can be volatile and illiquid.

Gold IRAs follow similar rules and requirements as traditional IRAs for distributions and contributions. For 2025, you can contribute up to $7,000 – this amount increases to $8,000 if you’re age 50 or older.

How to Convert an IRA to a Gold IRA

If you already have a traditional or Roth IRA, rolling over all or a portion of your account to a gold IRA or gold Roth IRA can be fairly straightforward.

Choose a Gold IRA Custodian

To convert an IRA to a gold IRA, you must select an IRS-approved gold IRA custodian – a financial institution that specializes in managing retirement accounts that hold precious metals.

Gold IRA custodians, or gold IRA companies, coordinate the purchase, delivery and storage of your gold or precious metal. Custodians are responsible for managing and safeguarding your gold, tracking and reporting values and ensuring your gold IRA complies with IRS rules.

Open a Gold IRA

After you’ve chosen your custodian, you must open a self-directed IRA with the custodian. The process will require you to apply by filling out paperwork with your personal information and agreeing to the terms and conditions of a gold IRA. Some gold IRA companies require a minimum amount to open a gold IRA, often ranging from $5,000 to $10,000. Some minimum requirements can reach as high as $25,000.

Transfer Funds

Next, you must fund your account. To convert your IRA to a gold IRA, you want to make a direct or indirect rollover from your traditional IRA to your gold IRA. Which one you choose can impact your future retirement money.

For a direct rollover, you can ask the administrator of your IRA to roll the funds directly into the gold IRA. Either your administrator or your gold IRA custodian can walk you through filling out the necessary paperwork. Your money will be transferred directly to the gold IRA, or you may receive a check made payable to the gold IRA. You won’t have to pay any taxes.

You can also ask the financial institution holding your IRA to make a trustee-to-trustee transfer directly from your IRA to the gold IRA. No taxes are withheld for this kind of transfer.

For an indirect rollover or 60-day rollover, you receive a distribution from your IRA and have 60 days to roll over the funds to your gold IRA. Except for the Roth IRA, a distribution from your IRA is subject to a 10% tax unless you elect out of withholding or choose a different amount.

Purchase Gold

Now that your account is funded, you can purchase gold for your gold IRA account. Your gold IRA custodian can guide you through selecting gold approved by the IRS for gold IRAs.

If you’re keeping gold in your gold IRA, it must be 99.5% pure, produced by an accredited or certified refiner, assayer or manufacturer, carry the mint mark of the producer and meet fineness requirements. 

Store Gold at a Depository

Holding gold in a gold IRA means storing it in an IRS-approved depository. This requirement is to keep your gold safe and to comply with tax regulations. Your gold IRA custodian can make arrangements for storing your gold.

Depositories must meet strict security standards, such as installing a Class M-rated vault door, which can resist a break-in by hand tools, picks or drills for up to 15 minutes. Depositories are also monitored 24/7, present multiple controls for access and provide insurance.

Beyond the physical security measures and insurance, your depository should document your holdings – serial numbers and certificates of authentication – and regularly audit to verify the presence of your gold and its condition.

If your gold were stored at your home or a bank deposit box, that would be considered a distribution, resulting in taxes and penalties and possibly disqualifying your IRA.

Monitor Your Investment

Your gold IRA is no different from any other investment. Once it’s in place, you must monitor it to ensure it continues to meet your investment goals. Consider these tips to keep an eye on your gold IRA:

• Review your portfolio regularly
• Know when to buy or sell
• Rebalance when necessary
• Hold for the long term
• Keep up with market trends and economic news
• Seek professional financial help

Keeping your gold IRA working for you takes attention and patience. Given the proper care, it can play an important role in your retirement accounts.

Consider Whether to Convert an IRA to a Gold IRA

Converting your IRA to a gold IRA can provide the same tax advantages you get from a traditional IRA while adding diversification, an inflation hedge and a safeguard against market volatility. Now that you know more about how to convert an IRA to a gold IRA, consider whether doing so fits your investment and retirement goals.

Frequently Asked Questions