Precious Metals IRA vs a Conventional IRA
A precious metals IRA is not a separate kind of account under tax law. It is an IRA, traditional or Roth, that holds IRS-eligible physical metal instead of, or alongside, stocks, bonds and funds. The tax rules are the same; what changes is the custodian you need, where assets are kept, which assets qualify, and how costs are charged.
What Stays the Same
The tax wrapper is identical. Whether your IRA holds a stock index fund or gold coins, the same IRS rules generally apply:
- Contributions follow the same annual limits, which the IRS adjusts periodically; see the IRS contribution limits page for current figures.
- Tax treatment is the same: traditional IRA contributions may be deductible and distributions taxed as income, while qualified Roth distributions are tax free, as described in IRS Publications 590-A and 590-B.
- Distribution rules, including the additional tax on early distributions before the IRS-defined age and required minimum distributions once required by IRS rules, apply to both.
- Rollover rules, including the 60-day window and the one-indirect-IRA-rollover-per-12-months limit, apply to both.
Our page on traditional vs Roth gold IRAs explains how the two tax types apply to metal.
What Changes: Five Practical Differences
1. A self-directed custodian
Most conventional IRAs are held at custodians that offer only securities. To hold physical metal, you need a self-directed IRA custodian willing to hold alternative assets. Goldco, a precious metals company, says it works with all major self-directed IRA custodians. See self-directed IRA basics.
2. Physical storage at a depository
Securities exist as electronic records. Metal must be physically kept somewhere, and because IRA assets must be held by a trustee or custodian under 26 U.S.C. 408, that means an approved depository rather than your home. Goldco sends IRA metal to an independent insured depository.
3. Eligible assets
Conventional IRAs can hold a wide range of securities. For metal, 26 U.S.C. 408(m) treats collectibles as distributions unless they meet specific rules: generally .995 fineness for gold, .999 for silver, and .9995 for platinum and palladium, with a named exception for American Eagle coins. Many collectible coins do not qualify. See IRA-eligible gold coins.
4. Costs
Conventional IRAs often have low or no account fees, with costs mainly in fund expense ratios. A precious metals IRA typically has custodian administration and storage charges, plus the premium over spot paid on each coin or bar. As an example, Goldco's published fee statement is shown below.
Gold IRA Fees
The required minimum purchase at Goldco to start a gold IRA is $25,000. Goldco’s preferred Custodian charges a flat annual account service fee which includes a one-time IRA account set-up fee of $50. as well as a $30 wire fee. Annual maintenance is $100, and storage is $150 for segregated storage or $100 for non-segregated storage.
Fees for gold storage and custodianship can vary depending on the company you select to handle these services (required by the IRS, as all IRA assets must be managed by a custodian). Depending on the Custodian, storage fees can range from $10 to $60 per month, or as a percentage of assets, from 0.35% to 1% annually.
5. Income and liquidity
Metal produces no dividends or interest, and selling it involves the custodian, a buyer and the depository, which typically takes longer than selling a fund. Goldco advertises a buyback program for IRA-approved coins "at the highest price"; read the written terms.
The Diversification Angle
The main reason people add a precious metals IRA alongside a conventional one is diversification. Gold's price has at times moved differently from stocks and bonds, and some people hold it as a potential hedge against inflation, as World Gold Council research discusses; Bureau of Labor Statistics CPI data lets you look at inflation history yourself. Those relationships are not consistent, and gold prices can fall. Precious metals can be one way to diversify a portfolio, but how much, if any, belongs in yours is a question for a licensed financial professional. Our pages on gold for diversification and how much gold to own discuss the considerations.
Holding Both
You can have more than one IRA. Many people keep a conventional IRA for securities and open a separate self-directed IRA for metal, funded by a transfer of part of an existing balance. A trustee-to-trustee transfer between IRAs is not counted toward the once-per-year rollover limit. Our IRA-to-IRA transfer guide covers the steps, and the Goldco gold IRA page describes how Goldco sets up the metal side.
Frequently Asked Questions
Is a precious metals IRA taxed differently from a regular IRA?
No. A traditional precious metals IRA is taxed like any traditional IRA, and a Roth like any Roth. The holdings differ, not the tax wrapper.
Can my existing IRA custodian hold gold coins?
Many conventional custodians cannot hold physical metal. Ask yours; if not, a self-directed custodian is needed.
How are required distributions handled with metal?
You can sell metal to take cash or take metal in kind, valued at fair market value. See RMDs and precious metals.
Can I keep IRA gold at home?
Taking personal possession of IRA metal may be treated as a distribution. Check IRS guidance and consult a tax professional before considering it.