Required Minimum Distributions and Precious Metals
Precious metals held in a traditional, SEP or SIMPLE IRA are subject to the same required minimum distribution (RMD) rules as any other IRA asset. Because metals pay no interest or dividends, the main challenge is liquidity: you either sell metal to raise cash for the RMD or take coins and bars out in kind at their fair market value.
What an RMD Is
An RMD is the minimum amount the IRS requires you to withdraw each year from certain retirement accounts once required by IRS rules. The rules apply to traditional IRAs, SEP IRAs, SIMPLE IRAs and most employer plans. Roth IRAs do not require withdrawals during the original owner's lifetime. The age at which RMDs begin has changed more than once in recent years, so check the current rule on the IRS RMD page instead of relying on a number from memory.
The basic calculation is the account's fair market value on December 31 of the prior year divided by a life expectancy factor from the IRS tables in Publication 590-B. If you miss an RMD, the shortfall can be subject to an excise tax, which the IRS reduces if the error is corrected promptly.
How Metal Values Feed Into the Calculation
Your custodian reports the account's year-end fair market value on Form 5498. For a metals IRA, that value depends on how the custodian prices each coin and bar, which is covered in our guide to reading your metals IRA statement. Since gold and silver prices move, the dollar value you must withdraw can change noticeably from year to year even if you own the same number of ounces.
Planning Liquidity in a Metals Account
A brokerage IRA can often fund an RMD from dividends or a money market balance. A metals IRA usually cannot. Some practical approaches people use:
- Keep a cash cushion. Leaving part of the account in cash, rather than buying metal with every dollar, can cover a year or two of RMDs and fees.
- Hold divisible products. Smaller coins or bars make it easier to sell just enough. A single large bar may force a bigger sale than needed. See gold coin sizes.
- Use other IRAs. As noted above, traditional IRA RMDs can generally be aggregated and taken from one account.
- Start early in the year. Selling metal takes time to settle. Requesting an RMD late in December leaves little room for delays.
- Plan for fees. Annual custodian and storage fees are often paid from account cash, which also needs to be available.
Taking an RMD In Kind
You do not have to sell metal to meet an RMD. You can take coins or bars out as an in-kind distribution. The custodian values the metal on the date it is distributed, and that value counts toward your RMD and is reported on Form 1099-R.
A few points to watch:
- The value on the distribution date is what counts. If prices fall between your request and the release, you may need to distribute additional metal or cash to meet the full RMD.
- You owe income tax on the value even though no cash was created, so plan how to pay it.
- Whole coins and bars rarely match the RMD exactly. Custodians commonly combine an in-kind release with a small cash distribution to make up the difference.
- Once distributed, your cost basis is generally the reported value, and later sales follow the collectibles capital gains rules.
Roth Metals Accounts
A Roth IRA holding gold or silver has no RMDs for the original owner, which is one reason some people hold metals in a Roth. Beneficiaries who inherit a Roth do face distribution rules, discussed in beneficiaries and inheriting a metals IRA. You can read more about the account itself at Roth gold IRA.
Who Handles What
Your custodian calculates or helps you calculate the RMD, processes the sale or release and issues tax forms. A dealer may buy the metal if you sell. Goldco, a precious metals company, advertises a buyback program for IRA-approved coins; review the written terms before counting on it. Goldco's precious metals specialists are not licensed to give tax advice, so RMD math is best confirmed with your custodian or a tax professional. Read our Goldco buyback program overview for more.
Frequently Asked Questions
Do gold and silver in my traditional account count toward my RMD?
Yes. The full fair market value of the account, metals included, is used to calculate the RMD.
Can I satisfy my RMD with silver coins?
Yes. An in-kind distribution of coins counts toward the RMD at their fair market value on the distribution date.
Does a Roth account holding gold have RMDs?
Not for the original owner during their lifetime. Beneficiaries are subject to distribution rules after inheriting.
What happens if I miss an RMD?
The shortfall may be subject to an excise tax, which can be reduced if corrected in time. Contact your custodian and a tax professional promptly.