How to Convert IRA to Gold


Converting your individual retirement account (IRA) to gold is an easy process that may help protect your retirement savings. 

Why Convert IRA to Gold?

The main reasons to convert your existing retirement account to gold include:

  • Gold tends to offer greater stability
  • The economy may be headed for a recession
  • A gold IRA may protect your retirement

Gold is considered a more stable investment compared to stocks. Due to the current economic issues that the world is facing, treasuries and bonds are also relatively volatile. Converting more of your retirement funds to gold helps hedge against losses in the market. 

The US economy shrank in 2020. While economists expect the economy to eventually stabilize and grow, it may take years for a complete recovery. In the meantime, some experts predict that the country is headed toward another recession.

Choosing stable investments makes sense during a recession. 

Basic Steps to Convert IRA to Gold

Converting an IRA to gold typically involves setting up a gold IRA. A gold IRA is essentially a self-directed IRA that allows you to purchase physical gold that is stored in a safe depository.

The gold is purchased by a broker while the account is created and administered by a custodian. The standard steps for converting an IRA to gold include:

  1. Set up a gold IRA with a custodian
  2. Roll over funds to your Gold IRA
  3. Find a precious metals dealer
  4. Purchase gold 

1. Set up a Gold IRA with a Custodian

The first step in converting IRA to gold is to find the right custodian. Custodians ensure that your physical gold is kept in an IRS-approved depository. 

Some of the features to consider when choosing a gold IRA custodian include:

  • Transparency
  • Flexibility
  • Qualifications
  • Track record

Look for a custodian or company that offers upfront costs and no hidden fees. You should also choose a custodian who meets your specific needs, such as helping you review your options. Comparing the qualifications and business record can also help with your selection. After finding a custodian, establish your gold IRA retirement account. 

2. Roll Over Funds to Your Gold IRA

After opening your gold IRA, you can then fund the account by initiating a transfer from your existing IRA. Depending on the broker who administers your current IRA, you may need to submit a signed form to close out the old account.

The IRS allows you to roll over funds from an IRA once every 12 months. If you complete the rollover within 60 days, you do not need to pay any penalties or taxes for the transfer. Your current brokerage may allow you to receive a paper check sent in the mail or a direct wire transfer to your new account. Using a direct transfer from your current brokerage eliminates the risk of a delay. 

3. Find a Precious Metals Dealer 

With the account funded, you may begin searching for reputable precious metals dealers. Custodians are not required to choose dealers for their clients. However, they can often provide recommendations based on their existing relationships with dealers.

4. Purchase Gold

The last step is to purchase gold. Unlike a stock investment or an exchange-traded fund (ETF), you own a tangible investment. However, it is physically stored in a safe facility. 

As with investing in stocks or ETFs, each sale includes various fees, including the seller’s fee. The fees vary depending on the seller and the type of gold, such as gold bullion, proofs, or coins. A broker handles the transaction and transfers your gold to storage at the chosen IRS-approved depository. With these steps, you should have no problem converting your IRA to gold.

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