Common knowledge says retirement portfolios are limited to stocks, ETFs, mutual funds, and bonds. In reality, the Internal Revenue Service (IRS) allows you to invest in physical precious metals through a special kind of retirement account. You can even roll over different retirement plans or employee-sponsored accounts directly into this account type.

Watch the video above to learn how it works and see the steps for setting up a precious metals IRA.

Introduction to a Precious Metals IRA

The Internal Revenue Code allows investors to take control of their retirement plans through what’s known as a self-directed IRA. This specialized retirement account permits investors to invest tax-advantaged dollars into a variety of physical assets, including precious metals.

Typically, the precious metals you invest in through a self-directed IRA (or a precious metals IRA) are held by a third-party custodian. This simplifies the legal and security aspects of handling valuable metals. However, investors who want to take ownership of their precious metals are in luck.

Based on a combined interpretation of Section 408M and an IRS Field Service Advice Memorandum, there are a limited number of self-directed retirement vehicles that allow for personally holding precious metals.

Steps for Setting Up a Precious Metals IRA (Local or National Storage Plan):

Step 1: Select an IRA Plan

If you’re interested in adding precious metals to your retirement portfolio, the first step is choosing an IRA storage plan. Although there’s only one type of retirement plan that allows for physical metals, you have two different storage options available to you:

  • Local Storage Plan – Through the local storage option, you can have the precious metals sent directly to you, and then you, as the IRA manager, choose where to store them.
  • National Storage Plan – With this option, you don’t have to worry about asset handling. After purchase, assets are placed directly in a national depository. There are various depository locations, so you’ll have no trouble finding one near you.

Step 2: Establish a Valid IRA

Once you’ve chosen a specific IRA storage plan, it’s time to set up the account with a trustee formally – the company in charge of handling, protecting, and overseeing the assets purchased through your self-directed precious metals IRA.

Through Scottsdale Bullion & Coin (SBC), you’ll have a committed IRA liaison handling all the communications and paperwork between you and the IRA trustee. We’ll organize all the necessary forms and submit them once completed to the Direct Trust Company, which will set up the account.

Step 3: Fund Your IRA

With a precious metals IRA successfully established, you’ll want to start taking advantage of the versatile investment options. As with most retirement accounts, there are three ways to fund your IRA:

  • Rollovers – Through gold IRA rollover, you can transition funds from a 401(k), 403(b), Thrift Savings Plan (TSP), or 457 accounts into a precious metals IRA.
  • Transfers – A transfer allows you to move funds from a pre-existing traditional or Roth IRA into a precious metals IRA.
  • Contributions – You can also start a precious metals IRA from scratch and make gold IRA contributions for that year.

If you make a rollover or transfer, A minimum investment of $10,000 is required. Alternatively, setting up a new account requires a $5,000 minimum investment.

Step 4: Consult Your Precious Metals Dealer

Now, it’s time to start putting your hard-earned wealth to work by investing in physical metals. Unfortunately, the sheer variety of asset options, along with the IRS’s strict rules, can be a bit daunting.

For example, gold, silver, platinum, and palladium are permitted metals, but only if they meet specific purity requirements. Furthermore, some coins and bars are allowed, but others are barred. Investing in the wrong assets through your precious metals IRA can result in hefty penalties or even a disqualification of your account altogether.

That’s why it’s advisable to work with an experienced precious metals advisor. SBC can help you through the whole process. Our knowledgeable advisors will highlight the eligible precious metals for IRA investing and offer personalized suggestions based on your time horizon, budget, risk tolerance, and personal preferences.

Step 5: Paying for Your Precious Metals

After you’ve chosen the precious metals you want to add to your retirement plan, the next step is purchasing those assets. The trust company in charge of your precious metals IRA will send the payments directly to you (if you chose the local storage plan) or to SBC (if you chose the national storage plan).

Step 6: Your Retirement Plan Has Precious Metals!

Congratulations! Precious metals are now officially part of your IRA. If you choose the local storage option, you can pick up the metals in person or have them shipped to you. In the case of the national storage option, your precious metals are sent directly to your chosen depository.

If you want to add precious metals to your IRA in the future, simply let your SBC advisor know. They’ll help you through the process and adjust recommendations based on your investment goals.

Of course, we encourage you to consult with your tax or legal experts while Scottsdale Bullion & Coin helps you every step of the way.