At Natural Resource Stocks, we’ve seen a growing interest in IRA investing in gold and silver. Many investors are looking to diversify their retirement portfolios with precious metals.
This guide will walk you through the process of setting up a gold and silver IRA, from understanding the basics to choosing the right metals and custodian.
What Are Precious Metals IRAs?
Definition and Basics
Precious metals IRAs are specialized retirement accounts that allow you to hold certain physical metals in your investment portfolio. These self-directed IRAs offer a unique way to diversify retirement savings beyond traditional stocks, bonds, and mutual funds.
How Precious Metals IRAs Function
When you open a precious metals IRA, you create a tax-advantaged account that holds physical precious metals instead of paper assets. The IRS has strict guidelines on the types and purity of metals allowed in these accounts. Gold must have a minimum fineness of .995, silver must be .999 fine, while platinum and palladium require a .9995 purity level.
Tax Benefits and Contribution Limits
Precious metals IRAs offer similar tax advantages to traditional IRAs. For 2025, the IRS sets the contribution limit for IRAs at $7,000. The IRA catch-up contribution limit for individuals aged 50 and over remains unchanged. These limits apply across all your IRA accounts, so your total contributions can’t exceed these amounts if you have multiple IRAs.
Storage and Custodian Requirements
The IRS mandates that the physical metals in a precious metals IRA must be held by an approved custodian in a secure depository. You can’t store the metals at home or in a personal safe deposit box. This requirement adds to the overall cost of maintaining a precious metals IRA, as you’ll need to pay storage and insurance fees.
Costs and Considerations
Precious metals IRAs typically come with higher fees compared to traditional IRAs. These additional costs include setup fees, annual maintenance fees, storage fees, and potentially higher transaction costs when buying or selling metals. It’s important to factor in these expenses when considering a precious metals IRA as part of your retirement strategy.
While precious metals IRAs can provide a hedge against inflation and economic uncertainty, they shouldn’t be the sole focus of your retirement planning. A balanced approach that includes a mix of assets is often the most prudent strategy for long-term financial security. As we move forward, let’s explore the benefits of investing in gold and silver through an IRA.
Which Precious Metals Can You Hold in Your IRA?
IRS-Approved Precious Metals
The IRS has strict requirements for precious metals in IRAs. IRS-approved precious metals include any gold, silver, platinum, or palladium bullion of a certain fineness if a bank or approved non-bank trustee keeps physical possession of it.
Silver must meet a .999 fineness standard. Popular options include American Silver Eagles, Canadian Silver Maple Leafs, and Mexican Silver Libertads. Platinum and palladium are also eligible, with a required fineness of .9995.
Some popular coins, like South African Krugerrands or British Sovereigns, don’t meet IRS standards and can’t be held in an IRA.
Selecting the Right Metals
When choosing metals for your IRA, consider factors like current market prices, historical performance, and future demand projections. Gold often serves as a stable store of value, while silver can be more volatile but potentially offer higher returns.
Try to mix different metals to balance your portfolio. For example, you might allocate 60% to gold, 30% to silver, and 10% to platinum or palladium.
Storage Options
The IRS requires that IRA-held precious metals be stored in an approved depository. You can’t keep these metals at home or in a personal safe deposit box. Popular depositories include Delaware Depository and Brink’s Global Services.
When choosing a depository, consider factors like security measures, insurance coverage, and accessibility. Some depositories offer segregated storage (where your metals are kept separate from others), while others use commingled storage.
Storage fees typically range from 0.5% to 1% of the metal’s value annually. While this might seem high, proper storage maintains the metals’ purity and ensures IRS compliance.
Purity Standards
The IRS sets specific purity standards for precious metals held in IRAs:
These standards ensure that the metals in your IRA maintain their value and meet regulatory requirements.
Now that we’ve covered the types of precious metals you can hold in your IRA and important considerations for selection and storage, let’s move on to the practical steps of setting up a gold and silver IRA.
How to Set Up Your Gold and Silver IRA
Select a Trustworthy Custodian
The first important step is to choose a reputable custodian. You should look for companies with a solid track record in handling precious metals IRAs. Check their ratings with the Better Business Bureau and read customer reviews. Some top-rated custodians include Augusta Precious Metals with a 4.98/5 rating from 789 reviews and Goldco with 4.97/5 from 4,625 reviews.
When you evaluate custodians, compare their fee structures. Annual fees typically range from $50 to $300 (depending on the account size and services offered). Ask about setup fees, storage fees, and transaction costs. Some custodians offer fee waivers for larger accounts or promotions for new customers.
Open and Fund Your Account
After you select a custodian, you need to open a self-directed IRA account. This process usually involves filling out an application and providing identification documents. Most custodians now offer online applications, which streamline the process.
To fund your new IRA, you have several options. You can transfer funds from an existing IRA or 401(k), make a direct contribution, or do a combination of both. If you transfer from another retirement account, work closely with your new custodian to ensure a smooth, tax-free transfer.
For 2025, the IRA contribution limit is $7,000 (or $8,000 if you’re 50 or older). These limits apply across all your IRA accounts, so plan accordingly if you have multiple IRAs.
Purchase Precious Metals
After your account is funded, you can start to purchase precious metals. Your custodian will typically have a list of approved dealers. Some custodians, like STRATA Trust Company, offer direct purchase options, which potentially save you money on dealer markups.
When you select metals, focus on IRS-approved options that meet purity standards. Gold must be 99.5% pure, silver must be 99.9% pure, and platinum and palladium must both be 99.95% pure. American Gold Eagles and Canadian Gold Maple Leafs are popular choices for gold, while American Silver Eagles and Austrian Silver Philharmonics are common for silver.
Try to diversify your metals holdings. A common strategy allocates 60% to gold, 30% to silver, and 10% to platinum or palladium. This approach balances the stability of gold with the potential higher returns of silver.
Manage Your Precious Metals IRA
Ongoing management of your precious metals IRA involves regular reporting and potential rebalancing. Your custodian will provide quarterly statements that detail your holdings and their current market value. Review these statements carefully to ensure accuracy.
As metal prices fluctuate, you may need to rebalance your portfolio to maintain your desired allocation. Most experts recommend that you review your portfolio annually and make adjustments as needed.
Keep an eye on storage fees, which can reduce your returns over time. Some investors opt to sell a small portion of their metals annually to cover these fees, while others prefer to pay out of pocket to maintain their full metal holdings.
Stay informed about market trends and geopolitical events that can impact precious metal prices. Resources like Natural Resource Stocks offer valuable insights and analysis to help you make informed decisions about your precious metals IRA.
Final Thoughts
IRA investing in gold and silver provides a unique opportunity to diversify retirement portfolios. These precious metals can serve as a hedge against economic uncertainties and potentially reduce overall portfolio volatility. However, investors must consider the higher fees associated with precious metals IRAs and the lack of income generation compared to traditional assets.
We at Natural Resource Stocks recommend a balanced approach when incorporating gold and silver into your IRA. Most financial advisors suggest allocating no more than 5-10% of retirement savings to precious metals. This strategy helps maintain portfolio diversity while potentially benefiting from the stability precious metals can offer during economic turbulence.
For those considering IRA investing in gold and silver, staying informed is essential. Natural Resource Stocks offers in-depth market analysis and expert commentary on factors affecting resource prices. Our platform can help you make informed decisions about your precious metals investments and keep you updated on emerging opportunities in the natural resources sector (without making any guarantees).
