The Right Gold IRA Starts with Knowing Every Fee and Role

You may have seen lists of the best gold IRA companies. These lists can be a good starting point when looking for a firm to handle your self-directed retirement account, but there are many things to consider when making your choice.

Gold IRAs and other self-directed retirement accounts backed by physical commodities like gold aren’t quite as straightforward as they sound. There are several pieces to the process, and many businesses involved, each with different costs and services.

Identify Every Firm Involved and What It Charges

Here’s a look at some of the things to consider when choosing a firm to help set up and manage your gold IRA. There are many moving parts in a gold IRA, including:

• A dealer that offers the IRA account and will help you buy approved gold and other products for your IRA
• A custodian that will manage the account and handle reporting and recordkeeping
• An IRS-approved depository to securely store your gold and other investments (you cannot keep these at home)

It’s your responsibility to know who’s who and what each business does. Some IRA services work with established custodians and depositories and make the process as seamless as possible for you.

Compare Services, Fees, and Eligible Investments

Find the Best Fit for Your Priorities

There’s no one single list that will identify the best gold IRA service for every investor. You can get the full list of the best gold IRA companies and assess each company against your own priorities before narrowing the field. It depends on many factors, including:

•       Your desired level of involvement
•       The types of gold investments you’re interested in
•       The level of customer service and account management you’re looking for

Weigh Educational Resources and Investment Options

• The types of gold and other precious metals IRAs offered
• Investment options – Some services offer more unusual collectible coins and other investments. If you’re only interested in the most liquid gold bullion, you won’t need a service with a large collectibles selection.
• Gold buyback programs – You may not plan to cash out of your IRA, but it’s still wise to consider how each service handles gold buybacks, just in case you change your mind.
• Turnaround time – How quickly orders are filled, and how quickly you’ll receive confirmation and paperwork.

Look Beyond “Low Fees”

•  IRA set-up fee
• Annual management/administrative fees
• Custodial fees
• Depository storage fees
• Depository insurance fees
• Investment spreads – The difference between the price you pay for gold and what the service will pay for that same gold if you sold it immediately
• Other fees, such as wire transfer fees

Verify Transfers, Storage, and Sales Practices

Check the Transfer or Rollover Process

Many investors transfer funds from an existing retirement account when funding their gold IRAs. The difference between a transfer and a rollover matters because moving funds from an existing retirement account usually involves a direct transfer from one IRA custodian to the next. However, in some cases, you may be able to take control of the funds during the rollover process. Be sure you understand the differences and the time frame you’ll have to roll over the funds to avoid unpleasant tax surprises.

When talking with a gold IRA service, ask them to walk you through their rollover process step-by-step. It may go something like this:

1. Open your self-directed IRA with the gold IRA company.
2. Fill out paperwork to transfer or roll over your existing retirement account into your new IRA.
3. The funds from your existing IRA are sent to the new account’s custodian. (This step could be different for a rollover, depending on the circumstances.)
4. The custodian sends you an order form to fill out.
5. Your investments are purchased and delivered to the depository for storage. You receive confirmation paperwork.

Sounds easy enough, right? Transfers can take some time to complete and can fall through for various reasons, including distribution restrictions from the previous plan, account information discrepancies, and incomplete paperwork. Ask about what happens if precious metals prices change during the transfer process.

Verify Storage and Access Terms

As a general rule, you can’t take precious metal IRA investments home and store them in your home safe. Your investments must generally be stored with an approved depository. Ask the depository or gold IRA service these questions:

• Are your IRA metals investments stored in a segregated account or non-segregated account? With a segregated account, your identified bullion investments are stored separately from other customers’ bullion. With a non-segregated account, fungible bullion investments are commingled with other customers’ investments.
• How are my investments inventoried?
• Are my investments insured?
• Can I take distribution of my IRA bullion at a later date? (Any distribution from a retirement account, including a physical delivery distribution of bullion, can have tax consequences. Consult a tax advisor if you’re considering this option.)

Watch for Pushy Sales Tactics or Vague Promises

A good gold IRA service should be willing to answer all of your questions and walk you through their entire process, from opening your account to making a distribution.

Be wary of any service that rushes you into a decision, discourages you from reading the paperwork, encourages you to invest all of your retirement savings in precious metals investments, or won’t discuss the possibility that precious metals prices could go down. Gold and other precious metals investments could be a good diversifying investment for your retirement savings, but they can be volatile at times, don’t pay interest or dividends, and are subject to dealer markups and mark-downs and storage and insurance fees.

While no one can tell you what will happen with gold and other investments down the road, a good gold IRA service shouldn’t shy away from talking about what could happen, including negative scenarios.

Choose Transparency and Customer Service

At the end of the day, we recommend choosing a gold IRA service that is transparent about their services and fees and treats their customers fairly. Request information from a handful of services, read through the paperwork, and choose the company that best answers your questions and offers the products and services you’re looking for.

One last word about diversification: Consider how your precious metals investment fits into the big picture of your retirement savings strategy. Don’t count on it as a silver bullet to solve all of your retirement savings goals. And be sure to keep a copy of the gold IRA company’s fee schedule and IRA-eligible investment list before sending off your transfer request.