Ways to Fund a Gold IRA Account

gold coins and $100 bills

With economic and financial uncertainty growing every day, more and more Americans are looking at how they can protect themselves and their financial assets against the possibility of loss. With markets having lost more than 50% of their value during the 2008 financial crisis, the idea of a repeat of those kinds of losses isn’t appetizing to most investors today. But is there such a thing as a recession-proof asset?

While every asset can suffer losses, many Americans today trust gold to help protect their finances during a recession. Gold’s reputation for safety and stability makes it a treasured safe haven for many people.

Over the past few decades the gold market in the US has changed in ways that have benefited investors greatly. Among the recent developments that has changed the way Americans buy gold is the introduction of the gold IRA, an IRA account that holds physical gold coins or gold bars.

But some of the questions people ask when they first learn about a gold IRA are, how exactly do you start one, and how do you fund a gold IRA account? Thankfully there are some easy answers to both of those questions.

What Is a Gold IRA?

If you’re not already familiar with a gold IRA, it’s a really simple concept. A gold IRA is an individual retirement account (IRA) that holds physical gold coins or gold bars rather than the more common stocks, bonds, or fund shares that most IRA accounts hold. A gold IRA is subject to all the same rules and regulations as any other IRA accounts.

How a Gold IRA Works

If you already have an IRA account, or if you’re familiar with IRA accounts, you may be wondering why you’ve never seen a gold IRA mentioned at any of the brokerages or banks with which you’re familiar.

That’s because in order to open a gold IRA you have to find an IRA custodian willing to manage gold assets, and not every IRA custodian is willing to do that. For a variety of reasons, the number of IRA custodians able and willing to manage gold IRA assets is pretty small. Goldco works with established gold IRA custodians who have experience managing physical gold assets so that our customers can ensure that they can find custodians able to take on the responsibility of administering a gold IRA.

Start a Gold IRA

Once you’ve decided that you want to start a gold IRA and you’ve found a gold IRA custodian, you’ll open up your gold IRA account. A gold IRA account is a type of self-directed IRA account, meaning that you are the one who determines what kind of assets you’ll buy with your retirement funds.

Some self-directed IRA accounts invest in commodities, real estate, private equity, or other alternative or unconventional assets. A gold IRA is a self-directed IRA that invests in physical gold coins or gold bars. Not shares of gold exchange-traded funds, not shares of mining stocks, but actual physical gold.

Fund a Gold IRA

Once you’ve started your gold IRA, you’ll want to figure out how to fund it. We’ll go into more detail later on about the ways to fund a gold IRA account. But you may want to consult with a tax professional to see how different sources of funding could impact your tax obligations when you both buy and sell gold.

Since you presumably are buying gold with the intent to sell it in the future to raise money, just as you would with many other investment assets, it’s important for you to do your research before you buy.

Buy Gold

Once you’ve made the decision to buy gold, your options are vast. As with any other IRA, your gold IRA is prohibited from purchasing collectibles. The definition of collectibles for IRA purposes includes coins and metals generally, but makes a very important exception for the modern Gold American Eagle bullion coins, as well as any gold coin minted to a fineness of .995 or higher.

What this means for practical purposes is that many historically significant bullion coins such as South African Krugerrands, French and Swiss 20 Franc coins, and Austrian 100 Corona gold coins aren’t eligible for IRA investment because their gold content isn’t high enough.

Fortunately there are numerous other options available to you, including the aforementioned Gold American Eagle coins, Canadian Maple Leafs, and Austrian Philharmonics. Goldco also works with mints around the world to bring you exclusive IRA-eligible gold coins whose authenticity and metal content is guaranteed. By working directly with mints, we can offer greater availability, guaranteed purity, and a multiplicity of coin designs that will suit anyone’s taste.

Protect Your Gold

Once you’ve purchased your gold, the question of course becomes how to keep it safe. Gold IRA assets must be managed by a gold IRA custodian, and the physical gold coins or gold bars you buy for your gold IRA will be stored in a bullion depository.

Goldco works with safe and established depositories who have a track record of keeping our customers’ assets safe and secure. Gold held outside an IRA that you store at home is at risk of theft or loss due to fire, flood, or other acts of God. But gold held in a bullion depository is about as safe as gold at Fort Knox.

If you’ve done any reading at all about gold IRAs, you’ve probably heard about something called a home storage IRA. It’s an arrangement that purports to allow you to start a gold IRA and store your gold IRA assets at home. If that sounds too good to be true, that’s because it is.

The IRS takes its regulations seriously, especially the part about IRA assets being managed by an IRA custodian. People who have attempted to store their IRA assets at home have been subject to significant taxes and penalties. That’s why it’s so important to work with trusted partners like Goldco, so that you don’t make decisions that fall afoul of IRA regulations.

Gold IRA Funding Sources

The question most people have when they decide to start a gold IRA is how exactly they want to go about funding it. With gold at nearly $2,000 an ounce, that’s no small question. There are two primary methods of funding your gold IRA.

Annual Contributions

The first way of funding a gold IRA is to make annual contributions. Right now the maximum annual contribution to an IRA is $6,500 per year, or $7,500 if you’re over age 50. At current gold prices that’s only about three ounces of gold. If you’re wondering how you can build up a gold IRA nest egg that way, you’re not alone.

That’s one reason most people don’t choose to start a gold IRA from scratch and fund it with annual contributions. The annual contributions are just too small to be able to build up significant holdings of gold, especially if you don’t start your gold IRA until you’re close to retirement.

Another reason annual contributions aren’t a popular way to fund a gold IRA account is due to the annual fees that you’ll pay for your gold IRA. Between startup costs, account maintenance fees, and storage fees for your gold, you can expect to pay about $200-300 per year to maintain your gold IRA.

For an account of $6,500, that means that you could be paying 3-4% of your account balance in the first year, which is a pretty sizable amount. Even if you fund a gold IRA annually with maximum contributions, it would take you a few years to build up enough funds so that the fees are a small enough percentage to be manageable.

That’s why our customers open their gold IRA accounts with a minimum of $25,000. With a gold IRA of that size, the annual fees are often less than 1%. And for larger gold IRAs, the annual fees are an even smaller percentage. So how do you start a gold IRA and fund your gold IRA account with more than the annual $6,500 maximum? You can do that through a gold IRA rollover.


A rollover is a concept that isn’t unique to gold IRAs. Just about any type of retirement account can be rolled over into another retirement account. One of the few exceptions is that a Roth account can’t be rolled over into a non-Roth account. IRS has a handy rollover chart that shows which kinds of accounts can be rolled over.

Funds rolled over from one account to another are not subject to the limit on maximum annual contributions. So if you want to fund a gold IRA with $50,000, $100,000, or even $1 million or more, you can do it.

In order to roll over funds to fund a gold IRA account, you would first need to have existing assets in a 401(k), 403(b), TSP, IRA, or similar retirement account. Then you would establish your gold IRA account with your gold IRA custodian.

Once your gold IRA account is set up, you can then initiate the rollover process from your existing retirement account into your gold IRA account. Expect the process to take 1-2 weeks due to paperwork, processing, and signature requirements.

After your gold IRA rollover has processed, you’ll be able to use the funds to purchase gold coins or gold bars, which will then be stored in a gold depository. And then you can start benefiting from owning physical gold.

Advantages of a Gold IRA Rollover

A gold IRA rollover can offer you several benefits. Here are four of them.

Maxing Out Your Gold IRA

The most obvious advantage of a gold IRA rollover is that it allows you to sidestep the annual maximum contribution limit for IRA accounts. Rather than being limited at $6,500 a year, you can roll over as much money as you want into your gold IRA.

If you have an orphaned 401(k) account at a previous employer, or retirement savings that you want to protect against the possibility of loss during a market crash, a gold IRA rollover can help you do that, without having to worry about only protecting $6,500 at a time.

Tax-Advantaged Treatment of Your Gold

A gold IRA rollover also allows you to maintain the same tax advantages in your gold IRA as you would enjoy in any other IRA account. This means you can use pre-tax dollars to buy gold, accrue gains tax-free, and only pay taxes when you take a distribution.

If you’re looking to buy gold and aren’t sure whether to make a direct cash purchase or to start a gold IRA, you might want to consult a tax advisor for advice. In certain situations there could be tax benefits to holding gold in an IRA versus holding gold outside an IRA.

And of course you could also start a Roth gold IRA, which would allow you to fund your gold IRA either with post-tax dollars or with a rollover from a Roth account or a Roth conversion from a non-Roth account. With a Roth gold IRA you would pay no taxes on selling your gold when you decide to take a distribution.

Portfolio Diversification

A gold IRA rollover also gives you the ability to diversify your portfolio, while still enjoying the same tax advantages you already have with your existing tax-advantaged retirement accounts. Last year saw both stocks and bonds take losses, and during a severe financial crisis financial assets of all types could get hammered.

But gold has a reputation for performing well during recessionary periods, making it a sought after asset for those looking to hedge their risk during times of economic uncertainty.

Safety and Stability

Gold’s reputation as a safe haven asset and store of wealth goes back centuries. From ancient times gold was valued as a precious metal, and the Bible itself mentions gold hundreds of times. Closer to our time, gold gained 25% from October 2007 to March 2009, the same period in which markets lost over 50% of their value.

Many people are hoping that gold will repeat that kind of performance during the next recession or financial crisis, which is one possible reason that gold demand has taken off in recent years.

Is Gold Right for You?

The decision on whether or not to buy gold, how to buy gold, and whether or not to start a gold IRA is a personal decision that you’ll have to make based upon your financial situation, your financial goals, and your outlook on the strength and health of the economy.

If you believe that the US economy has dodged a bullet and is no longer facing the threat of recession, and that stock markets are going to go on a multi-year bull run, then you’re probably not going to be interested in buying gold, unless you just want a small hedge just in case. But if you believe the US economy is in a major bubble and facing a crisis that could be as severe as 2008, then you’re probably looking very hard at adding gold to your portfolio.

Demand for gold coins and gold bars from investors took off during the 2020 recession and hasn’t looked back. The high gold price right now is an indicator that gold demand remains strong, as the US economy faces headwinds from inflation, indebtedness, and a faltering economy.

Perhaps you’ve already been looking for gold but haven’t had much luck. Or perhaps you’re doing your due diligence and researching different gold buying options, different gold storage options, or different gold sellers.

No matter where you are in your gold buying journey, Goldco is ready to help you take the next step. We’ve helped thousands of customers benefit from owning gold over the years, and have made over $2 billion in precious metals placements. Our numerous 5-star reviews speak volumes about our dedication to customer service and customer satisfaction.

If you want to buy gold, or even if you just want to learn more about how a gold IRA works, or how you can purchase gold directly with cash to store at home, give Goldco a call today. Our representatives are happy to answer your questions and get you started on the path to safeguarding your savings with gold.


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