Why Do I Need a Gold IRA Custodian?

IRA account

Many Americans today are looking to protect their finances ahead of a potential recession. And many of those people have chosen to do so by buying gold, which has served as a safe haven asset for centuries.

One popular method of buying gold is through a gold IRA, a retirement account that owns physical gold coins or gold bars and that offers all the same tax advantages as any other IRA account. But while the process of starting a gold IRA can be done easily, there’s one important hurdle that has to be overcome first.

Starting a gold IRA requires finding an IRA custodian that is willing to administer a gold IRA. And if you’re not already familiar with how IRAs work, you might be wondering why you need a gold IRA custodian.

The Role of an IRA Custodian

All IRA assets have to be administered by a custodian. So when you open an IRA with a brokerage, or with your bank, the brokerage or your bank acts as the custodian for your IRA’s assets.

A custodian performs the custodial and managerial duties required of them, including filing necessary forms with the IRS, providing accountholders with asset statements, and executing sales, purchases, and distributions at the accountholders’ direction.

Many people don’t think of the role an IRA custodian plays. They may just search for “open an IRA” or “how to start an IRA” and find a custodian that offers them the lowest cost IRA they can get.

They may not give a second thought to the role an IRA custodian plays in managing and administering IRA assets. But a gold IRA is different, and requires some thought and attention when picking a custodian.

Why a Gold IRA Is Unique

Gold IRAs own physical gold coins or bars, unlike most IRA accounts in this country which own stocks, bonds, or shares in funds. That brings up some unique challenges that not every IRA custodian wants to deal with.

For one thing, gold has to be stored somewhere, which means that it will have to be stored at a bullion depository. That imposes fees and paperwork that your custodian will have to keep track of.

Then there’s the fact that many people don’t make many purchases with their gold IRA. They might make a big one-time 401(k) to IRA rollover to fund their gold IRA, but once they’ve bought their gold they often hold it until it’s time to sell.

So unlike a brokerage IRA which can make fees off people buying and selling stocks, bonds, and fund shares on a daily basis, a gold IRA custodian can’t do that. That also means that, unlike brokerage IRAs that may be free to open, a gold IRA is generally going to require an annual account maintenance fee, which might run you around $125.

How to Find a Gold IRA Custodian

One way to find a gold IRA custodian is to find trusted partners who have experience working with gold IRA custodians. Goldco has helped thousands of customers through the gold IRA setup and gold purchase process over the years, and we have worked with a number of gold IRA custodians.

When you choose to do business with Goldco, you can choose from among the custodians we work with, who have established track records of catering to customers’ gold IRA needs.

3 Easy Steps to Start a Gold IRA

Starting a gold IRA doesn’t have to be difficult, and can be done in just three easy steps.

1. Choose to Do Business With Goldco

The first step to starting a gold IRA when working with Goldco is to sign an agreement with us saying that you understand our terms of doing business. Once you’ve done that, you can choose to start a gold IRA with one of the custodians with whom we work.

You might wonder why you have to start a gold IRA first. Well, that’s because in order to fund a gold IRA you have to have an IRA account open.

2. Fund Your Gold IRA

Once your gold IRA account is open, you can then fund it. Many people choose to fund their gold IRAs with a rollover from a 401(k), 403(b), TSP, IRA, or similar account.

Rollovers or transfers from these accounts to a gold IRA normally occur tax-free. To start the rollover process, you contact your current retirement plan administrator or custodian to let them know that you would like to start the rollover process.

This normally requires telling your current custodian the name of your new gold IRA custodian, your account number, and where funds should be sent. Before funds are released, your current custodian will make sure that you fill out any paperwork that needs to be completed, that any signatures required to release funds have been obtained, etc.

Expect the rollover process to take a week or two, depending on how long it takes your current plan to release funds, how they are sent (mail or wire), etc. Once your funds are deposited in your gold IRA, you’re ready to proceed to the next step.

3. Buy Gold

Once your gold IRA has been funded, you’ll be able to start buying gold coins or bars with those funds. The choice of which coins to buy is entirely yours, as long as those coins are IRA-eligible.

Most gold coins produced today by mints around the world are minted to a fineness over the .995 legally-required minimum, making them eligible for acquisition by a gold IRA. Goldco offers a variety of IRA-eligible gold coins, many of which we source directly from the mints that produce them, ensuring that your gold IRA coins are authentic.

Want to Learn More About a Gold IRA?

A gold IRA can be a useful vehicle to own gold and other precious metals in a tax-advantaged account. You can use a gold IRA to diversify your portfolio, hedge against inflation, or protect against recession-related loss.

Whatever your reason for opening a gold IRA, Goldco’s specialists can help you through the process. We have helped thousands of our customers navigate the gold IRA and gold purchase process, with over 5,000 5-star reviews, and have placed over $2 billion in precious metals.

If you want to learn more about how a gold IRA can help you safeguard your savings, call Goldco today.

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