When it comes to precious metals IRAs, there’s only one person I would turn to for advice, and that’s Trevor Gerszt, president of Goldco Precious Metals. Trevor’s company specializes in helping people shelter their retirement savings in precious metals IRAs. I interviewed Trevor via telephone to get the inside scoop on how gold and silver IRAs work.
What’s your personal background in the gold and silver business?
I got into this business originally collecting gold and silver coins as a kid growing up in South Africa. Many years later, after my family came to the US, I got into direct selling of rare coins, didn’t really do as much bullion.
In the most recent couple of years, I noticed there was a huge demand for gold and silver IRAs, but there weren’t a lot of companies that specialized in it, so I have since directed all of our resources toward helping hard-working Americans put physical gold and silver into their retirement accounts. Whether they’re putting in bullion for the short-term or coins for the long-term, or whether they’re just trying to protect themselves in a recovering economy, that’s pretty much my journey in the precious metals business.
Who is eligible for a precious metals IRA?
Anybody with an existing IRA is eligible to roll it over into precious metals. Also, individuals with qualified earned income may be able to establish a new precious metals IRA.
What kind of precious metals can you put in a physical metal IRA?
The metal can be gold, silver, platinum or palladium, depending upon which metals the individual would like. The metals must meet minimum standards of fineness set by the IRS.
Can you give me a high-level overview of how precious metals IRAs work?
The first step is to identify what type of retirement account you have to make sure it qualifies for a rollover to an IRA. Now the good news is most IRAs are eligible to be rolled over to precious metals IRAs. Some employer plans, such as an active 401(k), may prohibit you from rolling over to a new plan while you are employed with them. Employers’ plans vary, so you will have to ask to see if it qualifies.
So once you’ve identified if you’re eligible to roll it over, the next step would be to fill out an application. We’ll recommend a number of custodians that hold precious metals, and once you decide which custodian you want to use, we open up the account on your behalf. At that point we verify that your account information is correct, and work with you in identifying the correct balance of metals to meet your needs.
Once you have set up a precious metals IRA with an authorized custodian, how does the physical gold actually get there?
Once the account has been created and there’s actually an account number associated with your precious metals IRA, your previous custodian, who is currently holding your IRA, will be contacted via paperwork authorizing them to move the dollar amount the individual has declared to transfer or roll over to the precious metals IRA. We’ll go ahead and invoice their IRA for the dollar amount of precious metals they’re purchasing. Once we receive the funds from their IRA account, we then go ahead and make a transfer [of physical metal] from our facility to the client’s [custodial] facility; that’s when we transfer the actual, physical metal into their precious metals IRA.
The whole process can take as little as 10 business days or as long as 45 days, depending upon the time frame of the custodian. The IRS says you have up to 60 days to facilitate this process, which is more than enough time.
So the buyer doesn’t actually send you any money directly?
Correct. Your money never comes directly to us, your money goes to the precious metals custodian. Once the custodian receives the money, they’ll then initiate the purchase on the client’s behalf, so the custodian will know what the client is getting beforehand. The transaction isn’t closed until the custodian receives the actual physical metal. We’re buying it for you, but it’s really for your precious metals IRA.
It wouldn’t be considered a rollover if you sent us the money and we sent you the gold. Everything remains within the shelter of the IRA so you never have to do any of your own reporting.
What happens when you get to retirement age and want to pull some of that money out?
Distributions from a precious metals IRA are the same as any traditional or Roth IRA; you have the option of liquidating your gold, silver, platinum, or palladium within the IRA. Once that process is completed, you can ask for the money that’s in your account. Alternately, you can take an in-kind distribution and have the physical metal shipped from your IRA right to your home address.
So you can take possession of the physical metal at retirement age, and it’s just like a withdrawal?
That’s exactly right. You can liquidate your holdings, just like stocks and bonds, or you can opt to receive the physical metal instead.
If you’d like more information on precious metals IRAs, I would encourage you to call Goldco Precious Metals directly at 855-GOLD-IRA, and they’ll be happy to walk you through the process and answer any additional questions you have.