Last Updated: February 7, 2026 | Version: 2.0 | Trusted by retirement-focused patriots nationwide

PrepperGoldIRA Staff | Updated February 7, 2026

What Is a Gold IRA and How Does It Work

📋 Quick Summary (Click to Expand)

A gold IRA is a self-directed retirement account that holds physical precious metals instead of paper assets. Legalized by the Taxpayer Relief Act of 1997, these accounts let you hold physical gold, silver, platinum, and palladium in IRS-approved depositories. The same contribution limits and IRS rules as traditional IRAs apply. Three separate entities manage your account: a precious metals dealer coordinates the process, a custodian holds the IRA, and a depository stores the metals. This is educational content, not financial advice. Consult a qualified professional before making retirement decisions.

📑 Table of Contents (Click to Expand)

1. What a Gold IRA Actually Is
2. The Three Players: Dealer, Custodian, Depository
3. Gold as a Wealth Asset: 5,000 Years of Evidence
4. The 1997 Taxpayer Relief Act
5. How to Set Up a Gold IRA
6. Costs and Fee Structure
7. Limitations and Tradeoffs
8. Who This Makes Sense For
9. Frequently Asked Questions

A gold IRA is a self-directed retirement account. It holds physical precious metals. Not paper certificates. Not digital entries. Actual gold bars and coins in an IRS-approved vault.

This guide explains the mechanics. The costs. The limitations. And the three entities that manage your account. No hype. No pressure. Just the facts for your own decision.

Already understand the basics? Compare companies in our best gold IRA companies ranking. For step-by-step rollover instructions, visit the 401k to gold IRA rollover guide.

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What a Gold IRA Actually Is

A gold IRA works like a traditional IRA. Same contribution limits. Same tax treatment. The difference is what sits inside.

Instead of paper assets, you own physical gold. Also silver, platinum, and palladium. The IRS requires specific purity standards. Gold must be 99.5% pure. Silver must be 99.9% pure. Platinum and palladium must be 99.95% pure.

Approved products include American Gold Eagles, Canadian Gold Maple Leafs, and bars from certified refiners. Collectible coins, rare coins, and jewelry are prohibited.

Contribution limits for 2026: $7,000 per year if under 50. $8,000 if 50 or older. Same limits as any traditional or Roth IRA. Same IRS rules apply. The only difference is what backs your account. For the full breakdown by account type, see our gold IRA contribution limits guide.

What this means for you: Your retirement account holds tangible metal in a vault. Not entries on a screen. The IRS treats it the same as any other IRA.

You can set up this account as traditional or Roth. A traditional precious metals IRA uses pre-tax money. You pay taxes on withdrawals during retirement. A Roth version uses after-tax money. Qualified withdrawals may not be subject to additional federal income tax. Consult your tax professional for your specific situation. Same early withdrawal penalties apply. Pull money before age 59½ and expect income tax plus a 10% penalty. See our gold IRA early withdrawal guide for penalty exceptions.

For a side-by-side breakdown of account types, see our regular IRA vs gold IRA review.

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The Three Players: Dealer, Custodian, Depository

This is the most misunderstood part. Three separate entities manage your account. They are not the same. Confusing them leads to costly mistakes.

The Precious Metals Dealer

Companies like Augusta Precious Metals are dealers. They educate you on this type of account. They help you decide which metals to purchase within IRS rules. They coordinate the rollover paperwork. They earn money from metal markups.

The dealer does not hold your IRA. Does not custody your account. Does not store your gold. They are guides and suppliers. Before choosing a dealer, check their track record. Our gold IRA BBB rating analysis shows what complaints reveal about each company.

The Custodian

The custodian is IRS-approved to hold a self-directed IRA. Examples include Equity Trust and STRATA Trust. They open your account. They receive rollover funds. They execute purchases after your authorization. They file required IRS reporting.

The custodian does not sell you gold. Does not give investment advice. Does not recommend dealers. They are administrators.

The Depository

The depository physically stores the gold. Examples include Delaware Depository and Brinks. They provide insurance. They issue storage statements. Your metals must be stored here to stay IRA-compliant.

The bottom line: You work primarily with the dealer. They coordinate with the custodian and depository on your behalf. Think of the dealer as the project manager for the entire process.

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Gold as a Wealth Asset: 5,000 Years of Evidence

Gold has maintained purchasing power for millennia. Ancient Egyptians used it. Romans built monetary systems on it. Every major civilization recognized its value.

The Roman Empire offers a clear example. During the late 3rd century A.D., the government cut silver content in their coins. Inflation followed. Emperor Diocletian reformed the entire monetary system around gold coins. Gold could not be faked or diluted.

This pattern repeated throughout history. When currencies lost value, gold maintained its worth. Central banks recognized this centuries ago. They still hold massive reserves today. Central banks increased their gold holdings by 14% in the first nine months of 2023 alone. For a deeper look at what happens when currencies fail, see our gold hyperinflation history analysis.

Why this matters: Gold has a track record measured in thousands of years. No paper currency in history has lasted that long. That historical context is worth understanding before making retirement decisions.

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The 1997 Taxpayer Relief Act

Gold could not legally go into an IRA until 1997. The Taxpayer Relief Act changed that. It allowed certain U.S. gold coins immediately. In 1998, platinum, silver, and palladium bullion were approved.

Before 1997, your IRA options were limited to paper assets. The new law opened physical metals to individual retirement accounts for the first time.

Gold returned an average of 7.98% annually between 1971 and March 2024. In 2023, it returned 13.1%. Past performance does not guarantee future results. Nobody can accurately predict where prices will go. But the historical data exists for your own evaluation. See our gold investment returns analysis for real performance numbers.

Different time periods tell different stories. Your own financial professional can help you evaluate what matters for your specific situation. For a data-driven comparison across asset classes, see our gold IRA vs stocks vs cash breakdown.

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How to Set Up a Gold IRA

Setting up this account involves four steps. The dealer coordinates most of the process on your behalf.

Step 1: Contact the dealer first. A company like Augusta Precious Metals explains the rollover rules. They confirm your eligibility. They introduce the custodian they work with. No money moves during this step. Not sure which company to start with? Our Augusta Precious Metals comparison breaks down the top five.

Step 2: Open the account with the custodian. The custodian opens a self-directed precious metals IRA. They assign an account number. They prepare rollover paperwork. This happens before any funds transfer.

Step 3: Fund the account. Transfer from an existing IRA. Roll over from a 401(k), 403(b), or TSP. Or make new contributions up to the annual limit. Direct transfers avoid tax consequences. See our 401k to gold IRA rollover guide for the full process. For rules on direct vs indirect transfers, our rollover rules breakdown covers the 7 critical differences.

Step 4: Choose and purchase the metals. With the dealer’s help, you select IRS-approved metals. The custodian executes the purchase. The metals ship directly to the depository. You never touch the gold. That is by design.

The practical takeaway: The dealer handles the coordination. You make the decisions. The custodian handles the paperwork. The depository holds the metal. Each entity stays in its lane.

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Costs and Fee Structure

These accounts cost more than traditional IRAs. You pay for physical storage, insurance, and specialized custodian services. Fees vary by company. Contact the dealer directly for exact amounts.

Typical fee categories include a one-time setup fee. Annual custodian fees for account maintenance. Annual storage fees based on metal value. Transaction fees each time you buy or sell. And a dealer markup over the spot price when you purchase.

Here’s the real impact: Fees add up. On a small account, they represent a significant percentage of your balance. Ask the dealer for a complete fee schedule before committing. Compare multiple companies. Our gold IRA fees breakdown shows what to expect.

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Limitations and Tradeoffs

These accounts have real limitations. Understanding them matters as much as understanding the appeal.

No income generation. Gold does not pay dividends or interest. It sits in a vault. Your only return comes from price changes when you eventually sell.

Storage restrictions. You cannot store IRA metals at home. Not in a safe deposit box. Only in an IRS-approved depository. Some companies advertise “home storage” options. The IRS considers those distributed assets. That triggers taxes and penalties.

IRA vs direct purchase. The rules above apply only to metals held inside an IRA. If you buy gold directly outside an IRA, you can take physical possession and store it yourself. Different rules, different purposes. Our US gold ownership limits guide explains what you can legally own outside retirement accounts.

Required Minimum Distributions. Once you reach age 73, you must take RMDs from traditional accounts. You can take physical possession of metals and pay taxes on their value. Or the custodian sells metals and distributes cash. Roth accounts have no RMDs during your lifetime.

Liquidity considerations. Selling physical gold takes longer than liquidating paper assets. Expect 3 to 10 business days. Plan accordingly if you need cash fast.

Why this matters: A precious metals IRA is not a complete retirement solution on its own. It serves a specific purpose within a broader portfolio. Consult your financial professional about what allocation, if any, makes sense for your situation.

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Who This Makes Sense For

A precious metals IRA may make sense if you already have a substantial retirement account. If you are within 10 to 15 years of retirement. If you want to add a tangible asset class to your portfolio.

Federal employees with TSP accounts can transfer funds after separation from service. Our federal employee gold IRA guide covers TSP transfer rules and eligibility requirements. Active military and veterans should also see the TSP to gold IRA military guide for legacy planning specific to service members.

Small business owners with SEP IRAs have rollover options as well. See our SEP gold IRA guide for contribution traps to avoid. Self-employed individuals with solo 401(k) plans can review the solo 401k gold investment breakdown.

Younger investors with decades until retirement may benefit more from growth-oriented allocations. A gold IRA is not for everyone. Your financial professional can evaluate what fits your specific circumstances.

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📋 FAQ (Click to Expand)

Can I store my gold IRA metals at home?

No. IRS regulations require all IRA metals to be stored in an approved depository. Companies advertising “home storage” options are misleading. The IRS treats home-stored IRA metals as distributed assets. That triggers taxes and a 10% penalty if under 59½.

Can I roll over my 401(k) into a gold IRA?

Yes. You can roll over from a 401(k), 403(b), TSP, or traditional IRA. A direct trustee-to-trustee transfer avoids timing issues. Indirect rollovers must be completed within 60 days. See our 401k to gold IRA guide for the complete process.

Does gold in an IRA generate income?

No. Gold produces no dividends or interest. Your return comes from price changes when you sell. This type of account serves a different purpose than income-generating assets.

What happens to my gold IRA at age 73?

Required Minimum Distributions begin at age 73 under current SECURE 2.0 Act rules. You can take physical possession and pay taxes on the value. Or the custodian sells metals and distributes cash. Roth accounts have no RMDs during your lifetime.

Can I buy any type of gold for my IRA?

No. IRS regulations require 99.5% purity for gold. Approved options include American Gold Eagles, Canadian Maple Leafs, and approved bars. Collectible coins, rare coins, and jewelry are prohibited. See our American Gold Eagle review for coin-specific details.

Is a gold IRA company the same as a custodian?

No. Completely different entities. The dealer educates and sells metals. The custodian holds your IRA and handles IRS paperwork. The depository stores the physical gold. Marketing blurs these roles constantly.

How quickly can I sell metals in my IRA?

Selling takes 3 to 10 business days typically. Contact the dealer, approve the sale, the dealer processes it, the custodian transfers funds. Slower than liquidating paper assets. Faster than selling real estate.

Can I lose money in a gold IRA?

Yes. Gold prices fluctuate. From 2011 to 2015, gold dropped from roughly $1,900 to $1,050 per ounce. Past performance does not guarantee future results. Consult your financial professional about your specific risk tolerance.

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Additional Resources

• IRS Retirement Plans FAQs Regarding IRAs (Official IRS guidance)
• SEC Guide to Self-Directed IRAs (Investor protection information)