What Is a Gold IRA and How Does It Work?

A gold IRA is an individual retirement account that owns real coins and bars instead of stocks, bonds or mutual funds. It is not a special kind of account in the tax code. It is a regular IRA, set up with a custodian that allows metals, and it follows the same tax rules as any other IRA.

What makes it different is the paperwork and the people involved. You need a custodian that handles metals, a dealer to sell you the metal, and a vault to store it. Each one charges for its part.

This page is the starting point for our gold IRA guides. It covers what a gold IRA is, how the money and metal move, what it costs in broad terms, and who it tends to suit and not suit. Each section links to a deeper page.

What is a gold IRA?

A gold IRA is a self-directed IRA that holds physical gold, and often silver, platinum or palladium too. "Self-directed" means the custodian lets you choose investments beyond the usual stocks and funds.

The name is a sales label, not a legal term. The CFTC and FINRA put it plainly: "Dealers use the 'gold IRA' label" for self-directed IRAs that buy metal.

The tax law normally treats coins and metals as collectibles, and an IRA that buys a collectible is treated as if you withdrew that money. Section 408(m) of the tax code makes an exception for certain US-minted coins and for gold, silver, platinum and palladium bullion of high purity. That exception is what makes a gold IRA possible. The IRS sums it up in Publication 590-A: your IRA can invest in certain US gold, silver and platinum coins "and certain gold, silver, palladium, and platinum bullion."

A gold IRA can be a traditional IRA (taxed when you take money out) or a Roth IRA (taxed going in, usually tax-free coming out). Our page on gold in a Roth IRA covers the Roth version.

How does a gold IRA work?

You open a self-directed IRA, move money into it, and the custodian uses that money to buy metal from a dealer. The metal ships straight to a vault. You never handle it while it is in the IRA.

Here are the usual steps:

1. Open the account. You pick a custodian that offers precious metals IRAs and sign its account papers.
2. Fund it. Most people move money from an existing IRA or a former employer's 401(k). You can also make a yearly contribution, up to $7,500 in 2026, or $8,600 if you are 50 or older.
3. Choose the metal and the dealer. You pick which coins or bars to buy and agree on a price with a dealer.
4. The custodian pays. The custodian sends the money from your IRA to the dealer.
5. The metal goes to a vault. The dealer ships it to a depository, which stores it and reports to the custodian.
6. You get statements. The custodian sends regular statements showing what you own and its value.

How you move the money matters. A direct transfer between custodians is usually the simplest. A rollover where the check is paid to you starts a 60 days clock and, from a 401(k), 20% withholding. Our guides on rolling a 401(k) into a gold IRA and transfer vs. rollover walk through each step. If you still work for the employer, see moving your 401(k) while still employed.

Who holds the metal in a gold IRA?

A bank or an IRS-approved trustee has to hold it, which in practice means a depository working with your custodian. You can't keep it at home.

Three different companies are usually involved:

The custodian must be a bank, a federally insured credit union, a savings and loan, or another entity the IRS has approved. The IRS publishes a list of approved nonbank trustees and custodians, which is one way to check a company you have never heard of.

The storage rule comes from the law itself. The bullion exception only applies "if such bullion is in the physical possession of a trustee." The IRS adds that this also applies if an IRA-owned LLC buys the bullion. Our page on gold IRA storage rules explains the home storage question and the 2021 Tax Court case that settled it. Our custodian guide covers how to check a custodian before you sign.

What can a gold IRA hold?

Only certain coins and bars. Gold American Eagles and other qualifying US coins are allowed by name. Other gold, silver, platinum and palladium is allowed only if it meets a high purity standard.

Rare, collector and many foreign coins are not allowed. If your IRA buys one, the IRS treats its cost as a withdrawal. Our page on what gold and silver can go in an IRA explains the purity standards and which common coins and bars custodians accept.

Some people hold silver as well. Silver follows the same rules but behaves differently. See what a silver IRA is for the differences.

How much does a gold IRA cost?

Expect a small setup fee, a yearly custodian fee, a yearly storage fee, and a dealer markup on every purchase. The markup is often the largest cost.

These are typical ranges we found in October 2026 in published custodian fee schedules:

These companies are examples of what exists, not recommendations. Each sets its own prices and can change them.

Because most yearly fees are flat, they take a bigger share of a small account. On a $20,000 account, $250 a year is 1.25%. On a $200,000 account it is 0.125%.

The dealer's markup doesn't appear on any custodian's fee schedule. The CFTC and FINRA say some fraudulent dealers have charged spreads of more than 300 percent, while other dealers may charge less than 20 percent. Ask for the markup in writing. Our gold IRA fees guide has a full breakdown and a 10-year cost example.

How is a gold IRA taxed?

Exactly like any other IRA of the same type. Holding metal doesn't change the tax rules.

• Traditional gold IRA: contributions may be tax deductible, growth is tax-deferred, and withdrawals are taxed as income.
• Roth gold IRA: contributions are made with after-tax money, and qualified withdrawals are tax-free.

The 2026 IRA contribution limit is $7,500, plus a $1,100 catch-up if you are 50 or older. Money moved by rollover from another IRA or retirement plan doesn't count toward that limit.

One tax trap is specific to metals. If the IRA buys something that isn't allowed, such as a rare coin, the IRS treats its cost as a withdrawal in that year. Our page on gold IRA taxes covers this in more detail.

How do you take money out of a gold IRA?

Either the custodian sells some metal and pays you cash, or it ships you the coins or bars themselves. Both count as a withdrawal at market value.

Before 59½, a 10% additional tax generally applies on top of income tax, with some exceptions. A traditional gold IRA also has required minimum distributions (RMDs), the yearly amounts the IRS makes you withdraw. They start at age 73, or 75 if you were born in 1960 or later. A Roth IRA has no RMDs while the owner is alive.

Selling metal to meet an RMD may carry a transaction fee. Our guide to gold IRA withdrawals and RMDs explains both options.

What can't gold do in a retirement account?

Gold doesn't pay income, it costs money to hold, and its price can fall or stay flat for years. These limits matter more in retirement than at any other time.

• No income. Gold pays no interest or dividends. Any return comes only from a higher price when you sell.
• Yearly costs. Custodian and storage fees are charged every year, whatever the price of gold does.
• Price swings. The CFTC and FINRA warn that metal prices "can fluctuate just like other investments."
• Long flat stretches. The price can stay flat or fall for years at a time. A retiree who needs to sell during one of those stretches has no dividends to fall back on.
• A spread when you sell. Dealers buy back below the market price, so you start each purchase behind.

None of this means gold has no place in a plan. It means gold works as one part of a mix, not the whole plan. Our page on how much of your portfolio should be in gold looks at common ranges, and gold vs. stocks and bonds compares the three. For the wider picture, see how to protect your retirement savings after 50.

Who might a gold IRA suit, and who doesn't it suit?

A gold IRA tends to fit people who want a small share of their savings in physical metal and who are comfortable with the yearly fees. It tends to fit poorly when the account is small, when the money is needed for income soon, or when the sale is happening under pressure.

People in these situations often consider a gold IRA:

• They already have a diversified plan and want a modest metals share inside a tax-advantaged account.
• They have an old 401(k) or IRA large enough that flat yearly fees are a small percentage.
• They want to own the actual metal rather than a fund that tracks its price.
• They are comfortable holding for many years and won't need to sell metal to cover living costs.

A gold IRA is often a poor fit when:

• The account is small. Flat fees of a few hundred dollars a year eat into a small balance.
• You need income from the money. Gold produces none.
• RMDs are close. Selling metal each year to meet RMDs adds costs and work.
• Someone is pushing you. A cold call, a deadline or an offer of free silver is a reason to stop, not to start.
• Most of your savings would go into metal. That concentrates your retirement in one asset that pays nothing.

There are other ways to own gold. Some people buy coins or bars with money outside their IRA (see gold IRA vs. buying physical gold). Others buy a gold fund inside the IRA or 401(k) they already have. The CFTC and FINRA note that exchange-traded metal products might fit in an existing IRA and are "fully regulated." Our page on gold IRA vs. gold ETF compares the two. For an honest list of pluses and minuses, see is a gold IRA a good idea?

This is a decision with tax effects that last for years. Talk to a fee-only fiduciary or a tax professional before moving retirement money.

Is a gold IRA safe and legit?

The account itself is legal, and the tax code allows it. The risks come from how some companies sell it and how much they charge.

The CFTC and FINRA say these frauds "frequently target older workers and retirees." The SEC, NASAA and FINRA warn that self-directed IRA custodians "DO NOT evaluate the quality or legitimacy" of the investments in the account. A real custodian can hold metal bought at a terrible price. The CFTC and FINRA add that once retirement money is in a self-directed IRA, "you are on your own."

Common red flags include cold calls, free gifts, pressure to act quickly, home storage offers, and pitches for "rare" or "semi-numismatic" coins. Our pages on gold IRA scams and red flags and the questions to ask a gold IRA company give you a checklist to use before you sign.

Where to go next

If you are just starting, the pros and cons and fees pages are the two most useful next reads. Every guide in this section is listed below.

If you want to buy gold or silver with money outside a retirement account, our sister site, bestgoldsilverinvestment.com, covers coins, bars and prices.