How to Choose a Gold IRA Company

1. Identify your gold IRA investment goals and priorities

You need a gold IRA if you want to hold physical gold in your investment portfolio. Review your investment goals and determine if having physical gold is a good fit for your investment strategy, and if so, how much gold you’d like to hold.

Be clear on why you want to hold gold. If it’s part of a larger investment strategy, then a gold IRA could be a good fit. If it’s to protect against financial collapse and you want to be able to spend it in an emergency, then a gold IRA may not be for you, as the gold must be stored in an IRS-approved facility.

In addition to deciding how much gold, if any, to add to your holdings, you’ll want to determine the type of IRA best suits your needs: traditional, Roth, SEP or SIMPLE.

If you are rolling over an account, it may be best to keep the funds in an account that is taxed the same way, either traditional to traditional or Roth to Roth, to avoid a taxable event. You should consult your financial advisor about your specific situation.

2. Compare gold IRA company features

When comparing gold IRAs, you’ll want to understand the fees, storage options and reputation. “Look out for additional charges, specialty coins, proof coins, rare coin, and other upcharges for supposed rarities,” Joshua D. Glawson, of Money Metals Exchange, an online bullion exchange, explained. “When you get a gold IRA, it should be gold bullion valued solely for its metal as opposed to some special markup pricing.”

Here are other common features to understand as you compare and choose a gold IRA company:

• Minimum investments: Most companies require at least $10,000 to invest in gold IRAs, but some minimums may be as high as $50,000. If you have less than this, consider saving longer and transferring your investments when you reach the thresholds.
• Storage fees: These fees can be a percentage of your investment or a flat, annual fee of at least $100. If you want to mitigate costs here, ask if the gold is stored with other investors’ or individually — individual storage costs more.
• Set-up fees: These are one-time fees you pay when you open the account. Usually, they’re around $50, but it varies. Choose and compare gold IRA companies that have lower set-up fees without risking reputation or integrity.
• Spread: The market price is called the “spot price,” and the price the company is charging is called the “selling price.”  The difference between the two prices is called the “spread.” At purchase, the selling price will be slightly above the spot price, and at selling, it will be slightly below. “If the coins or bars are simply bullion and relatively close to that day’s spot price, it is likely a good company to work with for your gold or precious metals IRA,” Glawson said.
• Ongoing maintenance fees: Ask about any yearly costs for maintaining your account and compare them among gold IRA companies. Annual maintenance fees can be anywhere between $75 and $325.

You should also have a clear understanding of the company buyback policy since you will likely want to receive the funds at some point during your retirement. You don’t want a surprise in retirement and find out the spread on the buyback is outrageous, consuming all your profit.

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3. Verify gold IRA company legitimacy

To ensure your gold IRA company is legitimate, check online ConsumerAffairs reviews and the company’s history. You can look up the company on FINRA and at the Securities and Exchange Commission (SEC) for additional information on its regulatory history.

Avoid companies that cold-call you or employ high-pressure sales tactics. This is a sign of a disreputable company.

Glawson explained: “If the company has not been around for at least 10 years, how will you even know if they will be around when it’s time for you to cash out? Be sure the custodian of your gold IRA or precious metals IRA is legitimate.

“If the gold IRA company calls you constantly, emails you constantly, and makes everything high-pressure due to time sensitivity or other factors, it is also likely a bad company.”

Confirm that the company is following the IRS guidelines. For example, the gold must be stored in an IRS-approved storage facility; otherwise, it will be considered a distribution from your IRA and may incur taxes and penalties.  Always verify the custodian’s IRS approval directly through IRS.gov or ask for the list of approved custodians.

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4. Open your gold IRA account and monitor performance

Once you’ve chosen your gold IRA company, you’ll likely need to choose a custodian for your gold. You are not allowed to store the gold at home, but must choose an IRS-approved depository. The company will likely suggest a custodian that it already works with.

Next, you’ll need to add funds to your IRA. If you are rolling over an existing retirement account, work with the gold IRA company and your existing IRA brokerage to facilitate the transfer. The gold IRA company should have a streamlined process for this.

Lastly, you’ll need to choose your gold. Avoid gold that is for collectors, such as collector coins, as these have a larger spread than gold bullion that is held simply for the value of the gold itself.

Note that gold IRA companies do not have to follow fiduciary rules. If you are unsure of what type of gold to buy, consult a financial planner who is bound by law to give you the best advice for your particular situation.