How to Convert an IRA to Gold & Silver

IRAs can hold paper metals or real bullion.

IRAs can hold paper metals or real bullion.

Putting your individual retirement arrangement into gold and silver can be a relatively straightforward process. If your IRA allows you the ability to choose the stocks, bonds and funds in it, you can choose investments that are similar to owning physical gold and silver. However, you can also roll over your IRA into physical gold and silver, although that process is a bit more complicated.

Paper Metals

IRAs that let you choose your own stocks make it relatively simple for you to convert your holdings into paper equivalents for precious metals. For example, you can buy an interest in silver and gold by buying stock in mining companies whose prices fluctuate with values of the metals. Alternatively, you could purchase an exchange-traded fund that owns nothing but silver or gold, making a share of the fund equivalent to a piece of their precious metals holding.

Self-Directed IRAs

If you want real, physical gold and silver in your IRA, you'll have to set up a special self-directed IRA account. Self-directed IRAs are special IRA accounts that give you more choices of what you can own than a traditional account. Among other things, you can place physical precious metals -- like gold, silver, platinum and palladium -- in your self-directed IRA if you follow IRS rules.

Rolling Over Funds

To move your IRA money into physical gold and silver, you need to roll the funds over from your traditional IRA into your self-directed IRA. The IRS lets you roll over IRA funds once in every 12-month period. As long as your money goes from the first IRA account to the second IRA account within 60 days, you won't have to pay any taxes or penalties on the transfer.

Buying Your Bullion

When your self-directed IRA is funded, you can buy your gold and and silver with it. Contact a reputable dealer and let him know that you're buying precious metals for your IRA. Your IRA custodian will send him the money, and he will ship your bullion directly to your custodian's depository; the IRS won't let you hold onto your own metals. Also, you can only buy pure bullion or a limited selection of bullion coins, including American Eagles and Canadian Maple Leafs.

About the Author

Steve Lander has been a writer since 1996, with experience in the fields of financial services, real estate and technology. His work has appeared in trade publications such as the "Minnesota Real Estate Journal" and "Minnesota Multi-Housing Association Advocate." Lander holds a Bachelor of Arts in political science from Columbia University.

Photo Credits

  • Comstock/Comstock/Getty Images