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What does a gold IRA cost to start and maintain?
With more and more investors looking to protect their retirement savings from out of control spending, raging inflation and a coming economic recession or collapse, interest in gold individual retirement accounts has skyrocketed. And if you’re interested in precious metals to protect your retirement assets, you’ll naturally want to know what a gold IRA costs and fees.
Below we’ll cover everything you need to know about gold IRA fees including…
- What it costs to set up a new gold IRA
- Gold IRA storage fees for precious metals
- Annual fees to maintain a gold IRA account
- How gold dealer commissions work
- Why free gold IRA fees are a scam
- And much more…
Custodial Gold IRA Cost: Fixed Cost Vs Sliding Scale
When it comes to custodian fees for financial accounts such as IRAs, two common structures are sliding scale fees and fixed rate fees. Understanding the differences between these fee structures is important for investors, as it can impact the overall cost of maintaining their accounts.
Sliding Scale Fees: This type of fee structure is variable and depends on the size of the account. With sliding scale fees, the amount you pay as a fee increases as the value of your account grows. For instance, an account with a higher balance might incur a higher percentage fee compared to an account with a lower balance. This method is often used by custodians who offer additional services or personalized management for larger accounts. The rationale is that managing larger accounts often requires more resources and oversight. However, for investors, this means that as their investment grows so do their fees, which can potentially eat into their returns over time.
Fixed Rate Fees: On the other hand, a fixed rate fee structure charges a set fee regardless of the account size. This means whether your account has $10,000 or $100,000 the custodial fee remains the same. Fixed rate fees are often preferred by investors who want predictable costs. This model can be particularly advantageous for larger accounts, as the fee doesn’t scale with the size of the account. However, for smaller accounts, a fixed fee can represent a higher percentage of the account value which might be less cost-effective compared to a sliding scale fee.
In summary, sliding scale fees change with the account size potentially making them more expensive for larger accounts, but possibly more affordable for smaller ones. Fixed rate fees remain constant, offering predictability and potential savings for larger accounts, but can be relatively more costly for smaller account balances. The choice between these two fee structures largely depends on the individual investor’s account size, growth expectations, and preference for cost predictability versus scaled management costs.
Setup Fees for a Self Directed IRA
In order to open a gold IRA, you’ll need to establish a self-directed IRA with a custodian that permits you to hold physical gold, silver and other precious metals. Once complete, you can transfer an existing retirement account to your new IRA account and purchase gold.
Typical setup fees will range from $50 -$100. Strata Trust, our preferred IRA custodian, has a setup fee of just $50 to establish gold IRAs.
Your setup fee can be deducted from the proceeds of your IRA accounts. Or you can pay them out of pocket.
*Note: We prefer Strata Trust over other IRA custodians (although we’re approved to work with all of them) because they are one of only a few that have flat fees for precious metals storage and are among the most cost effective.
Transaction Fees for Gold Purchases
Once your new self directed IRA has been established and funded, you can purchase gold and/or silver coins or bars. The transaction fees to purchase gold with Strata Trust is $100 which include $40 for gold purchases, $25 for precious metals handling and a $35 wire fee to wire funds to your gold dealer.
Other self directed IRA custodians charge transaction fees between $100 to $195.
Gold IRA Storage Fees
Gold IRA custodians will have one of two fee structures for precious metals storage. The first and most cost effective is a flat fee regardless of the value of your account. And as mentioned above, there are only a few gold IRA custodians that offer the flat fee structure, Strata Trust being one of them.
They charge a flat fee of $100 per year for commingled storage and insurance or $150 per year for segregated storage and insurance. Both secure storage options are available at the Delaware Depository Service Company located in either Delaware or Nevada. (Segregated storage is not available for silver coins or bars at the Delaware Depository.)
Strata Trust also offers segregated secure storage at the Texas Precious Metals Depository for $150 per year.
Visit our gold IRA storage options page for more information on commingled versus segregated storage options and different locations available.
The second type of fee structure is a sliding scale based on the value of your physical precious metals. An IRA custodian will typically have minimum storage fees between $100 – $150 per year. Then accounts valued at a certain amount will be charged storage fees anywhere from .70 – $2 per $1,000 of precious metals stored. Depending on what your account’s value is at, flat gold IRA fees tend to be more cost effective.
*Note: The IRS specifies eligible precious metals for retirement accounts. Gold American Eagle and Silver American Eagles are the most commonly acquired gold and silver coins in IRA accounts. Collectible coins are not permitted.
How Gold Dealer Commissions Work
Gold IRA companies make their money based on a buy/sell spread. The spread is the difference between what an item sells for and will be bought back for in that same moment. In simple terms, the spread is what the transaction costs you.
For example, if a gold IRA company acquires gold coins for $2,000 per and sells them to you for $2,100 per, the spread was 5%.
Most gold IRA companies don’t want you to know what the buy/sell spread is. In fact, if you ask them about it, they’ll typically squirm. The reason being is many gold IRA providers charge outrageous spreads.
Some of the biggest culprits are deemed the “Best Gold IRA Companies” by paid affiliates. Meaning the gold IRA companies pay commissions out of your retirement account to the websites that “rate” them the “Best Gold IRA Companies”.
On average, you can lose between 3-6% of the value of your individual retirement account by using one of these firms. And here’s a hint for you, they’re typically located in Southern California. And they’ll generally charge you a spread anywhere from 33%-65% of the value on your existing retirement account.
If you are already in the process of setting up a gold IRA with one of these companies, call the Certified Gold Exchange (CGE) IRA desk at 800-300-0715 so you’re not the next victim.
Annual Fees Charged by Self Directed IRA Custodians
Once your new gold IRA has been established and you’ve purchased your precious metals, each year thereafter you’ll have annual account maintenance and storage fees for your IRA account.
Strata Trust charges annual account maintenance fees of $125 and $100 for commingled storage at the Delaware Depository, for a total of $225. Other custodians charge between $250 and $650 for total annual account fees. A few will even charge annual fees based on your account’s value.
Why Free Gold IRA Fees are a Scam
Free gold IRA fees don’t exist. If a gold IRA company is promoting free account fees if you open a gold IRA with them, beware, because they’re going to overcharge, and typically by a lot.
All self directed IRA custodians have a set up fee, transaction fees and storage fees. If a gold IRA company offers you free fees, it’s simply to entice you to choose them. They’re going to pay the fees out of the outrageous commissions they make by selling you overpriced coins.
If you’re currently in the gold IRA rollover process with a company that has offered you free fees, call CGE at 800-300-0715 before you get scalped.
Precious Metals Shipping Fees
Most gold IRA companies will cover the cost to ship your precious metals to the Delaware Depository or another depository of choice.
But if you’re liquidating physical gold coins or other precious metals, you may have to pay the shipping fees to send your metal to your gold dealer. These fees will vary depending on the carrier they use.
Another instance when you may have to pay shipping fees is if you take a distribution of physical precious metals from your gold IRA. Many gold IRA investors choose to take their Required Minimum Distributions in the form of physical gold rather than cash. This entails shipping a portion of your precious metals to your home to satisfy your RMD. Your IRA custodian will provide you with a quote for what your shipping will cost. You can then pay that over the phone.
*Note: CGE maintains accounts at the Delaware Depository in both Delaware and Nevada. Therefore, if your precious metals are stored at either of these locations, you won’t have to pay shipping charges when liquidating because the custodian will simply move your precious metals from your account at the depository over to ours, internally.
Gold IRA Seller Fees
At some point, you’ll most likely liquidate the precious metals in your gold IRA account. If your physical gold or silver coins are stored at the Delaware Depository, you won’t be responsible for any shipping fees if you’re selling back to us.
Your IRA custodian will charge you transaction fees of $40 for processing the sale. If you want to take a cash distribution, they’ll wire you the funds for an additional $35. Or you can elect to receive an ACH payment which is free.
If you’re transferring your IRA account to another custodian, there aren’t any fees.
Frequently Asked Questions (FAQs)
Are there termination fees to close gold IRAs?
Yes. If you move your traditional IRA or Roth IRA to another custodian and close your account, there will be a termination fee of $250 with Strata Trust. If you liquidate your gold IRA and take a complete distribution and close the account, there will also be a termination fee.
Are gold IRA setup fees tax deductible?
Yes.
Are there any tax benefits to having gold IRAs?
Gold IRAs have the same tax benefits as Traditional IRAs. You can buy and sell physical gold and other precious metals within your account without any tax consequences. You’ll only have to pay taxes when you take a distribution from your gold IRA. If you have a Roth IRA and have had the account over 5 years and are over 59.5, you can withdraw from your gold IRA without paying taxes.
Can I convert a traditional gold IRA to a Roth gold IRA?
Yes. If you have a traditional gold IRA, you can convert it to a Roth IRA.
How can I find out who the top gold IRA companies are?
If you search “Top Gold IRA Companies” or “Best Gold IRA Companies”, you’re going to get flooded with affiliate marketing sites that make money to write supposedly “independent” reviews about the companies they’re promoting.
You want to make sure the gold IRA company you’re working with has a stellar reputation, with zero complaints at the Better Business Bureau and Google.
CGE is one of those companies. We’re a family run business with over 30 years experience and perfect reputation. View our Google reviews to see what our clients have to say about us.
Do gold IRAs have account minimums?
Not with the custodians. But the gold IRA fees may be cost prohibitive if you’re investing a small amount. Most gold IRA companies will have account minimums.
Does CGE have a minimum investment requirement for gold IRAs?
Yes. CGE is a large volume discount dealer and typically maintains a minimum investment requirement of $20,000. But regardless of our account minimums, you can still reach out to us at 800-300-0715, and we’ll help in any way we can.
If I combine a traditional IRA with other IRA accounts, are there more fees?
No. You can combine as many traditional IRA accounts as you’d like into a self directed IRA with no additional fees.
How do I pay my gold IRA fees each year?
You can pay your account fees over the telephone or put a credit card on file to be automatically debited annually.
To learn more about gold IRA cost and fees, contact the Certified Gold Exchange today at 800-300-0715.
Written by Pat Collins and John Halloran
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