If you are looking to add gold to your retirement accounts, it must be done according to IRS regulations in order to earn the tax benefits and avoid unnecessary fees. You must hold gold in a SDIRA (self directed ira). This is something that any gold IRA company can assist you with in addition to helping you choose an approved depository, which is the first of the gold IRA fees you’ll have to keep in mind.
Having gone through this somewhat confusing process myself, I figured it was best to create a full guide so I can walk potential investors through the expected transaction fees that you’ll encounter when opening a gold IRA.
Costs Associated With This IRA Account
Expect your fees to come from four main components of holding physical precious metals in your IRA account: set up process, maintenance fees, storage fees, and withdrawals.
Let’s discuss each of them in specifics.
Setup fees
It’s not uncommon to have a one-time setup fee for opening a self directed ira, which is mandatory to hold precious metals and other assets if you choose to explore investments like private equity, cryptocurrency, and even real estate.
Expect your setup fees to range from $50 to $150. Some precious metals IRA companies will call this an application fee, while some will offer to waive it entirely if you invest a certain amount of money into any of the precious metals they offer.
My Advice: It’s smart to request a free gold IRA kit from a few vendors and ask them about current promotions and bonuses.
Account Maintenance & Administrative Fees
Once your precious metals IRA is established, you’ll be required to choose a gold IRA account custodian to be the liaison between you and your investments. This custodian will come with a separate fee to cover this requirement and maintain records for the IRS.
The fees associated with custodianship range from an annual fee that can start at $200 yearly.
My Advice: I highly encourage you to understand the fee structure of several companies before settling on a custodian. I chose Equity Trust Company for complete transparency.
Gold IRA Storage Fees
Holding physical precious metals at home negates your tax advantaged retirement accounts entire purpose. Do not store your precious metals at home under any circumstance!
You’ll be prompted to select an approved depository and there will be storage fees. Again, for transparency, my gold IRA storage is at the Texas Depository.
Several factors come into play when deciding gold IRA storage fees, including:
- The IRA Custodian
- The Depository
- Your Account Value
- Segregated or Non-Segregated storage
For the most cost effective gold storage, consider having your gold or other precious metals with other investors holdings. This is called commingled storage. If you want to pay more and have your gold segregated, that’s an option as well that has slightly higher fees.
My Advice: having gone through this many years ago, I found that some custodians will charge different fees for the exact same depository. For this reason I really encourage you to understand all transaction fees before making a decision on which custodian you choose.
Transaction Fees
While most companies don’t charge a nickel to purchase, liquidate, or trade precious metals, I found that it’s very common to have a transaction fee when buying or selling physical gold.
I’ve seen fees range from free, to $40, to up to $95 to perform any exchange of precious metals.
Miscellaneous Fees
There’s a laundry list of additional fees you could run into when starting a precious metals IRA. This is why I publish this information – because it can be hidden sometimes and I really urge you to ask these questions about each of these potential fees before moving forward.
Insurance fees
There may be a separate fee to insure your precious metals. This is not to be confused with storage fees.
Shipping
While some gold IRA firms offer free shipping, some do charge for the shipment to and from your chosen depository.
Audit
Some precious metals IRA custodians will require an audit to confirm their condition and existence in the depository.
Account Liquidation
If you decide to liquidate your holdings in your IRA account, you may be required to pay liquidation fees.
Wire Transfer Fee
When you send or receive funds via wire transfer you could incur a small fee.
There are other very miscellaneous fees that I won’t delve into fully, that range from a fee to get a paper statement (I get mine electronically), late payment penalties, to closing your account, and not maintaining a minimum balance. All of these are similar to how banks operate and almost never come into play for most investors.
Understand That Fees Vary by Provider
Just like banks and other investment accounts you may work with, you can see that gold IRA fees are not entirely in sync. Each precious metals IRA custodian will have different fees. No matter which company you choose to work with, these are the standard fee’s you’ll have to pay.
- Application fee – (However – Augusta Precious Metals fees can be waived up to 10 years.
- Annual fees
- Storage fees
- Transaction fees
- Liquidation fees
How to Minimize Fees When Buying Precious Metals
While you won’t be able to get a gold IRA without any fees, here is some advice on how to make sure you don’t overpay for your gold IRA.
1) Interview many companies
I have a curated list of the best gold IRA companies. Go through that list and request a kit from each company and compare costs. Ask them which custodians they work with and get a written list of their fee schedules.
2) Go line by line and do the math
Some companies may waive certain fees or have an incredibly low price for one component, only to have a higher fee somewhere else that makes up for it.
3) Understand fees of each depository
You have a say in which depository you use. Understand all of their fees prior to selecting one.
4) Consider Your Investment Strategy
If you anticipate being highly transactional, you’ll want to avoid a company that has higher transaction fees. On the contrary, if you are simply moving some of your retirement accounts to a long term position in gold and silver, you will want to look at a company with low annual fees and low cost storage.
In Summary
Just like any other investment you can make using your retirement savings, you’ll incur fees while setting up a gold IRA. Starting with gold IRA companies and the fee’s you’ll incur buying precious metals, and going down the line through storage fees, transaction fees, and potential audits, know that there is are costs associated with having such an investment.
Having gone through this process as a long time gold stacker, I can speak from personal experience that even when you add up all of these fees it’s less than you’ll pay someone to manage your retirement accounts but with the same tax benefits.
