How a Gold IRA Works Step by Step
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Short on time? The essentials
- A gold IRA runs on the same six steps every time: open a self-directed IRA, fund it, buy IRA-approved metal, ship it to an IRS-approved depository, then hold or take distribution.
- Money flows custodian to dealer to depository. The account owner never handles the metal or the cash.
- Contribution limits for 2026 are 7,500 dollars, and 8,600 dollars at age 50 or older. Rollovers and trustee-to-trustee transfers are not capped.
- Only bullion meeting IRC 408(m)(3) fineness qualifies: gold .995, silver .999, platinum .9995, palladium .9995. American Gold Eagle and American Silver Eagle are statutory exceptions.
- Home storage is not allowed. The 2021 McNulty v. Commissioner Tax Court case confirmed that keeping IRA metal at home creates a full taxable distribution.
- Texas has no state income tax on IRA distributions. The federal 10 percent early-withdrawal penalty before age 59 and a half still applies.
- The Texas Bullion Depository in Leander accepts IRA assets through Lone Star Tangible Assets, currently coordinated by Equity Trust Company as the first participating custodian.
On this page
- The four actors in a gold IRA
- The six steps of a gold IRA, in order
- How long each step typically takes
- How the money and metal actually move
- The Texas angle inside the same steps
- Estimate the rollover eligibility on your account
- Worked example: a 62-year-old Dallas rollover
- How a gold IRA works at distribution
- When following these steps is a bad idea
- Frequently asked questions
The four actors in a gold IRA
Before the six steps make sense, name the four parties. A gold IRA is not a single product. It is a sequence coordinated by four separate businesses, each with a defined job.
The self-directed IRA custodian is the legal owner of the account for administrative purposes. Common names include Equity Trust Company, STRATA Trust Company, and GoldStar Trust Company. The custodian holds the cash, issues tax reporting, and pays the dealer for the metal.
The precious-metals dealer sources the bullion or coins. The dealer must sell only products that meet the IRA fineness rules under IRC Section 408(m)(3). The dealer sends an invoice to the custodian, never a bill to you.
The IRS-approved depository holds the metal in a vault. It must be a bank, a federally insured trust company, or an IRS-approved non-bank trustee. Delaware Depository, Brinks, IDS, CNT, and the state-run Texas Bullion Depository are common names.
The IRA owner is you. You choose the custodian, dealer, and depository. You sign the purchase order and the storage election. You cannot touch the cash inside the IRA or the metal at any point, or the IRS treats the whole account as distributed.
The six steps of a gold IRA, in order
Every gold IRA follows the same federal sequence regardless of state. Provider names change; the shape does not. The Texas-specific details show up at Step 4 (storage election) and Step 6 (distribution), not in the underlying flow.
- Step 1: Open a self-directed IRA. Choose a self-directed IRA custodian or an IRS-approved non-bank trustee that supports precious metals. Complete the account application and beneficiary form. The custodian issues an account number and a set of standing instructions for future purchases.
- Step 2: Fund the account. Move money in by direct rollover from a former-employer 401(k), 403(b), 457(b), or TSP. A trustee-to-trustee transfer from another IRA or a pension lump sum also works. Fresh annual contributions are capped at 7,500 dollars in 2026, or 8,600 dollars at age 50 or older.
- Step 3: Choose the metals and sign the purchase order. Work with an IRA-approved dealer to select bullion or coins meeting the fineness rules. Sign a metals purchase order that names the products, quantity, and delivery depository. The dealer sends the invoice to the custodian.
- Step 4: Pick the depository. Elect where the metal will be vaulted. Options include Delaware Depository in Wilmington, Brinks with vaults in Salt Lake City and Los Angeles, IDS with locations in Texas and Delaware, CNT in Massachusetts, or the state-run Texas Bullion Depository in Leander through Lone Star Tangible Assets.
- Step 5: The custodian pays and the dealer ships. The custodian releases cash from the IRA to the dealer. The dealer ships the metal insured and direct to the depository, never to your address. The depository logs the shipment, and the custodian books the metal as an IRA holding.
- Step 6: Hold, sell inside, or take distribution. Inside the IRA you can sit on the metal or sell it back through a dealer. At distribution age you receive a cash payout or an in-kind delivery of the physical metal, taxed under the rules of your account type.
The order is not optional. Trying to buy metal before the account is funded, ship it to your home, or pay the dealer directly turns the whole operation into a taxable distribution.
How long each step typically takes
The whole sequence usually runs three to six weeks from first phone call to metal in the vault. The custodian side is fast; the funding step is the pacing item. A direct 401(k) rollover clears in two to three weeks in most cases; a mailed check rollover can add another week.
| Step | Typical duration | What triggers the next step |
|---|---|---|
| Step 1: Open the account | 1 to 3 business days | Signed application and identity verification cleared |
| Step 2: Fund the account | 3 to 15 business days | Funds settle in the new IRA cash account |
| Step 3: Sign the purchase order | Same day | Custodian receives signed order and dealer invoice |
| Step 4: Pick and confirm the depository | Same day | Storage election signed and on file with the custodian |
| Step 5: Payment and shipping | 2 to 5 business days | Dealer confirms shipment and depository logs receipt |
| Total: first call to vaulted metal | 3 to 6 weeks (typical) | Depository issues an inventory statement |
Sourced from public onboarding descriptions at Equity Trust Company, STRATA Trust Company, GoldStar Trust Company, and the Texas Bullion Depository. Actual timing depends on the funding method and the delivering plan administrator. Checked June 2026.
Two things stretch the timeline. An indirect (60-day) rollover from a workplace plan triggers a mandatory 20 percent federal withholding and requires you to redeposit the full pre-tax amount within 60 days. A partial in-service withdrawal from an active 401(k) plan may not be allowed at all, depending on plan rules.
How the money and metal actually move
The custodian is the only party that touches the IRA cash. That is by federal design. The IRA owner cannot receive the funds and cannot take physical delivery of the metal before distribution.
On the money side, the flow runs: employer plan or old IRA to the new self-directed IRA cash account, then custodian to dealer by wire or ACH. On the metal side, the flow runs: dealer vault to the depository vault, with insurance in transit, direct and logged.
The chart below shows the 2026 contribution ceilings that cap the fresh-money path. Rollover and transfer funding is separate and uncapped, which is why most gold IRAs are funded by moving existing retirement money.
The invoice, wire, and shipping steps typically clear together inside a few business days once the metal is chosen. That is the fast part. The slow part is the funding wire from the old plan.
The Texas angle inside the same steps
The six-step process is federal. Two Texas-specific details change what happens at the edges of the sequence, not the sequence itself. Both are worth surfacing honestly rather than hyping.
First, Texas has no state personal income tax. Article 8, Section 24 of the Texas Constitution prohibits one. That means Step 6 (distribution) is federally taxed only, without a state layer. A required minimum distribution at age 73 or 75 hits your federal ordinary income bracket and stops there.
Second, Step 4 (choose the depository) has a Texas-only option. The Texas Bullion Depository is an agency of the State of Texas, authorized by House Bill 483 signed by Governor Greg Abbott on June 12, 2015, and operating since 2017 in Leander, north of Austin.
For IRA storage specifically, the depository operator Lone Star Tangible Assets received IRS non-bank trustee approval in 2023. That approval is what allows the vault to hold IRA-titled metal directly. Equity Trust Company is the first participating self-directed IRA custodian, and a gold dealer that works with Equity Trust coordinates the setup with the depository.
Storage fees for IRA assets at the Texas Bullion Depository are typically negotiated between the custodian, the dealer, and Lone Star Tangible Assets. The public schedule on the depository website may not match the IRA-specific rate. Confirm current pricing directly with your dealer before signing. Source: texasbulliondepository.gov, checked June 2026.
Estimate the rollover eligibility on your account
Step 2 depends on where your existing retirement money sits. Not every account is rollover-eligible today. An active-employer 401(k) is usually locked until separation, age 59 and a half, or another qualifying event. The screening tool below runs through the eligibility rules on the account you already have.
Can you roll your account into a gold IRA? Eligibility checker
Most retirement money can move into a gold IRA once it is an eligible rollover distribution. Pick your account and situation for a general answer. Always confirm the specifics with your plan administrator or custodian.
General guidance only, not tax or financial advice. Eligibility depends on your specific plan document and IRS rules; confirm with your plan administrator and a tax advisor. A direct trustee-to-trustee transfer avoids the 60-day rule and 20% withholding.
This is a screening tool, not personalized advice. Confirm the specific rollover rules with your plan administrator and a tax professional before initiating paperwork.
Worked example: a 62-year-old Dallas rollover
How a gold IRA works at distribution
Step 6 is where the shape of the account matters most. A traditional IRA taxes the distribution as ordinary federal income in the year it hits your hand. A Roth IRA passes qualified distributions tax-free.
At age 73 (for those born 1951 to 1959) or age 75 (born 1960 or later), a traditional IRA owner must take a required minimum distribution each year. The RMD amount is a fraction of the balance defined by the IRS Uniform Lifetime Table. Missing an RMD triggers a federal excise tax on the shortfall.
Distribution can be cash or in-kind. A cash distribution requires selling metal inside the IRA first: the dealer buys the metal back, the custodian keeps the cash inside the IRA, and the requested amount then goes to you. An in-kind distribution ships the physical metal to your address; the fair market value of the shipped metal is the taxable amount on that date.
Before age 59 and a half, any distribution generally adds a 10 percent federal penalty on top of ordinary federal income tax. Narrow exceptions exist: first-home purchase up to 10,000 dollars, qualified higher education, unreimbursed medical above the threshold, disability, birth or adoption up to 5,000 dollars, and substantially equal periodic payments under IRC 72(t).
When following these steps is a bad idea
The six-step process runs the same way for every account, but the process fits some retirees better than others. When it backfires the pattern is consistent. We list the cases below with no call to action attached.
The balance is too small for the fixed fees. A 10,000 dollar gold IRA carrying a 200 dollar custodian fee and a 150 dollar storage fee pays about 3.5 percent per year in fixed costs before any dealer markup. A brokerage IRA holding a gold ETF is usually cheaper at that size.
You need the money in five years or less. Selling metal back to a dealer takes days, the buyback spread costs money, and a soft market can force a bad exit. If the money is retirement-adjacent rather than retirement, an IRA wrapper adds friction without much tax benefit.
You already hold a large personal gold position. A gold IRA on top of a big personal stack does not add diversification, just concentration. A fee-only fiduciary can size the exposure before you add more.
You want physical possession of the metal. An IRA cannot hold metal at home. If custody matters more than the tax wrapper, a direct cash purchase from a Texas dealer is a different product, with different tax treatment.
The dealer is pushing premium or proof coins. Wide markups on graded or exclusive coins are the most common way a gold IRA underperforms the underlying metal. Common bullion coins and generic bars match the IRA structure better.
The rollover source is an active-employer 401(k). Most plans do not allow an in-service rollover until separation, age 59 and a half, or another qualifying event. Trying to force the sequence at Step 2 usually stalls the account before it is funded.
You cannot afford to leave the money untouched until 59 and a half. Early distributions add a 10 percent federal penalty on top of ordinary federal income tax, unless a narrow exception applies. Texas removes the state layer but not the federal stack.
Frequently asked questions
How does a gold IRA work in one sentence?
A gold IRA is a self-directed IRA whose investments are IRS-approved physical precious metals, held by a qualified custodian at an approved depository, following the same federal contribution, distribution, and tax rules as any traditional or Roth IRA.
Do I ever touch the metal or the cash?
No. The custodian handles all cash inside the IRA and the depository holds the metal. Touching either one before Step 6 (distribution) turns the whole IRA into a taxable event. The 2021 McNulty v. Commissioner Tax Court case confirmed that home storage of IRA metal triggers a full taxable distribution.
How long does the full six-step process take?
Three to six weeks is typical from first phone call to metal in the vault, with funding as the pacing item. A direct 401(k) rollover clears in about two to three weeks; a trustee-to-trustee IRA transfer often faster; a mailed check rollover can add another week.
What is the minimum to open a gold IRA?
The IRS sets no minimum. Custodians and dealers set their own thresholds, typically 5,000 to 50,000 dollars depending on the provider. Below 10,000 dollars the fixed fees become a meaningful drag on the balance.
Can I use the Texas Bullion Depository for Step 4?
Yes. The Texas Bullion Depository accepts IRA assets through its operator Lone Star Tangible Assets, which received IRS non-bank trustee approval in 2023. Equity Trust Company is the first participating self-directed IRA custodian. Confirm the current process and IRA-specific fees directly with the depository or your dealer. Source: texasbulliondepository.gov, checked June 2026.
What is the difference between a direct rollover and an indirect rollover at Step 2?
A direct rollover moves the money trustee-to-trustee with no withholding and no 60-day clock. An indirect rollover pays you first. It triggers a mandatory 20 percent federal withholding on pre-tax funds from a workplace plan. You must redeposit the full pre-tax amount into the new IRA within 60 days, or the shortfall counts as a distribution.
Are American Gold Eagles really allowed inside the IRA at 91.67 percent purity?
Yes. IRC 408(m)(3) sets a 99.5 percent gold fineness floor, but the statute names the American Gold Eagle and American Silver Eagle as explicit exceptions. Both are IRA-eligible by law even though the Gold Eagle is 22-karat.
Does Texas tax my gold IRA at distribution?
No. Texas has no state personal income tax under Article 8, Section 24 of the Texas Constitution. Federal ordinary income tax and the 10 percent federal early-withdrawal penalty (if you are under 59 and a half and no exception applies) still apply.
Sources
- Internal Revenue Service. Publication 590-A: Contributions to Individual Retirement Arrangements (IRAs). irs.gov/publications/p590a. Checked June 2026.
- Internal Revenue Service. Publication 590-B: Distributions from Individual Retirement Arrangements (IRAs). irs.gov/publications/p590b. Checked June 2026.
- Internal Revenue Service. Retirement Topics: IRA Contribution Limits. irs.gov/retirement-plans. Checked June 2026.
- Internal Revenue Service. Topic No. 558, Additional Tax on Early Distributions from Retirement Plans. irs.gov/taxtopics/tc558. Checked June 2026.
- Internal Revenue Code Section 408(m). Collectibles rule and bullion exception. Office of the Law Revision Counsel. uscode.house.gov. Checked June 2026.
- Texas Bullion Depository. IRA Storage Services. texasbulliondepository.gov/ira-storage. Checked June 2026.
- Office of the Texas Comptroller of Public Accounts. Texas Bullion Depository overview. comptroller.texas.gov. Checked June 2026.
- Texas Legislature. House Bill 483, 84th Regular Session (2015), Texas Bullion Depository Act. capitol.texas.gov. Checked June 2026.
- United States Tax Court. McNulty v. Commissioner, 157 T.C. No. 10 (November 18, 2021). Home-storage IRA triggered a full taxable distribution.
- Texas Constitution, Article 8, Section 24. State personal income tax prohibition. statutes.capitol.texas.gov. Checked June 2026.