What Is a Gold IRA and How Does It Work
Affiliate disclosure: we may earn a commission when a reader opens an account through links on this page. The commission has no effect on what you pay or on what we publish. We are not a financial or tax advisor; consult a licensed advisor for your situation. Last reviewed June 2026.
Short on time? The essentials
- A gold IRA is a self-directed IRA whose investments are physical precious metals, held by a qualified custodian at an approved depository.
- IRA-approved metals meet IRC 408(m)(3): gold .995, silver .999, platinum .9995, palladium .9995 fineness. American Gold Eagle and American Silver Eagle are statutory exceptions.
- You cannot store IRA gold at home. The 2021 McNulty v. Commissioner decision confirmed that home storage triggers a full taxable distribution.
- Federal contribution limits for 2026: 7,500 dollars standard, plus 1,100 dollars catch-up at age 50 or older.
- Required minimum distributions begin at age 73 if you were born between 1951 and 1959, and at age 75 if you were born in 1960 or later.
- Texas has no state personal income tax, so any taxable IRA distribution is federally taxed only.
- The Texas Bullion Depository in Leander accepts IRA metal through Lone Star Tangible Assets, the only state-administered precious-metals depository in the United States.
On this page
- What a gold IRA actually is
- How a gold IRA works step by step
- Which metals qualify for an IRA
- Where the metal is stored (and the Texas option)
- What a gold IRA costs each year
- Estimate the fee drag on your balance
- How a gold IRA is taxed (the Texas angle)
- Gold IRA vs traditional IRA vs physical gold
- Worked example: a 60-year-old Austin investor
- When a gold IRA is a bad idea
- Frequently asked questions
What a gold IRA actually is
A gold IRA is not a separate tax category. The IRS does not publish a document called “Gold IRA Rules.” What people call a gold IRA is a self-directed individual retirement account whose holdings happen to be physical precious metals.
Every gold IRA combines four parts. A self-directed IRA at a qualified custodian or non-bank trustee. A precious-metals dealer that sells IRS-approved bullion or coins. An IRS-approved depository that holds the metal in a vault. And the same federal IRA rules that govern any traditional or Roth account.
The IRS does not let you store the metal at home or in a personal safe deposit box. The metal must be titled to the IRA, held by the custodian, and vaulted at an approved depository. The 2021 Tax Court ruling in McNulty v. Commissioner confirmed that any deviation triggers a full taxable distribution.
A gold IRA can be traditional (pre-tax contributions, taxable distributions), Roth (after-tax contributions, tax-free qualified distributions), SEP (for the self-employed), or SIMPLE (small-employer plan). The tax type follows the original account; the metal sits inside it as the investment.
How a gold IRA works step by step
Every gold IRA follows the same federal sequence regardless of state. The names of the providers change. The shape of the process does not.
- Open a self-directed IRA. A precious-metals IRA must sit with a self-directed IRA custodian or an IRS-approved non-bank trustee. Common names include Equity Trust Company, STRATA Trust Company, and GoldStar Trust Company.
- Fund the account. Money arrives by annual contribution (limited to 7,500 dollars in 2026, plus 1,100 dollars at age 50 or older), trustee-to-trustee transfer from another IRA, or rollover from a 401(k), 403(b), 457(b), TSP, or pension lump sum.
- Choose the dealer and the metals. The dealer sells IRA-approved bullion or coins. You sign a purchase order; the dealer invoices the custodian; the custodian releases cash from your IRA to pay for the metal.
- Pick the depository. Specify where the metal is to be stored: a private vault such as Delaware Depository, Brinks, or IDS, or the state-run Texas Bullion Depository in Leander through Lone Star Tangible Assets.
- The dealer ships the metal. The dealer ships direct to the depository, never to you. The custodian books the metal as an IRA holding. You receive a confirmation and an inventory line on your next statement.
- Hold, sell, or take distribution at retirement. Inside the IRA you can sell metal back to a dealer or hold it. At distribution age, you receive either a cash payout or an in-kind delivery of the physical metal.
Annual contributions are capped, but rollovers and trustee-to-trustee transfers from other retirement accounts are not. That is why most gold IRAs are funded by moving existing 401(k), IRA, or pension money rather than by writing fresh annual checks.
Which metals qualify for an IRA
The IRS bans collectibles inside an IRA under IRC Section 408(m). The same statute carves out an exception for bullion and certain coins that meet a fineness threshold. Below that line, the metal cannot sit inside the account.
Two coins are statutory exceptions inside that rule. The American Gold Eagle is IRA-eligible by name even though its purity is 91.67 percent, below the 99.5 percent gold floor. The American Silver Eagle receives the same statutory treatment.
Bars must come from a refiner or assayer approved by NYMEX, COMEX, LBMA, or be a product of a national government mint. Common eligible refiners include PAMP Suisse, Credit Suisse, Valcambi, the Royal Canadian Mint, and the Perth Mint.
Several common coins are not eligible. The South African Krugerrand sits at 91.67 percent gold with no statutory exception. Pre-1965 United States 90 percent silver coins miss the silver floor by a wide margin. Graded or numismatic coins held for collectible value are excluded under the collectibles rule.
Where the metal is stored (and the Texas option)
Once the dealer ships the metal, an IRS-approved depository takes custody. The IRA owner cannot take personal possession. The depository must be a bank, a federally insured trust company, or an IRS-approved non-bank trustee.
Texas residents have the same private depository options as any other state. Common names are Delaware Depository in Wilmington, Brinks Global Services with vaults in Salt Lake City and Los Angeles, International Depository Services with locations in Texas and Delaware, and CNT in Massachusetts.
The Texas-specific option is the Texas Bullion Depository, an agency of the State of Texas. It was authorized by House Bill 483, signed into law by Governor Greg Abbott on June 12, 2015. The depository began operations in 2017 with Lone Star Tangible Assets as the contractor.
The facility sits on a roughly 10-acre, purpose-built campus in Leander, Texas, just north of Austin. It accepts gold, silver, platinum, palladium, and rhodium for storage on behalf of individuals, businesses, and government entities. It is the only state-administered precious-metals depository in the United States.
For IRA assets the rule is specific. IRA metal must be held by a bank or an IRS-approved non-bank trustee. Lone Star Tangible Assets, the operator of the Texas Bullion Depository, holds IRA assets in that capacity. The practical setup is arranged through a self-directed IRA custodian that coordinates with Lone Star Tangible Assets. Verify the current IRA-storage process directly with the depository before signing. Source: texasbulliondepository.gov, checked June 2026.
What a gold IRA costs each year
A gold IRA carries fee categories you do not see on a regular brokerage IRA. Most of the cost lives in four places: account setup, annual custodian fees, annual storage fees, and the dealer markup on the metal itself.
| Fee | What it covers | How it is usually charged |
|---|---|---|
| Account setup | Opening the self-directed IRA at the custodian | One-time fee at account open |
| Annual custodian fee | Recordkeeping, tax reporting, statements | Flat annual fee or tiered by account size |
| Annual storage fee | Depository vault, insurance, audits | Flat annual fee, sometimes scaled by metal value |
| Dealer markup on metal | The spread between spot price and the price you pay | Embedded in the metal price; rarely itemized on the invoice |
| Wire and shipping fees | Funding wires, dealer-to-depository shipping | Per-event flat fee |
| Buyback spread | The gap between the dealer’s buy price and current spot | Only applies when you sell metal back |
Sourced from public fee schedules at Equity Trust Company, STRATA Trust Company, GoldStar Trust Company, and Delaware Depository. Confirm current pricing directly with each provider. Checked June 2026.
The dealer markup is the line item with the widest range. Common bullion coins such as the American Gold Eagle, Canadian Gold Maple Leaf, and generic gold bars carry tighter spreads. Premium or proof coins, marketed as exclusive or limited, carry markups that can run several times higher.
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 site may not match what an IRA account actually pays.
Estimate the fee drag on your balance
Annual fees look small in dollars and add up over time. The calculator below estimates the percentage drag fees create on a given balance. It is a screening tool, not personalized advice.
Texas gold IRA fee-drag calculator
Texas gold IRAs charge mostly flat dollar fees (setup, annual custodian, storage). Flat fees take a much bigger bite out of a small account than a large one. Enter your numbers to see the drag.
Estimate only. Fee amounts vary by provider and are often not published; enter figures you confirm in writing. This tool ignores metal price changes and the dealer spread, which also affect returns. Not financial advice.
How a gold IRA is taxed (the Texas angle)
Inside the IRA, the metal grows on the same tax basis as any other investment of its account type. Traditional IRA: contributions may be deductible; distributions are taxed as ordinary income. Roth IRA: contributions are after-tax; qualified distributions are tax-free.
Selling metal inside the IRA is not a taxable event. The cash from the sale stays in the IRA wrapper. Tax shows up only when money leaves the account through a distribution.
The collectibles tax matters here. A gain on physical gold held in a personal taxable account is taxed at the federal collectibles rate, currently capped at 28 percent. Inside an IRA, that rate does not apply. Traditional IRA distributions follow your ordinary income bracket; Roth qualified distributions are not taxed.
Texas adds one specific advantage. Article 8, Section 24 of the Texas Constitution prohibits a state personal income tax. Any taxable IRA distribution, whether a required minimum distribution at age 73 or 75, an early withdrawal, or a Roth conversion, is taxed by the IRS only. There is no Texas state layer on top.
The federal stack still applies. A withdrawal before age 59 and a half generally adds a 10 percent federal penalty on top of ordinary federal income tax. Common exceptions: first home up to 10,000 dollars, qualified higher education, disability, and substantially equal periodic payments under IRC 72(t).
Gold IRA vs traditional IRA vs physical gold
People often weigh three options when they think about retirement and gold: a gold IRA, a regular IRA holding gold ETFs, or simply buying physical gold and keeping it. The choice changes the tax wrapper, the storage, and the cost structure.
| Feature | Gold IRA (self-directed) | Traditional IRA (brokerage) | Physical gold (personal) |
|---|---|---|---|
| What it holds | IRS-approved bullion or coins | Stocks, bonds, ETFs (incl. gold ETFs) | Coins or bars in your possession |
| Tax wrapper | Traditional, Roth, SEP, or SIMPLE | Traditional, Roth, SEP, or SIMPLE | None; gains are taxable |
| Federal gain rate | Ordinary income (Traditional) or tax-free qualified (Roth) | Same as gold IRA | Collectibles rate capped at 28 percent on long-term gain |
| Where the metal lives | IRS-approved depository, never home | No physical metal held | Wherever you store it |
| Annual fees | Custodian + storage + dealer markup | Brokerage account fee (often zero) + ETF expense ratio | No account fees; insurance and storage if used |
| Contribution limit (2026) | 7,500 dollars (1,100 dollars catch-up at 50+) | 7,500 dollars (1,100 dollars catch-up at 50+) | No limit; not a retirement account |
| RMD rules | RMD at 73 or 75 (Traditional only) | RMD at 73 or 75 (Traditional only) | No RMD; not a retirement account |
| Texas state tax | None on distribution | None on distribution | Federal capital gains only |
Built from IRS Publications 590-A and 590-B, IRC Sections 408 and 1(h), and the Texas Constitution. Checked June 2026.
Worked example: a 60-year-old Austin investor
When a gold IRA is a bad idea
A gold IRA fits some retirees and not others. The pattern of accounts where it backfires is consistent. We list the cases here, with no call-to-action attached.
Small account balance. A 10,000 dollar IRA carrying a 200 dollar annual custodian fee plus a 150 dollar storage fee pays roughly 3.5 percent per year just to keep the lights on, before any dealer markup. Fee drag eats the gains.
Liquidity need inside five years. Physical metal in an IRA is liquid in theory and slower in practice. Selling back to the dealer takes days, the buyback spread costs money, and a forced sale during a soft market hurts.
Already over-concentrated in metals. If physical gold already represents a large share of your net worth, more gold inside an IRA may not add diversification. Talk to a fiduciary financial advisor before stacking exposure.
You want the metal in your hand. An IRA cannot hold metal at home. If physical custody matters to you, a direct cash purchase from a Texas dealer is a different product from an IRA, with different tax treatment.
The dealer is pushing premium or proof coins. Wide markups on graded coins are the most common way a gold IRA goes wrong. Common bullion coins and bars match the IRA structure better.
You need the money before age 59 and a half. Early distributions trigger 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
Is a gold IRA the same as a self-directed IRA?
A gold IRA is one type of self-directed IRA. A self-directed IRA can hold many alternative assets including real estate, private equity, and precious metals. When the asset is IRS-approved physical metal, the account is commonly called a gold IRA, silver IRA, or precious-metals IRA.
Can I roll a 401(k) into a gold IRA?
Yes, in most cases. A direct rollover from a former-employer 401(k) into a self-directed IRA avoids federal withholding and the 60-day clock. Active employees usually cannot roll a current-employer plan until separation, age 59 and a half, or another qualifying event.
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, fixed annual fees become a meaningful percentage drag on the balance, and the structure tends to favor a brokerage IRA or a gold ETF.
Can I store IRA gold at the Texas Bullion Depository?
Yes. The depository accepts IRA assets through its operator Lone Star Tangible Assets. The practical setup runs through a self-directed IRA custodian that coordinates with the depository. Confirm the current process and fees directly with the depository before committing. Source: texasbulliondepository.gov, checked June 2026.
Are American Gold Eagles really allowed in an 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.
Are gold IRAs FDIC insured?
No. FDIC insurance covers bank deposits, not investments. Precious metals inside an IRA are not deposits. They are covered by the depository’s private insurance policy (commonly through Lloyd’s of London), which protects the metal against vault loss, not against price drops.
Does Texas tax distributions from a gold IRA?
No. Texas has no state personal income tax under Article 8, Section 24 of the Texas Constitution. Federal income tax and the 10 percent federal early-withdrawal penalty (if you are under 59 and a half and no exception applies) still apply.
Can I take the gold out of my IRA and keep it?
Only as a distribution. Taking physical metal out of the IRA is an in-kind distribution: the IRS treats the fair market value of the metal as a taxable distribution on that date. After age 59 and a half there is no early-withdrawal penalty; before that age, the 10 percent federal penalty usually applies on top of ordinary federal income tax.
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. 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.
- Internal Revenue Code Section 1(h). Capital gains tax brackets, including the collectibles rate. uscode.house.gov. Checked June 2026.
- Texas Bullion Depository. IRA Storage Services. texasbulliondepository.gov. 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 triggers a full taxable distribution.
- Texas Constitution, Article 8, Section 24. State personal income tax prohibition. statutes.capitol.texas.gov. Checked June 2026.