How Does a Gold and Silver IRA Work? Storage, Limits, and RMDs

A gold and silver IRA works like any other individual retirement account for tax purposes, but instead of holding stocks or funds, it holds physical bullion and coins that meet federal purity standards. It’s a form of self-directed IRA: you make every investment decision, a specialized custodian handles administration and reporting, and the metals themselves sit in an IRS-approved depository rather than in your home or a personal safe. The same contribution limits, distribution rules, and tax advantages that apply to a conventional IRA apply here.

The Structure: Self-Directed Account With a Specialized Custodian

You can’t open one of these at a typical brokerage or bank. Federal law requires IRA assets to be held by a bank or by a trustee specifically approved by the IRS, and most mainstream institutions aren’t set up to handle physical metals.¹ So you’ll work with a self-directed IRA custodian that specializes in alternative assets.

The custodian’s role is administrative. They hold the account, file required IRS reports (including annual contribution and fair market value disclosures), and execute the purchase and sale instructions you give them. They don’t recommend which metals to buy or when to sell. You steer the account; the custodian keeps it legal.

Fees vary widely, and the relationship is hard to unwind once you’re in. Annual administrative fees at self-directed custodians commonly run $250 to $500, with setup fees, transaction fees, and wire fees layered on top. Get the full schedule in writing before you sign anything.

You’ll also choose Traditional or Roth when you open the account. A Traditional gold and silver IRA gives you a potential upfront deduction and taxes distributions later; a Roth uses after-tax dollars and produces tax-free qualified distributions in retirement. Income limits apply to Roth eligibility and to Traditional deductibility when a workplace plan is in the picture.²

What Metals Actually Qualify

Federal law treats collectibles purchased inside a retirement account as immediate taxable distributions, and then carves out an exception for bullion and coins meeting specific standards.³ The exception splits into two categories.

Named Coins

The statute names certain government-minted coins as eligible regardless of general purity rules. These include American Gold Eagles and American Silver Eagles (coins described in 31 U.S.C. § 5112) and coins issued under the laws of any U.S. state.⁴ The American Gold Eagle is worth noting because its fineness is 0.9167, below the bullion threshold, yet it’s permitted by name. Both bullion-strike and proof versions qualify.

Qualifying Bullion

For bars and other bullion products, the standard is the minimum fineness a commodities exchange requires for delivery against a futures contract. In practice that means COMEX standards: gold bullion at least 0.995 fine, silver bullion at least 0.999 fine.⁵⁶ Canadian Maple Leafs, Australian Kangaroos, and certified bars from refiners on the COMEX approved list are common IRA-eligible products. Rare numismatic coins, jewelry, commemorative medallions, and metals below the fineness floor are off-limits.

If a prohibited collectible ends up in the account, the IRS treats the purchase price as a distribution. You’ll owe income tax on the full amount, plus a 10% early withdrawal penalty if you’re under 59½.⁷⁸

Funding the Account and Buying the Metals

Money gets into the account one of three ways: a direct cash contribution, a transfer from an existing IRA, or a rollover from a workplace plan like a 401(k).

A trustee-to-trustee transfer moves money directly between custodians without the funds ever touching your hands. No taxes are withheld, no 60-day deadline applies, and there’s no annual limit on how many transfers you can do.⁹ The new custodian typically handles the paperwork once you provide the existing account information.

A rollover is different. You receive a distribution and have 60 days to redeposit it. Miss that window and the entire amount becomes a taxable distribution. If the source is a workplace plan, your former employer is required to withhold 20% for taxes, meaning you’d need to cover that 20% from other funds to roll over the full amount. IRA-to-IRA rollovers face 10% withholding unless you opt out, and you’re limited to one such rollover per 12-month period across all your IRAs. Direct transfers don’t count against that limit, which is why most advisors recommend that route.⁹

Once money lands in the account, you pick a precious metals dealer and tell the custodian what to buy. You submit a purchase authorization (sometimes called a “Direction of Investment”) specifying the dealer, the product, and the quantity. The custodian wires payment, and the dealer ships the metals directly to the depository. Expect a wire fee of $25 to $50 per transaction.

Dealers charge a premium above the spot price. Standard gold bars and coins commonly run 3% to 8% over spot. Silver premiums tend to be higher, often 8% to 20%, partly because silver’s lower per-ounce price makes manufacturing and shipping a bigger share of the total. Gold premiums above 10% or silver premiums above 25% on common products are worth investigating before you buy.

Where the Metals Live

This is the rule that catches most people off guard: you cannot store IRA-owned metals at home, in a personal safe, or in a safe deposit box you control. The statute requires qualifying bullion to be in the physical possession of the account’s trustee.¹⁰ Custodians arrange storage at specialized depositories that provide security, auditing, and insurance.

You’ll typically choose between two storage styles. Commingled (or “allocated pool”) storage keeps your metals alongside those of other investors; you own a specific quantity but not specific bars or coins. Segregated storage sets your exact items aside separately. Segregated costs more, but you get your specific coins back at distribution.

The Home Storage Trap

Some promoters advertise “home storage” gold IRAs through an LLC structure: you form a company, make the IRA the owner, and keep the metals in a home safe as the LLC’s manager. The IRS and the Tax Court have rejected this arrangement. In McNulty v. Commissioner, the court held that an IRA owner who took physical custody of American Eagle coins through an LLC received taxable distributions equal to the coins’ full purchase price, plus accuracy-related penalties. Personal possession of IRA assets, the court said, is inconsistent with the statutory scheme because it removes independent oversight.

If the IRS determines you engaged in a prohibited transaction by keeping IRA metals at home, the whole account can lose its tax-advantaged status as of January 1 of the year the violation occurred, with all assets treated as distributed at fair market value.¹¹ That means income tax on the full balance, plus the 10% early withdrawal penalty if you’re under 59½.

Prohibited Transactions to Avoid

Home storage is one example of a broader category. The IRA cannot transact with “disqualified persons,” which includes you, your spouse, your parents, your children and their spouses, any fiduciary of the account, and anyone providing services to it.¹² You can’t sell gold you already personally own to your IRA, buy metals from the IRA for personal use, pledge IRA metals as collateral, or store them in property you own. The account operates at arm’s length from you and your family at all times.

An initial excise tax of 15% of the amount involved applies for each year a prohibited transaction remains uncorrected, and for IRAs the account itself loses its protected status, triggering full distribution treatment.¹²¹¹

Contribution Limits for 2026

Gold and silver IRAs follow the same annual limits as any other IRA. For 2026, the contribution ceiling is $7,500, up from $7,000 in 2025. If you’re 50 or older, you can add a $1,100 catch-up contribution for a total of $8,600.²

These limits apply across all your IRAs combined. Contribute $3,000 to a conventional Roth and $4,500 to a gold and silver IRA in the same year and you’ve hit the $7,500 ceiling. Excess contributions face a 6% penalty for every year the excess stays in the account.

Getting Money Back Out

When you’re ready to take money out, you can sell the metals and receive cash or take an in-kind distribution of the physical bullion. Either way, distributions from a Traditional gold and silver IRA are taxable. The IRS values the metals at their fair market value on the distribution date, and that amount gets added to your gross income for the year.¹³ Roth distributions are tax-free if you’re at least 59½ and the account has been open at least five years.

Withdrawals before 59½ from a Traditional IRA carry a 10% additional tax on top of regular income tax, with limited exceptions for disability, certain medical expenses, and a few other situations.⁸

Liquidation Takes Time

Selling isn’t instant. You instruct the custodian to sell, the custodian contacts a dealer, the dealer makes an offer based on current spot prices and the condition of the metals, and the depository ships to the dealer. Payment typically arrives one to three business days after the dealer receives and verifies the shipment. Plan on a week or two from start to finish.

Required Minimum Distributions

Traditional gold and silver IRAs are subject to required minimum distributions starting April 1 of the year after you turn 73.¹⁴ After that first year, each RMD is due by December 31. The starting age rises to 75 in 2033 under the SECURE 2.0 Act. Roth IRAs have no RMDs during the owner’s lifetime.

Missing an RMD triggers a 25% excise tax on the shortfall, reduced to 10% if you correct it within two years by withdrawing the required amount.¹⁵ Given the liquidation timeline above, waiting until December to sell metals for an RMD is risky. Start the process early in the fourth quarter to give shipping and payment enough runway.

1
Office of the Law Revision Counsel. 26 USC 408 – Individual Retirement Accounts
2
Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500
3
Office of the Law Revision Counsel. 26 USC 408 – Individual Retirement Accounts – Section 408(m)
4
Office of the Law Revision Counsel. 26 USC 408 – Individual Retirement Accounts – Section 408(m)(3)(A)
5
CME Group. Chapter 113 Gold Futures
6
CME Group. Chapter 112 Silver Futures
7
Office of the Law Revision Counsel. 26 USC 408 – Individual Retirement Accounts – Section 408(m)(1)
8
Office of the Law Revision Counsel. 26 USC 72 – Annuities; Certain Proceeds of Endowment and Life Insurance Contracts – Section 72(t)
9
Internal Revenue Service. Rollovers of Retirement Plan and IRA Distributions
10
Office of the Law Revision Counsel. 26 USC 408 – Individual Retirement Accounts – Section 408(m)(3)(B)
11
Internal Revenue Service. Retirement Topics – Prohibited Transactions
12
Office of the Law Revision Counsel. 26 USC 4975 – Tax on Prohibited Transactions
13
Office of the Law Revision Counsel. 26 USC 408 – Individual Retirement Accounts – Section 408(d)
14
Internal Revenue Service. Retirement Topics – Required Minimum Distributions (RMDs)
15
Internal Revenue Service. Publication 590-B (2025), Distributions from Individual Retirement Arrangements (IRAs)