A precious metals IRA conversion involves transferring or rolling over funds from an existing retirement account (like a Traditional or Roth IRA) into a self-directed IRA that allows investments in physical precious metals such as gold, silver, platinum, or palladium. The process typically involves opening a self-directed IRA, funding it via rollover or transfer, and then working with a Precious Metals Specialist to purchase IRS-approved metals for your account.

If you perform a direct rollover or transfer from an existing IRA or 401(k) into a precious metals IRA, there are generally no immediate tax implications, provided it is done correctly. However, if you withdraw funds instead of rolling them over, or if you convert a Traditional IRA to a Roth IRA, you may face taxes or penalties. It’s important to consult with a financial advisor to fully understand any tax consequences.

The IRS allows certain types of gold, silver, platinum, and palladium to be held in a precious metals IRA. These metals must meet specific purity standards: gold (99.5% purity), silver (99.9%), platinum (99.95%), and palladium (99.95%). Common approved items include American Gold Eagles, Canadian Maple Leafs, and certain bars or rounds produced by accredited refineries.

While you cannot take immediate physical possession of the metals while they are held in your IRA, they are stored on your behalf in an approved depository. When you reach retirement age, you have the option to either take physical possession of the metals or liquidate them for cash. If you choose to take physical possession, it will be treated as a distribution and may be subject to taxes or penalties, depending on your age and the type of IRA you hold.