How a Gold or Silver IRA Actually Works: Rich Jacoby Explains the Process

If you have ever wondered how gold and silver actually end up inside a retirement account, whether you can keep the metal at home, or what it really costs once the sales pitch is over, this episode of IncomeInsider TV is for you.

Host Sam LaLiberte sat down with Rich Jacoby, founder and CEO of Golden Crest Metals, to walk through the full lifecycle of a gold IRA: how a rollover works, who handles the money along the way, what it costs, where the metal is stored, and what happens when you are finally ready to sell.

If you've considered buying gold and silver, but felt the process was overwhelming or confusing - this is the interview for you. 

Watch the full interview below, or skip to the key takeaways if you would rather read.

As always, nothing in this interview or article should be taken as financial, tax, or legal advice. Speak with a qualified professional before making decisions about your retirement savings.

What Is a Gold IRA?

A "gold IRA" is not a separate type of retirement account under the tax code. It is generally a self-directed IRA that allows the account to hold certain qualifying physical precious metals rather than being limited to conventional assets such as stocks, bonds, mutual funds, and ETFs.

That makes it different from buying shares of a gold ETF such as GLD. With a precious-metals IRA, the account owns actual qualifying coins or bars that are stored on behalf of the account holder.

Most conventional brokerage IRAs do not offer physical precious metals as an available asset. Holding qualifying physical gold or silver generally requires a self-directed IRA administered by a custodian willing to handle those assets.

Related: Visit GoldenCrest Metals' website to learn more.

Not Every Gold Coin Qualifies

One common misconception is that any gold or silver product can simply be placed inside an IRA.

IRS rules generally prohibit IRAs from owning collectibles, including most coins and metals, but provide exceptions for certain U.S. coins and qualifying gold, silver, platinum, and palladium bullion that meets statutory requirements.

That makes product selection an important part of the process. Before retirement funds are used to purchase a coin or bar, the dealer and custodian should be able to explain why that specific product qualifies for an IRA.

Who Can Roll Funds Into a Gold IRA?

Eligibility depends largely on the type of retirement account and the rules of the existing plan.

Funds held in a traditional IRA or many former-employer retirement plans can generally be transferred or rolled into a self-directed IRA without waiting until age 59½.

If the money is still held inside a current employer's 401(k), 403(b), TSP, or similar retirement plan, the plan's rules determine whether an in-service rollover or distribution is permitted.

Jacoby noted that age 59½ can be an important threshold because some employer plans allow additional distribution options once an account holder reaches that age.

Before initiating a rollover, retirement savers should confirm eligibility with their existing plan administrator, custodian, or a qualified tax professional.

The Players Involved

A gold IRA transaction involves more parties than a typical brokerage purchase.

Based on Jacoby's explanation, the process generally works like this:

1. Initial consultation. The customer speaks with an account executive to determine whether the existing retirement account may qualify for a rollover or transfer.
2. Self-directed IRA and custodian. A self-directed IRA is established with a third-party custodian. Funds are then transferred or rolled over from the existing retirement account.
3. Product selection and pricing. The customer reviews available precious metals, pricing, and the dealer's terms before authorizing a purchase.
4. Funding. Once the custodian receives the appropriate instructions and paperwork, IRA funds are sent to the precious-metals dealer.
5. Purchase. The dealer sources the selected qualifying coins or bars.
6. Storage. The metals are shipped to an approved third-party depository, where they are inventoried and stored on behalf of the IRA.

Jacoby said Golden Crest works with Delaware Depository and described the facility as insured through Lloyd's of London.

The custodian maintains the retirement account, while the depository physically stores the metal. The precious-metals dealer facilitates the purchase but does not own the customer's retirement account.

No, You Generally Cannot Store IRA Gold at Home

One point Jacoby was direct about is home storage.

Precious metals held inside an IRA are subject to specific custody requirements. IRS guidance generally requires qualifying bullion held by an IRA to remain in the physical possession of a bank or an approved nonbank trustee.

That is why conventional gold IRAs use third-party custodians and depositories rather than allowing the account holder to keep IRA-owned bullion in a home safe.

Physical gold or silver purchased outside a retirement account is different. A cash buyer can generally decide where to store personally owned metal.

Related: Home Storage Gold IRAs - IRS Approved?

What It Actually Costs

This is where Jacoby urged buyers to slow down and ask direct questions before signing anything.

The Spread

Precious-metals dealers generally do not sell coins or bars at the spot price of gold or silver.

The difference between the dealer's acquisition cost and the customer's purchase price is commonly referred to as the spread or markup.

Jacoby said customers should understand that spread before buying and encouraged shoppers to compare pricing across multiple companies.

He also recommended asking the dealer to explain the spread directly rather than focusing solely on promotional offers.

Custodian and Storage Fees

Self-directed IRAs can also involve recurring administrative and storage expenses.

Jacoby discussed custodians used by Golden Crest with annual charges ranging from roughly $30 to around $250, depending on the arrangement.

Because fee structures vary by company and custodian, customers should request a complete fee schedule showing any account setup, administration, transaction, custodian, and storage costs before opening an account.

Related: Precious Metals IRA Fees Explained

Minimum Purchase

Jacoby said Golden Crest currently sets a $25,000 minimum for new precious-metals IRA accounts, although the company may make exceptions in some circumstances.

Minimums vary considerably across the industry, making this another question worth asking before beginning the rollover process.

The Buyback Policy

According to Jacoby, one of the most important and most overlooked questions is what happens when the customer eventually wants to sell.

A dealer's buyback policy can have a significant effect on what a customer ultimately receives when liquidating metals.

His advice was straightforward: ask every company about both its purchase spread and its buyback policy before moving forward.

If a salesperson will not clearly explain the pricing structure, Jacoby said he would consider that a red flag.

Related: How to Buy Gold and Silver with Your 401(k)

What If the Gold Dealer Goes Out of Business?

Jacoby also addressed a question many buyers may not think to ask before opening an account: what happens if the precious-metals company they bought from eventually closes?

The dealer does not own the retirement account or continue holding the metal after the transaction is completed.

The IRA remains in the account holder's name with the custodian, while the physical precious metals are stored separately at the depository.

If the original dealer disappeared, the customer would still have an IRA administered by the custodian and metals held at the depository. The account holder could later work with another precious-metals dealer when it came time to sell.

Selling Your Gold or Silver

When it comes time to sell, Jacoby said customers are not required to sell their metals back to the company they originally purchased from.

However, he said selling back to the original dealer may result in more favorable pricing because another company may offer less or charge additional fees when liquidating metals it did not originally sell.

That makes the dealer's buyback terms something worth understanding before making the initial purchase rather than waiting until years later when the customer is ready to sell.

Questions to ask include:

• How is the buyback price calculated?
• Is there a commission or liquidation fee?
• How quickly are funds sent back to the IRA custodian?
• Is the company obligated to repurchase the metal, or is the buyback policy voluntary?

How Required Minimum Distributions Work

Jacoby also touched on required minimum distributions, commonly known as RMDs.

Under current law, traditional IRA owners generally must begin taking RMDs at age 73, although the applicable starting age increases to 75 for younger generations under SECURE 2.0.

Because RMDs are based on the value of the retirement account, someone holding precious metals may need to sell enough metal to generate the required distribution.

Depending on the custodian and circumstances, an account holder may also be able to take an in-kind distribution, with the actual metal distributed out of the IRA and treated as a taxable retirement distribution.

As with any retirement distribution, the tax consequences should be discussed with a qualified tax professional.

Questions to Ask Before You Buy

Pulling together Jacoby's advice throughout the conversation, here is a practical checklist for anyone researching a gold IRA:

• What is your spread or markup over the underlying metal price?
• What is your buyback policy?
• Do you charge commissions or liquidation fees when customers sell?
• What are the total annual custodian and storage costs?
• Are the fees flat, or do they increase as the account grows?
• Where exactly will the precious metals be stored?
• Is the depository insured?
• Which company serves as the IRA custodian?
• What happens to my account if your company closes?
• Which coins and bars are eligible for an IRA?
• Are you willing to put your pricing and fees in writing?
• Am I being pressured to make a decision today?

On that final point, Jacoby was particularly critical of scarcity-based sales tactics.

Gold and silver markets can move, but he argued that customers should not be pressured into moving retirement money because a salesperson claims an opportunity will disappear within hours.

Related: Download Rich Jacoby's Free Gold and Silver Guide

The Gold IRA Process

A gold IRA becomes easier to understand once you separate the different roles involved.

The custodian administers the retirement account.

The precious-metals dealer sells the gold or silver.

The depository stores the physical metal.

The retirement account belongs to the account holder, not the precious-metals dealer, and the metal is stored separately rather than remaining on the dealer's books.

The larger takeaway from Jacoby's conversation is that buyers should understand the entire transaction before moving retirement money: what they are buying, the dealer's markup, recurring fees, where the metal will be stored, and what they can expect to receive if they eventually sell.

A gold IRA is ultimately a retirement account with some additional moving parts. Understanding those moving parts before signing an agreement makes it much easier to compare companies based on something more meaningful than a sales pitch.