If you are contemplating opening a precious metals IRA, it is essential that you consider all fees related to its management, including an initial account setup fee, annual custodial fees and storage charges.
Reputable IRA providers will clearly outline these annual fees in your account paperwork, while coin markups and seller fees may also come into play when purchasing gold IRAs.
Initial Setup Fees
Gold IRAs have become an increasingly popular way for investors to diversify their retirement portfolios, but it’s essential for them to understand any associated fees before investing.
Custodians typically charge one-time setup fees when opening new accounts, to cover the administrative costs involved with creating one. These setup fees cover costs such as paperwork and administrative work required in setting up your new account.
Other fees to consider when buying gold include annual storage fees, which may be either flat-fee or percentage of its total value. Some dealers add an additional markup or seller’s fee on top of current spot price precious metals.
Investors should be wary of transaction fees that can arise when transferring funds between accounts such as traditional IRAs or 401(k)s and Gold IRAs, which incur fees that represent a percentage of the transfer. Such expenses can quickly accumulate.
Custodian Fees
Your IRA custodian should charge transaction fees every time you buy or sell coins and bars in your account; these costs typically are passed along from bullion dealers that they work with on your behalf.
There are some gold IRA custodians who do not charge additional annual fees beyond initial set up and administration expenses, however most do. Annual costs can range anywhere from $75 up to several hundred dollars annually and should be clearly communicated in any documentation.
Other fees typically associated with precious metal investments in an IRA include transfer fees charged when funds are moved between accounts or financial institutions – these typically range between $25-50 depending on your custodian.
Storage Fees
Precious metal depository fees depend on the monetary value of your bullion, with annual storage costs typically comprising only a small percentage. Your custodian should disclose these annual storage charges in their free information kit or account setup paperwork.
Administrators of IRAs may charge transaction fees that represent a percentage of the price of your precious metals, in order to generate profit on sales by adding an increase in price with bullion and coin dealers.
Goldco charges an initial setup fee of $50, a $30 wire fee and annual maintenance fees totalling $80 for their IRA customers who choose non-segregated or segregated storage respectively; additional liability coverage must also be maintained due to physical assets backing these IRAs.
Transaction Fees
Many IRA providers charge transaction fees when purchasing or selling physical precious metals, which typically reflect costs that an administrator passes onto bullion dealers or coin dealers they do business with.
Fees charged by an IRA custodian for processing and record-keeping activities range from $75-$400 annually; reliable custodians should make this information clear in their documentation.
Storage fees must also be paid when keeping gold and other precious metals in a depository approved by the IRS, typically between $10 to $60 monthly or 0.35%-1% annually of assets held as reserves.
Termination Fees
Fees associated with investing in precious metals through a gold IRA can quickly add up, such as an application fee, annual maintenance fees, selling fees, storage fees, insurance fees for your depository account and cash-out fees – these should all be taken into consideration when budgeting for your precious metals investment.
Custodians typically charge annual account maintenance fees either as an annual flat rate or percentage of your precious metal holdings’ total value, which can run to several hundred dollars each year and should be clearly explained in any free information kit and account setup paperwork provided to customers. Sellers, meanwhile, charge markup on pricing of bullion and coins to create their profits or spread, which usually averages out to about 3-3%.
