Gold IRA Glossary
56+ terms explained in plain English. Understand every aspect of Gold IRA investing.
4
401(k)
An employer-sponsored retirement savings plan that allows employees to save and invest a portion of their paycheck before taxes. Can often be rolled over into a Gold IRA after leaving employment or reaching age 59½.
A
Allocated Storage
Another term for segregated storage—your specific metals are set aside and identified as belonging to you. The opposite of unallocated (commingled) storage where metals are pooled.
American Gold Buffalo
U.S. Mint coin containing one troy ounce of 99.99% pure gold (24 karat). The first .9999 fine gold coin produced by the U.S. Mint. Popular alternative to Eagles for investors wanting maximum purity.
American Gold Eagle
U.S. Mint gold coin containing one troy ounce of gold, though the coin weighs more due to copper and silver alloy. The most popular IRA-approved gold coin. Available in 1 oz, ½ oz, ¼ oz, and 1/10 oz sizes.
Asset Allocation
How your portfolio is divided among different investment types (stocks, bonds, gold, etc.). Proper allocation depends on age, risk tolerance, and goals. Most advisors recommend 5-20% in precious metals.
B
BBB Rating
Better Business Bureau rating measuring a company's trustworthiness. Ranges from A+ to F based on complaint history, transparency, and business practices. Top Gold IRA companies typically have A+ or A ratings. Check BBB before choosing a company.
Bullion
Precious metals in bulk form, valued by weight and purity rather than face value. Includes gold, silver, platinum, and palladium bars and coins meeting specific fineness standards. The standard form held in Gold IRAs.
Buyback
A Gold IRA company's program to repurchase metals from clients. Good companies offer competitive buyback rates, making it easy to liquidate when needed. Check buyback policies before choosing a company.
C
Canadian Gold Maple Leaf
Royal Canadian Mint coin containing one troy ounce of 99.99% pure gold. Known for advanced security features and consistent quality. One of the most widely held IRA-approved gold coins globally.
Catch-Up Contribution
Additional IRA contribution allowed for those age 50 and older. Currently $1,000 extra per year (total $8,000 for 2024). Helps older investors accelerate retirement savings.
Collectibles Tax Rate
A 28% maximum long-term capital gains rate on precious metals held outside IRAs. Higher than the standard 15-20% rate for stocks. One advantage of Gold IRAs: this rate doesn't apply while metals are inside the IRA.
Commingled Storage
Storage where your gold is pooled with other investors' metals. You own a share of the total, not specific pieces. Lower cost than segregated storage. Also called unallocated storage. Still your legal property.
Contribution
Depositing new money into your IRA (not from another retirement account). Annual limits apply: $7,000 ($8,000 if 50+) for 2024. Rollovers don't count against contribution limits.
Counterparty Risk
The risk that the other party in a financial transaction fails to meet their obligation. Paper gold (ETFs, futures) has counterparty risk—if the issuer fails, your investment could be worthless. Physical gold eliminates this risk.
Custodian
A financial institution that holds and safeguards IRA assets. For Gold IRAs, must be a bank, trust company, or IRS-approved entity qualified for self-directed IRAs. Handles administration, reporting, and compliance.
D
Depository
A secure facility where physical Gold IRA metals are stored. Must be IRS-approved. Major depositories include Delaware Depository, Brink's, and STRATA Trust. Features bank-vault security, insurance, and regular audits.
Direct Rollover
A rollover where funds transfer directly between custodians without the account holder taking possession. No taxes withheld, no 60-day deadline, no risk of mistakes. The recommended method for Gold IRA rollovers.
Disqualified Person
Someone forbidden from transacting with your IRA: you, your spouse, lineal descendants (children, grandchildren), their spouses, and fiduciaries. You can't buy gold from or sell gold to a disqualified person using IRA funds.
Distribution
A withdrawal from a retirement account. Can be in cash (sell gold, receive proceeds) or in-kind (receive physical gold). Distributions from traditional IRAs are taxable; early distributions (before 59½) may incur a 10% penalty.
Diversification
Spreading investments across different asset classes to reduce risk. Gold provides diversification because it often moves independently of stocks and bonds. A portfolio with 10-20% gold historically shows lower volatility.
Dollar-Cost Averaging
Investing fixed amounts at regular intervals regardless of price. Reduces the risk of buying everything at a peak. Example: investing $10,000 in gold over 12 months rather than all at once.
E
Early Withdrawal Penalty
A 10% tax penalty on IRA distributions taken before age 59½, in addition to regular income taxes. Some exceptions exist (disability, medical expenses, first home). Roth contributions (not earnings) can be withdrawn penalty-free.
F
G
Gold IRA
A self-directed Individual Retirement Account that holds physical gold, silver, platinum, or palladium instead of traditional paper assets. Offers the same tax advantages as regular IRAs while providing tangible asset ownership.
Gold IRA Company
A dealer that facilitates Gold IRA investments. They help you open an account, choose metals, and arrange purchase and storage. They work with custodians and depositories but don't hold your metals themselves. Examples: Augusta, Goldco, Birch Gold.
H
Hedge
An investment that offsets potential losses in another investment. Gold is often called an 'inflation hedge' or 'crisis hedge' because it tends to rise when stocks fall or currency loses value.
Home Storage Gold IRA
A misleading term for schemes claiming you can store IRA gold at home. These are generally NOT legal and result in the IRS treating your metals as a taxable distribution. Avoid companies promoting this—it's often a red flag for scams.
I
In-Kind Distribution
Receiving the actual physical gold from your IRA rather than selling it for cash. The metals are shipped from the depository to you. You owe income taxes on the fair market value. Popular for those wanting to physically hold their gold.
In-Service Withdrawal
A withdrawal from an employer-sponsored plan (like 401(k)) while still employed. Many plans allow this at age 59½, enabling you to roll over to a Gold IRA without leaving your job. Check your specific plan rules.
Indirect Rollover
A rollover where you receive a check from your old plan and have 60 days to deposit it into a new IRA. Your old plan withholds 20% for taxes (refunded when you file if completed correctly). Riskier than direct rollover.
K
Karat
A measure of gold purity based on 24 parts. 24 karat is pure gold (99.9%+), 22 karat is 91.67% gold, 18 karat is 75% gold. Most IRA-approved gold is 24 karat except American Eagles (22 karat).
N
Numismatic Coins
Coins valued primarily for their rarity, condition, and collector appeal rather than metal content. Generally NOT IRA-approved because their value is subjective and they carry high premiums. Avoid for retirement accounts.
P
Paper Gold
Financial instruments that track gold prices without physical ownership: gold ETFs, mining stocks, futures contracts. You own a claim, not actual metal. Convenient but carries counterparty risk and doesn't provide the same protection as physical gold.
Prohibited Transaction
An IRS-forbidden activity with your IRA, such as self-dealing (buying gold from yourself), personal use of IRA assets, or home storage. Prohibited transactions can disqualify your entire IRA, triggering immediate taxes and penalties.
Q
Qualified Distribution
A withdrawal from a Roth IRA that meets requirements for tax-free treatment: account open 5+ years AND you're 59½+ (or disabled, first-time home purchase, etc.). Non-qualified distributions may owe taxes on earnings.
R
Rebalancing
Adjusting your portfolio back to target allocations after market movements. If gold rises from 15% to 25% of your portfolio, you might sell some to maintain your 15% target. Usually done annually or when allocations drift significantly.
RMD (Required Minimum Distribution)
Mandatory annual withdrawals from traditional IRAs starting at age 73 (as of 2023). Calculated based on account balance and IRS life expectancy tables. Roth IRAs have no RMDs during the owner's lifetime.
Rollover
Moving retirement funds from one account to another (e.g., 401(k) to Gold IRA). Can be direct (trustee-to-trustee) or indirect (you receive funds and redeposit within 60 days). Direct rollovers are tax-free and preferred.
Roth Conversion
Moving funds from a traditional IRA to a Roth IRA. You pay income taxes on the converted amount now, but future growth and withdrawals are tax-free. Popular strategy for those expecting higher future tax rates.
Roth IRA
A retirement account funded with after-tax dollars. Earnings grow tax-free, and qualified withdrawals are tax-free. No RMDs during the owner's lifetime. Popular for Gold IRAs due to tax-free inheritance.
S
Safe Haven
An asset that investors move to during uncertainty or market turmoil. Gold is a classic safe haven—during the 2008 crash, investors fled stocks for gold, driving gold prices up 25% while stocks fell 57%.
Segregated Storage
Storage where your specific bars and coins are kept separately, labeled as yours. You own those exact pieces. More expensive than commingled storage but provides clearer ownership and easier auditing. Recommended for larger accounts.
Self-Directed IRA
An IRA that allows the account holder to choose from a wider range of investments beyond stocks and bonds, including precious metals, real estate, and private placements. Requires a specialized custodian.
SEP IRA
Simplified Employee Pension IRA. A retirement plan for self-employed individuals and small business owners allowing higher contribution limits than traditional IRAs (up to $69,000 in 2024).
Solo 401(k)
A 401(k) plan for self-employed individuals with no employees (except spouse). Allows both employee and employer contributions, potentially enabling higher savings than a SEP IRA. Can be self-directed for precious metals.
Spot Price
The current market price for immediate delivery of one troy ounce of a precious metal. Determined by global trading and changes throughout the day. The base price from which premiums are added.
T
Tax-Deferred
Investment growth that isn't taxed until withdrawal. Traditional IRA and 401(k) earnings are tax-deferred—you pay taxes when you take distributions in retirement, hopefully at a lower tax bracket.
Tax-Free Growth
Investment earnings that are never taxed if rules are followed. Roth IRA growth is tax-free—you pay taxes on contributions upfront but never on growth or qualified withdrawals.
Traditional IRA
A retirement account with tax-deductible contributions and tax-deferred growth. Taxes are paid upon withdrawal in retirement. Subject to Required Minimum Distributions (RMDs) starting at age 73.
Transfer
Moving assets between the same type of account (IRA to IRA). Similar to a direct rollover but technically different. Unlimited transfers per year, while indirect rollovers are limited to one per 12 months.
Troy Ounce
The standard unit of measurement for precious metals. Equal to 31.1 grams, slightly heavier than a regular ounce (28.35 grams). All precious metal prices and weights use troy ounces.
TSP (Thrift Savings Plan)
A retirement savings plan for federal employees and uniformed services members. Similar to a 401(k) but with limited investment options. Can be rolled over to a Gold IRA after separation from federal service.
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