July 25, 2022


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Using A Self-Directed IRA to Invest in Precious Metals

Don’t be alarmed but I’m starting this off with a few warnings. Understand the risks of precious metals IRA and also the inherent risk of starting your self-directed IRA.

** Warning ** a Self-Directed IRA falls under the Traditional IRA definition and standards for the IRS and will be subject to additional fees or taxes if you withdraw from the account before your qualified age.

** Warning ** a Self-Directed IRA is not the right vehicle for investment purposes if you need to liquidate your retirement before reaching your qualified age.

** Warning ** a Self-Directed IRA is subject to the same registering and taxing penalties as a Traditional IRA.

** Warning ** in a Self-directed IRA gains are not taxed till distributions are taken.

** Warning ** all IRAs provide tax benefits for retirement savings. You need to consult with your tax professional to determine which IRA benefits your current situation.

IRA accounts, traditional, Roth, or Self-Directed are held for the investor by custodians.

Definition of Self-Directed IRA – by the SEC “is an IRA held by a custodian that allows investment in a broader set of assets than is permitted by most IRA custodians”. Custodians for self-directed IRAs don’t make investment decisions for their clients and may allow investors to invest in alternative assets including real estate, promissory notes, tax lien certificates, and private placement securities.

** Warning ** “digital assets may provide fair and lawful investment opportunities, they may also be conducted without SEC registration or a valid exemption from registration, and may not provide complete or accurate information to aid investors in making informed decisions”… taken directly from the SEC website on “The Risk of Fraud”.

Okay, now that I have scared you from making any decisions, don’t let me scare you from making money or diversifying your portfolio.

I provide these warnings not as a scare tactic to prevent you from buying your Gold in an IRA, I provide them to ensure you understand the concerns the IRS and SEC have with the PEOPLE you may be dealing with. When you invest with a reputable Gold or Silver IRA company you are being provided with the utmost information to make informed decisions.

In this article, I will cover some highlights of investing using a Gold or Silver IRA. I will provide no investment advice or tax advice only providing information for you to make good decisions.

Self-Directed Gold IRA Benefits

Looking for tax-deferred investments for financial security at retirement.

Like other traditional IRAs with the self-directed IRA, you defer your tax obligations till you start taking your distributions. Unlike a traditional IRA with stocks, where you sell your stocks and take cash distributions, in a precious metals IRA you can take control of the gold itself as a distribution or you can work with the company who sold you the metals to sell them back and then take the cash equivalent distribution.

With a self-directed IRA, you can roll over your past employer’s 401K plans. The advantage of this is once you roll over a partial amount or the full amount you can make decisions as to what precious metals you’d like to own.

3 Rules to a Self-Directed IRA

While the IRS allows you to personally manage your account there are three main rules you cannot break.

  1. 1
    Disqualified Persons – People who cannot do direct or indirect transactions. For example, you, beneficiaries of the IRA 
  2. 2
    Personal Benefit – you cannot have personal benefit from the IRA – for example you cannot buy an investment property and then take the profit personally. The money and cost must go through the IRA 
  3. 3
    Disallowed Investments – you as the manager cannot invest in disallowed assets per IRS rules for retirement accounts. For example collectibles, life insurance, and trusts that qualify as an IRA are not eligible to be shareholders of an S-Corporation.

When using a Precious Metals IRA you cannot hold the assets personally. You must use a secure storage facility and not take personal ownership of the asset. IRS has specific coins and bars that are approved and when purchasing these products within your IRA any reputable IRA investment company will assist you in purchasing the correct items.

Rollover to your IRA

The best opportunity to start investing using a self-directed IRA for your Gold or Silver is when you have a previous employer’s 401K. You can liquidate the assets and transfer the money to your self-directed IRA. You can choose to take the money for up to 60 days without penalty. But you would want to make sure you have your funds in the account before the 60-day max window closes.


As with all retirement IRA accounts, you can start taking distributions at 59 and ½ years of age. If you take distributions before that time you will be subject to penalties.

At the time of distribution, you have the choice to take possession of the physical asset or you can liquidate the precious metals and take cash distributions.

When you take your distributions that is when you will be required to claim any gain or loss on your tax statements.

Risk of Fraud and Concerns with Self-Directed IRAs

I have provided the ** warnings ** and concerns when using the self-directed IRA option earlier. The law allows you to control and manage your retirement funds. If you follow the SEC and IRS rules for retirement accounts you will have no negative results.

The concern of the SEC is that you, as the manager of the account, will be enticed to invest using your self-directed account and the investments are not secure or fraudulent. The SEC puts these warnings in place as there are many fraudulent companies looking to steal investor money.

Check with the SEC, IRS, and the States Corporation Commission, check reviews and do your due diligence before making any investment decision.


Are the rules for self-directed IRAs Different?

No, the self-directed IRA rules are the same as other IRA accounts. The allowable and disallowed investments must be followed for self-directed accounts.

What are the requirements to start a self-directed IRA?

If you are starting your self-directed IRA you must be investing with earned taxable income. If you are rolling over another account you will have paperwork to complete for both the establishment of your self-directed IRA and the disposal and transfer of the funds.

How do I set up a self-directed IRA account?

You first must open an account with a custodian or trust company. Once you choose a custodian you can open your self-directed IRA account. After that, you can fund your account. Most major gold IRA companies will walk you through this process. They tend to be or have a good relationship with custodians and can offer simple advice.

How do I set up a self-directed IRA account?

You first must open an account with a custodian or trust company. Once you choose a custodian you can open your self-directed IRA account. After that, you can fund your account. Most major gold IRA companies will walk you through this process. They tend to be or have a good relationship with custodians and can offer simple advice.

Pros & Cons of IRA


  • Tax-free or tax-deferred account growth
  • Control over your investments
  • High return on investment potential
  • Option to create an LLC


  • Paperwork and fees
  • Must follow the requirements of a self-directed IRA and adhere to the rules and requirements 


If you are ready to get started check out our page on the Best 5 Gold IRA Companies. These companies are vetted and provide resources for you to make reasonable decisions. When investing in precious metals you may consider working with a reputable company that will provide you with accurate information.

If you are ready to diversify your investments and you are capable of managing your own investments, then the logical option is to open a precious metals IRA.

** final warning ** we are not providing advice only providing information. Make investment decisions based on your research.

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