The Madison Trust Gold IRA

What is a Gold IRA?

A Gold IRA is a retirement account that allows account holders to invest in physical gold. The IRS specifically allows for investment in precious metals, but the typical brokerage is not set up to facilitate the purchase. As a result these accounts are normally self-directed.

What are the advantages of a Gold IRA?

Gold IRAs offer two significant advantages over a standard brokerage IRA. The first is simple diversification. Brokerage accounts tend to focus on stocks and other market products. Those assets are great as a percentage of your retirement investing, and perhaps even a large one. However, asset diversification is key to investing success. Physical gold is one of the assets that investors turn to in order to make their retirement investing more diverse.

The second advantage a Gold IRA offers is that it can work as a hedge against the stock market. Gold prices tend to move in an opposite direction to stocks. As stocks fall, investors often panic and move more of their funds into “safe” asset classes such as gold. This leads to an increase in the price of gold as the price of stocks drop. Although this relationship doesn’t always hold true, it is an intuitive one and has been seen practically on many occasions.

How do I open a Gold IRA?

Each provider has their own unique steps for setting up a Gold IRA. Generally, though, there is a shared path of first setting up a Self Directed IRA and then using it to purchase gold. (Many Gold IRA websites present a simplified version of the process and don’t get into the details.) Here’s how it works at Madison:

1. Open a Self Directed IRA account – This is simple and can be done by filling out a form or speaking with a Specialist over the phone. On average it only takes about 10 minutes.

2. Fund the account – Most new clients fund their Gold IRA by rolling over an existing IRA or 401(k). You also have the option of starting a new retirement account by making an initial contribution.

3. Fill out the Investment Authorization form – This form instructs Madison to purchase gold on behalf of your IRA.

4. Submit specific gold instructions – This can be in the form of an invoice, purchase contract, or an order form.

5. Purchase – Madison buys the requested gold from the dealer of your choice.

6. Storage – The dealer ships the gold to your account at Delaware Depository.

What factors should be considered when choosing a Gold IRA provider?

There are three main considerations to keep in mind.

1. Fee transparency – In many financial products, it can be hard to get a good grasp of the fees being charged. This is especially true with a Gold IRA. There are numerous services which are fee-oriented and each one should be considered in turn. These services include setting up the Gold IRA account, maintaining the account, custodial fees, and storage fees. Some Gold IRAs market themselves as being “fee-free” and technically that’s true. For those companies the profit is made by having a bigger mark-up on the gold purchase itself. In almost all of those cases, the mark-up on the gold is greater than the fees that would have been charged. It pays to spend some time reviewing the various fee schedules, as this can save you thousands of dollars in the long run.

2. Ratings – Like any service, you can expect to receive differing levels of client support from the various Gold IRA companies. Ratings are usually available online and are easily accessible. When you do your research, place a particular focus on “earned” ratings, rather than ones which come from paid platforms. (The reviews on Google itself would be an example of earned ratings.) You can ask your accountant or financial advisor how to properly research a provider.

3. Flexibility – Flexibility in a Gold IRA can mean two different things and both are important. The first refers to the sourcing of the gold. Most Gold IRAs are linked to a specific dealer. That means you have no choice in who you purchase the gold from, nor how much you pay for it. Madison is not linked to any specific dealer and gives you the flexibility of choice. That means you can shop and compare and get the best possible price.
The second element of flexibility is the power to diversify with other types of assets. Diversification is important for maintaining a healthy retirement account. Many of the Gold IRAs on the market do not allow for diverse assets and are limited to gold and other precious metals. You would still be able to diversify, but to do so, you would have to open additional retirement accounts with other providers. That process can quickly become expensive and overly burdensome. Alternatively, a general Self Directed IRA allows for investment in all asset classes. Speak with a Specialist to find out which model better suits your investing needs.

Is a Gold IRA limited to just investing in gold?

A Gold IRA can theoretically invest in any kind of precious metal (IRS permitting) or even any kind of asset. Realistically, though, your choices will be limited by the specific provider that you choose. Many Gold IRA providers actually supply the gold that will be purchased by your retirement account. This limits your choice to whatever they offer. Madison’s Gold IRA is more open and allows for all IRS-approved metals, as well as other alternative assets.

The four metals that the IRS permits in an IRA are gold, silver, platinum, and palladium. These can be purchased in the form of Treasury minted coins or approved bullion. American Eagles are a popular option, as are gold bars that meet the minimum fineness requirement. There are other precious metals options available, and a Madison Specialist can send you a complete list.


Is there a minimum investment for a Gold IRA?
Legally no but many providers set minimum investment limits. Madison does not have any investment limits.

Are there any tax penalties for rolling over into a Gold IRA?
No. As long as the roll over takes place within 60 days, the process remains tax and penalty free.

How do I take a RMD (Required Minimum Distribution) from a physical Gold IRA?
There are three ways to take a distribution.

1. Sell an amount of gold equivalent in value to the RMD and then take out the cash.

2. Take the RMD from a different retirement account. The IRS does not require that each account be distributed; rather the account holder in toto has to withdraw the requisite amount.

3. Take physical possession of the gold by filing a Distribution Request.

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