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Gold IRA Costs and Fees
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With the precious metals such as gold, silver, platinum, or palladium, as with any kind of investment under the sun, you should have a full grasp of the expenses and other fees which are associated with the investment in question. For anyone interested in starting a self directed precious metals IRA, you need to be aware of the many different costs which come along with the retirement vehicle. Thanks to the tax deferred status of these Gold IRA accounts, you will have to keep them with an IRS approved IRA administrator or custodian and in a third party depository. On this page we look at the various different expenses, which include:
- Setup and administration fees
- Coin markups and commissions
- Yearly maintenance fees
- Storage fees
- Miscellaneous fees
Gold IRA Setup and Administration Fees
The good news is that there are no government sanctioned rollover or transfer fees to move over an existing traditional IRA to a precious metals IRA account. That does not mean that there are not any account application fees involved. Those sanctioned custodians and administrators of the precious metals IRAs often charge a processing fee in order to start the account opening for these self directed IRAs. Every administrator who charges a fee will have a different amount, yet the average is approximately $50 for this particular category of fee.
Commissions and Markups on Coins
There are several commissions involved with purchasing precious metals in a self directed IRA account. Transaction fees are those you would expect when you buy or sell coins or bars in your account. Such typical fees are assessed on a per transaction basis. The more you buy and sell, the greater numbers of these fees you will be forced to pay. There is no getting out of commission transaction fees regardless of which administrator you choose either. They are merely passing along the costs from the bullion or coin dealer with which they transact on your personal behalf. These fees will be different from one administrator to the next, but a good estimate is $40 for each transaction.
These fees should not be confused with the markup over spot that the coin dealers will also assess. Besides the value of the gold, silver, platinum, or palladium within the coins or bars you purchase, you will pay a certain premium which is on top of the spot price for the precious metals. This of course varies depending on the type of the product, the amount of demand for the product in question, and the premium the dealer himself charges your account administrator.
Yearly Maintenance Fees
Your account administrator is unable to afford to work in perpetuity for only a single application and startup fee on your precious metals IRA. They will also charge you an annual account maintenance fee which covers things like administration of the account, your periodic statement processing and distribution, and record keeping of your various holdings. These typical account administration charges range anywhere from around $75 per annum on up to several hundred dollars annually. When you obtain your free information kit or account setup paperwork, be sure to look for the disclosure of annual fees. They should be clearly spelled out in the relevant paperwork.
Some administrators will offer a discounted first year annual fee, or even an annual discount to the fee depending on how large your account size proves to be. Beware those charging sliding scale fees, where they are getting what only seems like a modest percentage based upon the value of your account's metals holdings. These fees get larger as your account size and gold value increases, and they can quite easily become exorbitant over time without you even realizing it.
The vaulting depository will also have storage and maintenance fees to physically inventory and safeguard your precious metals hoard. Any gold, silver, platinum, or palladium kept in such accounts have to be stored in these IRS approved depositories in a third party, off-site location separate from your account administrator.
Such depositories like Brinks and Delaware Depository levy yearly fees to cover these costs. Your administrator simply passes them along to you. The fees themselves will depend upon the actual depository you select in the end. Commonly, these companies charge in the neighborhood of between half a percent to one percent each year, which is based entirely upon the dollar value of the precious metals in question. They also may have differing fee schedules depending on whether you store your metals in the general vault as aggregated storage, or whether you insist on separate and individualized segregated storage.
There are also some miscellaneous fees you typically can not avoid, such as wire transfer fees. The vast majority of IRA custodians will assess these fees for any funds that you require them to wire to you, or which they must wire to a coin/bullion dealer or depository on your behalf. Such wire transfer fees commonly amount to around $25 for every outbound wire transfer they send for you. These fees should similarly be disclosed in the account opening paperwork and clearly mentioned somewhere.