How To Convert Your Roth IRA to Gold

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If you have a Roth IRA, you may have noticed that gold coins and bars are listed as an approved investment on the IRS website. This is good news for investors who want to diversify their portfolio with precious metals.

The downside, however, is that the process of converting a Roth IRA to gold can be more complicated than simply buying shares in a mutual fund or ETF. Fortunately, there are several ways to convert your Roth IRA into gold. This article will expound on one of the easiest ways to do the same.

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Identify a Gold IRA Company

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As soon as you decide to convert your IRA to gold, the first thing you want to do is to find a reputable gold IRA company. You'll want to make sure that the company is licensed by the U.S. government, and that its gold is 100 percent insured against theft or loss.

Some companies offer direct-deposit services so that your funds are deposited directly into their accounts, while others require you to send them a check or wire transfer.

Once you've chosen a company and made the initial deposit, you can begin investing in gold with your IRA. Usually, the premiums charged by these companies will vary depending on how much gold they're selling and where they're sourcing it from.

Some may charge more than others because they sell only high-quality coins that have been vetted by third parties before being sold to investors.

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Pick an IRA Custodian

The next step involves choosing an IRA custodian. This is highly important as you convert a Roth IRA to gold because a custodian is the company that holds your investments and it may be an individual or institution. You want to keep in mind that with the many different custodians out there, some are better than others.

Ideally, when you convert money from your Roth IRA to gold, it should be done through an institution. That way, you don't have to worry about the value of your gold changing while it sits in a safe deposit box or storage facility.

Moreover, when choosing an IRA custodian, you want to look for one with gold storage services. This will allow you to store your metals at the same place where your other investments are held without having to move them around yourself. The best custodians also offer online access so that you can monitor your investments 24/7 and trade them whenever you want.

Handling the Paperwork

In order to convert Roth IRA to gold, you will need to fill out some proper paperwork. The first form is called a "letter of instruction," which is essentially just an explanation of why you want to buy gold with your retirement savings account. 

This letter should be addressed to the trustee of your Roth IRA and explain that you want to use your funds for investment purposes. It should also state how much money (from your fund) you want converted into gold coins or bars and when this conversion should take place. Once this letter has been received by your trustee, he or she will send out a check for the specified amount.

The second form is known as a "certificate of ownership." This document shows that all assets in the Roth IRA have now been converted into gold coins or bars, as requested on the letter of instruction form. Once it has been signed by both parties involved usually by yourself and your trustee, this certificate becomes legally binding and cannot be reversed without going through a lengthy legal process.

Finally, you must fill out another form if you are converting a traditional IRA or SEP-IRA into gold bullion or coins not just gold stocks. This form allows the IRS to monitor how much money people are using their retirement accounts for.

Wait for your Account Administrator to Transfer the Funds to Your Gold IRA

If you are converting your account from a traditional IRA, then your custodian will send your funds to the custodian of the corresponding Gold IRA. If you are converting from a Roth IRA, then it will be up to you to transfer the funds into the new account. 

Many custodians have online systems that allow you to easily make this transfer, but if not then simply contact them and ask how best to move money from one account type into another.

Choose What Gold you want to buy

Once you convert your traditional IRA to a Roth, you get to decide what kind of gold bullion to buy. Most people would want to purchase gold coins, rounds or bars. That said, the choice depends on your investing style.

Let us look briefly at these popular options.

1. Gold Coins

Gold coins are an attractive option because they have a high level of liquidity and can be sold quickly if necessary. However, they also tend to have a relatively high premium over their intrinsic value due to the costs associated with minting and distributing them.

2. Gold Bars

Like coins, gold bars offer some liquidity but at a lower price than other options. Their smaller size makes them convenient for storing at home or in a safe deposit box. 

They also have minimal premiums over their intrinsic value because they don't carry any distribution costs and are usually sold in larger quantities than coins or rounds.

3. Instruct your gold IRA account Custodian to Make the Purchases

Next, you want to direct your custodian to make the necessary purchases. Consequently, they will use the funds in your account to buy your chosen metals.

4. Your Metals will be shipped to a Secure Depository for Safekeeping

After the purchase, your metals will be shipped to a depository for safekeeping. Some security companies will claim that they will keep your gold at home, which is not a smart move. Be wary of anyone that claims this, as it could put you at high risk for IRS penalties.


If you're looking for a way to diversify your portfolio and hedge against inflation, gold may be a good option. But before investing in gold and other precious metals, you should know the risks involved.

Gold prices are notoriously volatile, so if you're looking to buy gold as an investment, you'll want to make sure that you have the right strategy in place.

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