Dear Birch Gold Group,
I’m considering moving my 401(k) that I started with an old company to an IRA with physical gold. If I set up a Roth Precious Metals IRA, how will I be taxed when I take the money out? Is it the same as a normal Roth IRA?
Thanks for the excellent question.
The distribution rules of a Roth Precious Metals IRA are the same as those for any other type of Roth IRA. If you meet the IRS requirements for a qualified distribution, then the distribution is tax-free. You do not have to pay taxes on the value of your metals, regardless of their gains, unless you fail to satisfy the requirements for qualified distributions.
Remember, you’ve already paid taxes on the income that you contribute to a Roth IRA, and those contributions grow tax-free. This is unlike a traditional IRA, in which your contributions are tax-deductible and your qualified distributions are taxable.
If you happen to take an early or otherwise unqualified distribution from a Roth Precious Metals IRA, note that there may be tax consequences, including the assessment of penalties. To learn more about these potential implications, we recommend that you speak with a tax professional.
Here are the requirements for taking qualified distributions, as provided by the IRS:
5 years must have passed since the first taxable year in which a contribution was made to your Roth IRA.
Your distribution must be:
Made on or after the date you reach age 59½, or
Made because you are disabled (as defined by the IRS), or
Made to a beneficiary or to your estate after your death, or
One that qualifies as an eligible payment toward your first home (up to a $10,000 lifetime limit).
Note, there are some exceptions and additional details that go into these requirements.
For more information, view the IRS guidelines regarding qualified Roth IRA distributions, or speak to a tax professional to determine the tax consequences for your specific situation.
Thanks again for the question! For additional information on setting up a Roth Precious Metals IRA, give us a call at (800)355-2116 and we’ll connect you with one of our Precious Metal IRA Specialists.
Do you have a question about how to invest in precious metals? Want to know more about how to set up a Precious Metals IRA, or which types of coins are available to you? Send an email to [email protected] and we may answer it in a future post on our site.