A home storage gold IRA allows you to invest in precious metals like gold while also letting you store them in a secured safe at home. Although this storage option offers you more access and control over your metals, there are still things you must consider, such as fees, penalties, security risks, yearly reports, and setting up an LLC to comply with the IRS.
If you need help figuring out where to start, I recommend Noble Gold as the best gold IRA company that offers home storage to keep your gold. It provides 7 Royal Survival Packs, where you can choose various packages depending on your financial needs, especially in emergencies. So if you're looking for a secured and reputable gold IRA company, then Noble Gold is the choice for you.
If you're one of those individuals who prefer to have instant access to your assets, you may be interested in keeping your precious metal investments at home under your watchful eye. Or you may be concerned about the stability of financial institutions. Whatever the case, you’ll be glad to know that it’s possible to set up a home storage gold IRA. However, it's essential to know that there are specific rules and risks involved.
In this post, you'll learn what a home storage gold IRA is and how storing your gold and other precious metals at home works. We'll also explore the IRS rules and regulations, its legalities and penalties, pros and cons, and the steps to open home storage for your gold IRA.
What Is A Home Storage Gold IRA?
A Home Storage Gold IRA is a type of individual retirement account (IRA) that allows you to invest in physical gold, silver, and other precious metals while letting you store your investments at home. This is in stark contrast with other Gold IRAs that require you to choose a custodian and a third-party storage facility to keep your gold.
While this may seem simple, it isn’t as straightforward as buying gold and putting it in a safe at home. If you want that gold to be a part of your retirement funds and to take advantage of the tax benefits of an IRA, there are a number of requirements you must meet.
You can only opt for a home storage gold IRA by looking for a reputable IRA custodian that offers home storage service for precious metals.
Furthermore, you must set up a Limited Liability Company (LLC) to meet the IRS’s requirements. Otherwise, besides the additional risks and costs of potential theft, you may face tax penalties like a 10% early withdrawal fee plus a 28% capital gains tax.
Why Store Gold At Home?
Storing your gold investments at home is an excellent approach to having direct access to your assets, especially when there is an emergency such as the outbreak of war, or a natural disaster, when you may need a physical investment that is valuable enough to be accepted anywhere. It also comes with other benefits, such as:
- Feeling more secure having physical possession of your gold
- No need to visit third-party facilities to check up on your investments.
- You can save potentially hundreds of dollars in storage fees every year.
However, although keeping precious metals at home might offer convenience, it also comes with severe drawbacks.
- There’s a risk of incurring penalty fees with the IRS.
- Home storage doesn't provide the quality of insurance and protection as a professional storage facility.
- There’s a high risk of theft, and you may put yourself and your loved ones in harm’s way for having such valuable investments at home.
But if you’re still set on storing your gold at home, we’ll teach you the best way to do it.
How Does A Home Storage Gold IRA Work?
The home storage gold IRA works similarly to a self-directed IRA. The key difference is that there’s no third-party depository involved, and you or your custodian must set up an LLC (Limited Liability Company) for an additional fee to comply with the IRS. An LLC is a type of business entity that provides some legal protection and tax benefits for its owners. It can be used to hold assets such as real estate, stocks, or precious metals, which is why you need one for a home storage gold IRA.
Today, opening an LLC is quick and easy with companies like zenbusiness or RocketLawyer.
When setting up an LLC for your home storage gold IRA, you or your custodian will name you the non-compensated manager so you have flexibility and control over your assets. This goes through the following steps.
- After you create an LLC, you can open a checking account under the LLC’s name with the bank of your choice and use this account to purchase your precious metals for your gold IRA.
- The next step is to open a self-directed IRA with the right custodian or gold IRA company and fund it using your newly created LLC account.
- Once your account is funded, you can select your assets from the list of IRS-approved precious metals and have them shipped to your home.
While this is simple enough, the IRS has very strict rules and requirements for this type of investment to count towards your retirement savings. Failing to meet the IRS criteria for a home storage gold IRA can quickly end up costing far more than its potential benefits.
Let’s see what those requirements are.
Home Storage Requirements And Legalities
If you're interested in a home storage gold IRA, you must understand specific requirements and regulations to store your precious metals at home. Let's take a look at the list below and see if you're able to keep one.
Home Storage Requirements
- You must create an LLC with a specially written operating agreement under your name.
- You need a minimum net worth of $250,000 after incorporation and audits.
- You must raise a $250,000 fidelity bond to serve as corporate insurance for your assets.
- You must be financially trustworthy and have previous, verifiable experience working with retirement funds.
- You must have a corporate attorney and display a detailed audit by a certified public accountant annually.
As you can see, few people will likely qualify for the home storage gold IRA. In fact, only high-net-worth individuals who are experienced fund managers can qualify. Even if you did qualify yourself, unless you’re willing to dedicate long hours of work to keeping your IRA within the IRS’s requirements, it’s much better to store your precious metals in an IRS-approved depository despite its storage fees and maintenance costs.
Gold IRA Home Storage Legalities
Having a gold IRA home storage is legal, and it can be approved by the IRS.
However, there are certain legalities you must adhere to. You must prove to the IRS that you don’t benefit financially from the precious metals in your LLC. This means that you can't use the gold for personal use or sell it for a profit. If you do, you'll be subject to capital gains tax, and you’ll forfeit all the tax benefits you earn from keeping your gold in a gold IRA.
Home Storage Penalties
It can be expensive to break the IRS's rules and regulations; if you fail to follow one, you must be prepared for the tax penalties you'll incur.
For example, if the IRS proves that you withdrew your precious metals from your home storage gold IRA before turning 59 ½, you'll be subject to a 10% early withdrawal penalty. If you also sold a part or all of the gold you kept at home, you'd face a maximum capital gains tax of 28% for any profits you made.
Always keep these things in mind when considering opening a home storage gold IRA. If meeting these legal requirements isn’t an issue for you, we’ll show you the steps to get started.
Steps To Open A Home Storage Gold IRA
Step #1 Find A Reputable Custodian
The first step to opening a home storage gold IRA is to look for a suitable custodian. This custodian holds and manages precious metals like gold, silver, platinum, and palladium. The custodian will handle everything from the purchase, payment, and delivery of the gold bullion to your home. They manage all transactions, keep track of them, provide account statements, and submit paperwork to the IRS.
There are dozens of great custodians out there, but you must make sure they offer home storage as an option. You can refer to the list of IRS-authorized custodians here.
Step #2 Create An LLC
As mentioned before, you must set up a limited liability company (LLC) with a special agreement that allows you to invest in precious metals and store them at home. To complete this process, you must complete the necessary paperwork and submit documentation to ensure you understand the rules of keeping your assets at home.
Step #3 Open A Self-Directed Home Storage Gold IRA
After selecting a reputable IRA custodian and setting up your LLC, you must open a gold IRA account with the custodian. Their customer support will guide you through the process of opening an account by filling up some necessary paperwork with your personal information, the information of the LLC, and then submitting an application once you're done.
Step #4 Fund Your Gold IRA
Once you set up your gold IRA, you must fund your account to make purchases. You can contribute directly to the account from your income (within your annual contribution limits) or you can roll over money from an existing retirement account, such as your 401(k) or IRA. Both your current and new custodians will do the transactions, and you must wait at least 1 to 3 weeks for the process to be completed.
There will be no tax penalties if you let the transfers be handled by your custodians directly. Otherwise, you may be liable for the 10% early withdrawal penalty if you choose to withdraw your retirement savings and take too long to deposit the money into your gold IRA yourself.
Step #5 Buy A Safe
You can’t just keep your gold at home lying around. You’ll need to either buy a safe or build a storage facility that meets the IRS requirements for keeping precious metals.
Step #6 Select Your Investments
Once your IRA custodian has notified you that the transfer has been completed and your account is funded, you can begin selecting your gold investments. You can choose between gold bars or coins or mix them with other precious metals like silver. Before making any final decisions, you must ensure that your purchased metals are IRS-approved. For example, IRS-approved gold must be at least 99.5% pure or have at least 0.995 fineness.
If you're buying them from a well-known custodian, you can just choose your investments from its selection of IRS-approved coins and bars to ensure that your would-be investments meet the purity standards and requirements.
Step #7 Buy Your Gold
You’re now completely set up to start your gold IRA with home storage. So, it’s time to start storing your gold at home. The next step is to direct your custodian to make your desired purchases and have the gold or precious metals shipped to your home. Your custodian will probably select a trusted third party to handle the transport like Brink’s. Some custodians offer free shipping, and others don't.
Step #8 Purchase Insurance
Once you store your gold investments at home, you must secure your assets by purchasing corporate insurance in a $250,000 fidelity bond to protect them against loss or theft.
Step #9 Keep Track Of Your Records
Keeping track of your IRAs is a difficult process, especially when you keep your gold IRA at home. The IRS requires that you monitor your detailed records, including purchases, date of purchases, and any transfers of assets – while working with a certified public accountant to verify your documents.
Keeping track of your records ensures you comply with IRS rules and regulations to avoid additional penalties and legal issues.
Best Gold IRA Company That Offers Home Storage Services: Noble Gold
While many custodians offer gold IRA services, not all provide an option to store your gold legally at home. One of the best gold IRA companies that give this home storage service is Noble Gold, and we'll take a closer look at its background, fees, and special features to help you start storing your precious metals at home.
Noble Gold is a top-rated gold IRA company that allows you to invest in gold and other precious metals and keep them by delivering them straight to your home.
Its home storage gold IRA option is available for gold and silver bullion, where you can choose between coins and bars. But what sets Noble Gold apart from its competitors is that it offers a 7 Royal Survival Pack that includes a mix of gold and silver coins and bars to help you prepare for emergencies and economic uncertainty.
It also delivers your orders with privacy shipping to your door within 5 days of purchase. You can refer to the table below and determine which package suits your financial goals and lifestyle.
|Royal Survival Pack
|To cover extra expenses like a serious accident or a small debt.
|For more serious incidents, to cover the average living expenses if the family of 4 for a month or 2.
|Covers living expenses for those with high spending needs or keeps your covered if there is a major disaster like war.
|Designed for more long-lasting disasters where large and small amounts of gold are kept until needed.
|For high-level protection for your family where you're covered with a mixed pack of useful and well-known metals for up to a year.
|A top Royal Survival Pack with a set of precious metals to keep your wealth safe from any danger.
|A special product that is only offered to offshore clients who want to hold precious metals within North America. It can also be paid in dollars or Bitcoin.
In addition to its home storage option, Noble Gold offers several unique features, such as a buyback program that allows you to sell your precious metals back to the company at fair market value and an educational gold and silver guide to get you started investing with precious metals.
Overall, Noble Gold is a reputable gold IRA company that allows you to keep your precious metals at home, unlike other gold IRA companies. However, you should consider the rules and requirements discussed above before choosing a home storage option.
Special Fees And Regulations To Consider In A Home Storage Gold IRA
You may want to consider investing in gold since its value has historically increased over time. However, you should know the costs and fees of setting up gold storage at home to assess if it makes financial sense. These fees include:
- Set up fee—this one-time fee can cost from $50 up to $200 depending on your custodian, and is used to create a gold IRA to purchase physical gold.
- Transfer fee—the custodian may charge about $25 per wire transaction when you send or receive money with your bank accounts. Additionally, if you're funding your gold IRA from another retirement account, your account provider may charge a fee as well.
- Maintenance fee—to ensure that your gold IRA is in good standing, your IRA custodian could impose an annual maintenance fee to cover overhead expenses on handling your account. You can avoid paying this fee with some custodians, such as Augustus Precious Metals, provided you manage your account regularly.
- Markup fee—buying gold from a dealer doesn't mean that you'll be paying the exact market price. Your dealer may charge you more than the actual price of gold as a service or markup fee.
- Delivery fee—if you plan on purchasing gold regularly, you might pay more for the deliveries. But remember that some custodians offer free shipping for a certain amount of minimum purchase, like Augusta Precious Metals and American Hartford Gold.
- Liquidation fee—this may differ depending on the kind and amount of precious metals you sell. It typically includes the costs and profit margin incurred by the dealer when selling your gold and any processing costs incurred by the custodian.
- Insurance—when it's time to store your gold, your custodian can charge storage and insurance fees individually or bundle the two into a single payment. Depending on how much gold you own, the annual cost of storage and insurance will range between $100 and $300.
Pros Of Home Storage Gold IRA
Having a home storage Gold IRA gives you more accessibility to your precious metals since you can store them in your safe. However, you must ensure the location is secured to avoid accidents and potential theft.
#2 Cost Efficiency
Choosing a home storage rather than a third-party vault is much more cost-efficient, considering that you don't need to pay storage fees and other expenses yearly. You only need to provide a professionally made safe to protect your precious metals against thieves or natural disasters.
Cons Of Home Storage Gold IRA
#1 Additional Costs On Opening An LLC
If you're considering home storage to keep your gold, you need to start a Limited Liability Company (LLC). This process incurs extra costs such as incorporation expenses, legal, annual maintenance, state filing fees, and others. This counters one of the main benefits of storing your gold at home, which is saving on storage fees. You may also need to fill out numerous forms and annual documentation regularly to ensure that you follow the laws and restrictions of your state.
#2 Security Risks
Storing your gold or other precious metals at home is not advisable since accidents happen when you least expect them. You could lose your metals in a house robbery or a house fire if you're not careful – that's why a secured third-party storage facility is recommended to protect your assets.
#3 Annual Reports
If you're considering home storage for your gold, the IRS could audit your IRA if they learn that you've kept your IRA gold outside of a recognized banking institution. You must maintain detailed records of your precious metals, including the date of purchase, asset price, and market value. If you fail to comply with these requirements, you may face penalties and legal consequences during an audit.
#4 Withdrawal Penalties
If you withdraw funds from your home storage gold IRA before you turn 59 ½, you'll be subject to a 10% early withdrawal tax penalty. Income taxes will also be applied to your distributions, depending on how much you withdraw and your income tax bracket.
A home storage gold IRA allows investors like you to store precious metals like gold and silver in the comfort of your home. This service may provide you with potential benefits such as accessibility and cost-efficiency. However, potential drawbacks include the need to set up an LLC to provide detailed annual reports to the IRS and the high risk of possible withdrawal penalties.
Therefore, if you choose a home storage rather than a third-party facility to store your gold or other precious metals, you must be ready to follow the strict rules and regulations of the IRS, including having proper storage space and buying insurance. All of this can offset most of the benefits of keeping your gold at home for most people. However, if you’re a high-net-worth individual looking to add more leverage to your investment portfolio, a home storage gold IRA may be just what you’re looking for.
Home Storage Gold IRA FAQs
Is a home storage gold IRA worth it?
Yes, a home-storage gold IRA is worth it if you want to take full possession of your physical gold bullion at home. However, it can have disadvantages. These include contribution limits and low returns compared to other investments, and accidents like fires and robberies might still happen, even if you follow the requirements from the IRS to store your precious metals at home.
Is a home storage gold IRA safe?
No, a home storage gold IRA is not safe. According to the IRS, your precious metals, such as gold, silver, palladium, or platinum, must be stored in an IRS-approved depository to protect them from theft or damage. If you kept them at home, you could face distribution penalties and taxes, as taking out your assets without a custodian is considered a distribution.
Is a home storage gold IRA legit?
Yes, a home storage gold IRA is legit. Some self-directed IRA companies offer home storage services that allow you to store your gold or other precious metals at home. However, you should be aware of the risks and requirements involved for it to be recognized as legal by the IRS.
How do you store gold IRAs at home?
You can store your gold IRAs at home by shielding them from extreme humidity and temperature changes. A lock-enabled jewelry box or a safe are excellent investments for keeping and safeguarding jewelry and other tiny gold items.
What is the downside of storing your gold IRA at home?
The downside of storing your gold IRA at home is tax penalties and possible criminal charges. If you don't follow the requirements and it is not suitable to keep your gold at home, you could face hefty penalties and criminal charges. Also, if the IRS discovers a flaw in your setup, your assets will lose their tax-free status as an IRA and be fined 10% for early withdrawal since it's already considered a distribution.
Do you pay taxes on home storage gold IRAs?
Yes, you pay taxes on your home storage gold IRAs. The tax that you'll be spending depends on the specific IRA that you've chosen. If you choose a Traditional IRA, your contributions are tax-deductible, which helps lower your taxable income for the year. On the other hand, if you chose a Roth IRA, your deposits are after-tax, meaning you'll be paying taxes upfront so that your withdrawals are tax-free when you retire.