Gold IRA Glossary
Plain-English definitions of the terms used across Gold IRA and precious-metals retirement research. Each entry links to the deeper guide or tool where the concept is explained in full. Educational only — not financial, tax, or legal advice.
Educational only: These definitions are general educational information, not financial, tax, or legal advice. Rules, fees, and products change; verify current details with a provider and a qualified professional before making decisions. Past performance does not guarantee future results.
- Self-Directed IRA
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An individual retirement account that lets the owner hold a wider range of assets than a typical brokerage IRA, including qualifying physical precious metals. A "Gold IRA" is a self-directed IRA holding qualifying metal under an approved trustee or custodian. The self-directed structure gives broader investment choice, not personal custody of the assets.
- Custodian (or Trustee)
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The bank or IRS-approved nonbank trustee that administers the IRA and holds legal responsibility for the account. Metal owned inside an IRA must remain in the custody of a bank or approved nonbank trustee; the account owner cannot take personal possession while the metal stays in the IRA. The custodian, the dealer, and the depository may be three different companies.
- Depository
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The secure vault facility where an IRA's physical metal is stored under the custody arrangement. In common industry language a "depository under the trustee's control" means a vault used within an arrangement controlled by a qualifying bank, trustee, or custodian. The IRS approves trustees and custodians, not vault buildings as a standalone list.
- Segregated Storage
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A storage arrangement in which the specific bars or coins purchased for an account are held separately and identified as belonging to that account, so the same items are returned. It often carries a higher fee than commingled storage because of the extra handling and space required.
- Commingled (Non-Segregated) Storage
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A storage arrangement in which an account's metal is held alongside metal of the same type belonging to other customers, with the account entitled to an equivalent quantity rather than specific items. It is often less expensive than segregated storage.
- Spot Price
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The current reference market price of a precious metal for immediate delivery. It is a benchmark, not the price an investor pays or receives: a dealer generally sells above spot and buys back below spot.
- Dealer Spread (and Markup)
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The dealer markup is the amount a purchase price sits above spot; the buyback spread is the gap between the price a dealer charges to sell metal and the lower price it pays to buy it back. Each dealer sets its own. Together these mean a new purchase can begin below break-even even when the quoted spot price has not changed. The FINRA/CFTC precious-metals advisory recommends getting all fees, prices, and buyback terms in writing.
- In-Kind Distribution
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Taking metal out of the IRA as physical coins or bars rather than as cash. The fair market value of the metal distributed is generally the reportable distribution amount, so taking metal in kind does not avoid the tax that applies to a cash distribution.
- Required Minimum Distribution (RMD)
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The minimum amount that generally must be withdrawn each year from a traditional IRA once the owner reaches the applicable age (age 73 under current law, rising to 75 for people born on or after January 1, 1960). A traditional Gold IRA follows the same RMD rules as other traditional IRAs; a Roth IRA generally has no lifetime RMD for the original owner.
- Direct Rollover (vs Indirect)
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A direct rollover moves funds straight from a plan or IRA to the receiving account, generally with no federal tax withheld. In an indirect rollover the distribution is paid to the participant, and an eligible rollover distribution paid this way from an employer plan is generally subject to 20% mandatory withholding, which must be replaced from other funds to complete a full rollover within 60 days.
- IRA-Eligible Metals
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Coins and bullion that meet the IRS purity and product requirements to be held in an IRA. "IRA eligible" describes the product's eligibility; it does not grant the owner a right to keep the product personally, and qualifying bullion must remain in the physical possession of a bank or approved nonbank trustee.
- Gold/Silver Ratio
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The number of ounces of silver it takes to buy one ounce of gold, calculated by dividing the gold price by the silver price. It is a relative measure rather than a valuation: a high ratio means silver is cheap relative to gold, not that either metal is cheap in absolute terms. The ratio has moved across a wide historical range, and published long-run averages differ depending on the period and price series a source selects, so any stated average should be read together with the window it was measured over.
- Buyback Spread
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The gap between the price a dealer sells a metal for and the price the same dealer will repurchase it for. FINRA describes the mechanism directly: dealers sell above spot and buy below spot, and each dealer sets its own spread. Because entry premium and exit spread must both be recovered, the metal price returning to the original purchase price is not break-even.
- Nonbank Trustee
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An entity other than a bank that the IRS has approved to act as trustee or custodian of a retirement account under Treasury Regulation section 1.408-2(e). The IRS publishes a list of approved nonbank trustees and custodians. This approval attaches to the trustee entity, not to a vault building and not to individual coins, which is why the marketing phrase "IRS-approved depository" does not correspond to anything in the regulation.
- Checkbook IRA (IRA-LLC)
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A structure in which a self-directed IRA owns a limited liability company and the account holder manages that company, giving direct signing authority over account funds. The arrangement is used to reduce custodian transaction friction. Where it has been used to take personal possession of IRA metal, the United States Tax Court has treated that possession as a taxable distribution, most notably in McNulty v. Commissioner (2021).
- Numismatic and Proof Coins
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Coins whose price reflects collectability, rarity, condition grading or finish rather than metal content alone. They carry wider premiums on entry than common bullion and are frequently repurchased at a wider discount, so the round-trip cost is materially higher. Collectibles are generally not permissible IRA assets under IRC section 408(m), with the statute carving out specific coins and bullion meeting stated fineness standards.
- Taxable Distribution
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An amount treated as having left the IRA and become taxable to the owner. It is not a fee or a penalty applied to a continuing account: the amount is treated as distributed, with the income tax and any early-distribution consequences that follow. Taking physical possession of IRA metal is the most common way this arises unintentionally in a precious-metals IRA.
- Trustee-to-Trustee Transfer
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A movement of retirement funds directly between two custodians without the account holder taking receipt. Because the funds are never in the owner's hands, the transfer avoids the 60-day redeposit deadline and the mandatory withholding that can apply to an indirect rollover. It is the route most commonly recommended when funding a precious-metals IRA from an existing account.
- Non-Yielding Asset
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An asset that produces no regular cash income merely because it is owned. Physical gold pays no interest or dividend; its return comes only from a change in market price, after costs. This is different from a savings account, CD, or bond, which pay interest under contractual terms.
Reviewed and edited by Daniel M. — editor, 401kToGoldIRA.org. Definitions reflect the site's research methodology; report an error via the corrections policy.