WEBVTT 00:00:00.000 --> 00:00:03.319 OK, let's unpack this. We're diving deep today, 00:00:03.319 --> 00:00:06.040 looking at just one source. Right, a single article. 00:00:06.160 --> 00:00:08.960 It's titled, how does a gold IRA work when you 00:00:08.960 --> 00:00:11.720 retire? Yeah. And the listener who sent this 00:00:11.720 --> 00:00:14.240 in is clearly thinking about the practical side, 00:00:14.939 --> 00:00:16.800 the nuts and bolts of actually getting to their 00:00:16.800 --> 00:00:20.059 gold IRA money later on. Absolutely. So our mission 00:00:20.059 --> 00:00:21.940 here is really just to pull out the essentials 00:00:21.940 --> 00:00:23.879 from this article. What are the rules for taking 00:00:23.879 --> 00:00:27.359 money out? What about taxes? And how do you actually 00:00:27.359 --> 00:00:31.510 get the distributions? cash or, we're sticking 00:00:31.510 --> 00:00:33.590 only to what this piece tells us. Exactly. No 00:00:33.590 --> 00:00:36.429 outside info today, just this map. Okay, so let's 00:00:36.429 --> 00:00:39.670 jump right in. First big question. How do you 00:00:39.670 --> 00:00:41.770 actually start taking money out, taking those 00:00:41.770 --> 00:00:43.670 distributions? Well, the article kicks off with 00:00:43.670 --> 00:00:45.310 the key timing. It says the earliest you can 00:00:45.310 --> 00:00:47.170 start taking withdrawals without a penalty is 00:00:47.170 --> 00:00:50.950 age 59 and a half. 59 and a half, okay. And what 00:00:50.950 --> 00:00:52.829 if you need the money sooner? Is there a penalty? 00:00:53.480 --> 00:00:56.780 Uh, yes. According to this source, if you withdraw 00:00:56.780 --> 00:00:59.600 before 59 and a half, you might face a 10 % penalty. 00:00:59.979 --> 00:01:02.439 Yeah, it says may incur, and mentions there are 00:01:02.439 --> 00:01:05.319 exceptions, but this article doesn't actually 00:01:05.319 --> 00:01:07.719 spell out what those exceptions are. OK, so the 00:01:07.719 --> 00:01:10.680 takeaway here is, generally, expect a potential 00:01:10.680 --> 00:01:13.519 10 % hit if you're under 59 and a half. That's 00:01:13.519 --> 00:01:15.379 the main point it highlights for early withdrawals. 00:01:15.480 --> 00:01:17.579 All right, so 59 and a half is the magic number 00:01:17.579 --> 00:01:20.159 to avoid that early penalty. What about the time 00:01:20.159 --> 00:01:21.859 after that, but before you have to take money 00:01:21.859 --> 00:01:24.900 out? Good question. The article notes there's 00:01:24.900 --> 00:01:27.540 a window basically between 59 and a half and 00:01:27.540 --> 00:01:30.519 age 73. And during that time. It's pretty flexible. 00:01:30.799 --> 00:01:34.019 The amount you decide to withdraw then is basically 00:01:34.019 --> 00:01:35.879 up to you. But that flexibility doesn't last 00:01:35.879 --> 00:01:38.280 forever, does it? No, it doesn't. The article 00:01:38.280 --> 00:01:41.840 points out that at age 73, things change. That's 00:01:41.840 --> 00:01:46.159 when required minimum distributions or RMDs kick 00:01:46.159 --> 00:01:49.099 in. Ah, the RMDs. So those are mandatory for 00:01:49.099 --> 00:01:51.680 traditional accounts. Yes. For traditional IRAs, 00:01:52.040 --> 00:01:53.879 including traditional gold IRAs, you have to 00:01:53.879 --> 00:01:55.859 start taking them. It's not optional at that 00:01:55.859 --> 00:01:57.680 point. And, you know, the article seems to really 00:01:57.680 --> 00:01:59.859 stress thinking about the bigger picture when 00:01:59.859 --> 00:02:01.780 you're planning these distributions. It does. 00:02:01.859 --> 00:02:05.760 It emphasizes looking at your... your total retirement 00:02:05.760 --> 00:02:09.639 income, what the tax impact might be. Makes sense. 00:02:09.740 --> 00:02:12.080 Getting it wrong could be costly. Definitely. 00:02:12.659 --> 00:02:15.080 Strategic planning is key. The article actually 00:02:15.080 --> 00:02:17.599 suggests, you know, maybe talking to a financial 00:02:17.599 --> 00:02:20.419 advisor could be helpful for mapping out a strategy 00:02:20.419 --> 00:02:22.759 that fits your specific situation. Okay, good 00:02:22.759 --> 00:02:25.680 advice. Let's focus in on those RMDs then, the 00:02:25.680 --> 00:02:29.219 ones starting at 73. Why does the IRS even require 00:02:29.219 --> 00:02:31.199 them? What's the logic, according to the source? 00:02:31.319 --> 00:02:33.919 Well, the article explains the why behind it. 00:02:34.060 --> 00:02:36.879 Essentially, the IRS doesn't want funds sitting 00:02:36.879 --> 00:02:39.159 in tax -deferred accounts forever, right? They 00:02:39.159 --> 00:02:41.599 want their tax revenue eventually. Exactly. So 00:02:41.599 --> 00:02:44.680 starting at age 73, they mandate these withdrawals 00:02:44.680 --> 00:02:47.199 to ensure that taxes eventually get paid on that 00:02:47.199 --> 00:02:48.939 money. OK, that makes sense. And the timing. 00:02:49.060 --> 00:02:50.960 How specific does the article get on when you 00:02:50.960 --> 00:02:52.900 have to take these RMDs? It's quite precise. 00:02:53.020 --> 00:02:56.379 Your very first RMD that's due by April 1st of 00:02:56.379 --> 00:02:59.129 the year after the year you turn 73. April 1st 00:02:59.129 --> 00:03:01.889 of the year following 73. Okay. But then for 00:03:01.889 --> 00:03:03.930 all the following years the deadline is December 00:03:03.930 --> 00:03:07.289 31st. Gotcha. December 31st each year after that 00:03:07.289 --> 00:03:09.889 first one. Now here's something interesting the 00:03:09.889 --> 00:03:12.689 source brought up. A difference for Roth Gold 00:03:12.689 --> 00:03:16.400 IRAs. Yes. This is a really key distinction mentioned 00:03:16.400 --> 00:03:19.680 in the article. Rothgold IRAs do not have RMD 00:03:19.680 --> 00:03:22.020 requirements for the original owner during their 00:03:22.020 --> 00:03:25.139 lifetime. Wow, OK, no RMDs for Roth during your 00:03:25.139 --> 00:03:27.020 life? Yeah. It's a huge planning point. It's 00:03:27.020 --> 00:03:28.900 a major difference, yeah. All right, now for 00:03:28.900 --> 00:03:31.800 the scary part. What happens if you mess up, 00:03:32.020 --> 00:03:34.740 if you miss an RMD, or maybe don't take out enough? 00:03:35.419 --> 00:03:37.620 Yeah, the article definitely flags this. Missing 00:03:37.620 --> 00:03:41.180 an RMD can be... very expensive. It calls the 00:03:41.180 --> 00:03:44.259 penalty one of the IRS's harshest fines. Harsher. 00:03:44.379 --> 00:03:46.680 What's the actual penalty? If you don't take 00:03:46.680 --> 00:03:48.900 the full required amount, so the difference between 00:03:48.900 --> 00:03:51.139 what you should have taken and what you did take, 00:03:51.300 --> 00:03:54.199 that's the shortfall, the penalty can be 25 % 00:03:54.199 --> 00:03:57.639 of that shortfall amount. 25 %? Ouch. It's significant. 00:03:58.219 --> 00:04:00.219 The article does add a little context, though. 00:04:00.520 --> 00:04:02.900 It mentions the Secure 2 .0 Act actually reduced 00:04:02.900 --> 00:04:05.400 this penalty. It used to be 50%, but it dropped 00:04:05.400 --> 00:04:08.759 to 25 % starting in 2023. Still hefty, but better 00:04:08.759 --> 00:04:11.879 than 50%. Definitely. And there's another potential 00:04:11.879 --> 00:04:14.860 break mentioned. If you make a mistake but correct 00:04:14.860 --> 00:04:18.040 it within two years, meaning you take out the 00:04:18.040 --> 00:04:20.759 missed amount, the penalty might be reduced further, 00:04:20.800 --> 00:04:23.519 down to 10%. OK. So there's a chance to fix it, 00:04:23.519 --> 00:04:26.540 but still, best to avoid the mistake altogether. 00:04:26.800 --> 00:04:28.660 Absolutely. Getting it right the first time is 00:04:28.660 --> 00:04:30.839 the way to go. So how do you get it right? How 00:04:30.839 --> 00:04:33.459 do you figure out the exact RMD amount? Does 00:04:33.459 --> 00:04:35.240 the article lay that out? It does. It gives a 00:04:35.240 --> 00:04:37.610 three -step process based on the source. Step 00:04:37.610 --> 00:04:40.629 one, figure out your account balance. Which balance? 00:04:40.990 --> 00:04:43.790 Specifically, the fair market value of your gold 00:04:43.790 --> 00:04:46.930 IRA as of December 31st of the previous year. 00:04:47.089 --> 00:04:49.470 Okay, end of the prior year. Who tells you that 00:04:49.470 --> 00:04:52.199 value? The article stresses that your custodian 00:04:52.199 --> 00:04:54.420 is key here. They should provide you with that 00:04:54.420 --> 00:04:57.120 specific U .N. valuation for your gold holdings. 00:04:57.500 --> 00:04:59.839 Got it. December 31st value from the custodian. 00:05:00.079 --> 00:05:02.600 What's step two? Step two is finding your life 00:05:02.600 --> 00:05:05.300 expectancy factor. The article says you get this 00:05:05.300 --> 00:05:08.180 from the IRS's uniform lifetime table. Uniform 00:05:08.180 --> 00:05:11.079 lifetime table. And the factor you use is based 00:05:11.079 --> 00:05:12.680 on your age at the end of the year you're taking 00:05:12.680 --> 00:05:15.899 the R &D for. Think of it as the IRS's estimate 00:05:15.899 --> 00:05:18.949 of you know, average remaining lifespan for someone 00:05:18.949 --> 00:05:20.790 your age. And that factor changes as you get 00:05:20.790 --> 00:05:23.029 older. Right. It decreases as you age, which 00:05:23.029 --> 00:05:25.250 makes sense. Which means if you're dividing by 00:05:25.250 --> 00:05:28.000 a smaller number... The RMD amount itself gets 00:05:28.000 --> 00:05:30.399 bigger over time, relatively speaking. Exactly. 00:05:30.560 --> 00:05:33.259 It forces more money out as you age. So step 00:05:33.259 --> 00:05:35.500 three is the calculation itself. The formula 00:05:35.500 --> 00:05:38.939 is RMD equals your prior year -end account balance 00:05:38.939 --> 00:05:41.259 divided by that life expectancy factor. It's 00:05:41.259 --> 00:05:43.000 a simple division. Does it give an example? Yep. 00:05:43.160 --> 00:05:44.560 The article walks through one. Let's say your 00:05:44.560 --> 00:05:47.800 IRA balance was $250 ,000 at the end of last 00:05:47.800 --> 00:05:50.519 year. OK. $250 ,000. And let's say based on your 00:05:50.519 --> 00:05:52.720 age this year, your life expectancy factor from 00:05:52.720 --> 00:05:57.180 the IRS table is 24 .6. You calculate $250 ,000 00:05:57.180 --> 00:05:59.519 divided by 24 .6. Which comes out to, the article 00:05:59.519 --> 00:06:03.480 says $10 ,162 .60. Precisely. So in that example, 00:06:03.680 --> 00:06:07.180 your RMD for the year would be $10 ,162 .60. 00:06:07.720 --> 00:06:09.720 You'd have to withdraw at least that much to 00:06:09.720 --> 00:06:12.060 satisfy the requirement. Okay, that calculation 00:06:12.060 --> 00:06:16.389 seems clear enough. Now beyond when and how much 00:06:16.389 --> 00:06:18.810 the source also talks about how you actually 00:06:18.810 --> 00:06:22.129 receive the money or the gold two main ways That's 00:06:22.129 --> 00:06:25.250 right. The article outlines two primary methods 00:06:25.250 --> 00:06:29.750 a cash distribution or an in -kind distribution 00:06:29.750 --> 00:06:32.009 cash distribution sounds straightforward It is 00:06:32.009 --> 00:06:34.449 basically you tell your custodian to sell some 00:06:34.449 --> 00:06:37.240 of your gold holdings They sell it, and you receive 00:06:37.240 --> 00:06:39.740 the cash proceeds. Which gives you liquid cash, 00:06:39.879 --> 00:06:42.259 obviously. But the article mentions potential 00:06:42.259 --> 00:06:44.879 downsides. Yeah, it notes you might have selling 00:06:44.879 --> 00:06:47.500 fees involved, charged by the custodian or dealer, 00:06:47.699 --> 00:06:50.339 perhaps? And of course, the cash you receive 00:06:50.339 --> 00:06:53.040 is taxable income, which we'll get to. Okay. 00:06:53.279 --> 00:06:56.139 And the other option, in -kind. In -kind distribution 00:06:56.139 --> 00:06:58.420 means you take direct physical possession of 00:06:58.420 --> 00:07:01.120 the actual gold, the coins or bars themselves. 00:07:01.259 --> 00:07:03.399 So you literally get the metal shipped to you. 00:07:03.550 --> 00:07:05.589 or you pick it up. The article implies you take 00:07:05.589 --> 00:07:08.110 physical possession, yes. The benefit mentioned 00:07:08.110 --> 00:07:09.970 is that you retain ownership of the actual gold. 00:07:10.089 --> 00:07:12.089 You could hold onto it, maybe hoping its value 00:07:12.089 --> 00:07:13.790 goes up. But then you're responsible for it, 00:07:13.970 --> 00:07:17.310 right? Yeah. Storage, insurance. Exactly. The 00:07:17.310 --> 00:07:19.250 article points out that secure storage becomes 00:07:19.250 --> 00:07:22.850 your problem once you take it in kind. So, boiling 00:07:22.850 --> 00:07:25.850 it down based on this source, cash gives you 00:07:25.850 --> 00:07:29.589 immediate funds, but you sell the gold. InKind 00:07:29.589 --> 00:07:31.949 lets you keep the physical gold, but you have 00:07:31.949 --> 00:07:34.449 to store it and you don't get immediate cash. 00:07:34.670 --> 00:07:37.529 That's the core trade -off presented. The article 00:07:37.529 --> 00:07:40.149 suggests the choice really hinges on your own 00:07:40.149 --> 00:07:42.430 financial goals, your view of the gold market 00:07:42.430 --> 00:07:44.769 at the time, and what you need for retirement 00:07:44.769 --> 00:07:47.269 income. And again it loops back to maybe getting 00:07:47.269 --> 00:07:49.550 advice. Yes, it mentions consulting a financial 00:07:49.550 --> 00:07:52.430 advisor again here to help figure out which distribution 00:07:52.430 --> 00:07:54.949 method aligns best with your personal situation. 00:07:55.110 --> 00:07:57.189 Right, makes sense. Now let's hit that crucial 00:07:57.189 --> 00:07:59.639 topic that weaves through all of this. taxes. 00:08:00.240 --> 00:08:02.139 How does the article explain the tax implications? 00:08:02.339 --> 00:08:04.220 This is absolutely critical. The article states 00:08:04.220 --> 00:08:06.500 very clearly that distributions from a traditional 00:08:06.500 --> 00:08:09.759 gold IRA are taxed as ordinary income. Ordinary 00:08:09.759 --> 00:08:12.379 income. Yeah. Just like withdrawals from a regular 00:08:12.379 --> 00:08:15.500 traditional IRA holding stocks or bonds. Exactly 00:08:15.500 --> 00:08:17.139 the same treatment, according to this source. 00:08:17.620 --> 00:08:20.180 So if you take a cash distribution, the dollar 00:08:20.180 --> 00:08:22.360 amount you get is just added to your other income 00:08:22.360 --> 00:08:24.759 for the year and taxed at your regular rate. 00:08:24.920 --> 00:08:27.680 OK. What about the in -kind distribution? You're 00:08:27.680 --> 00:08:30.819 getting metal, not cash. How is that taxed? Good 00:08:30.819 --> 00:08:33.519 question. It's still taxable. The amount you 00:08:33.519 --> 00:08:36.759 have to report as income is the fair market value 00:08:36.759 --> 00:08:38.820 of the gold at the time you actually take possession 00:08:38.820 --> 00:08:42.500 of it. Ah, I see. So the value on the day you 00:08:42.500 --> 00:08:44.440 receive the gold. That's what the article indicates. 00:08:44.580 --> 00:08:46.940 It gives an example. If you receive physical 00:08:46.940 --> 00:08:49.879 gold that's valued at $10 ,000 on the distribution 00:08:49.879 --> 00:08:53.000 date. Then you report $10 ,000 of ordinary income 00:08:53.000 --> 00:08:56.000 for that year, even though no cash changed hands 00:08:56.000 --> 00:08:58.919 initially. Precisely. That $10 ,000 value is 00:08:58.919 --> 00:09:00.960 treated as income. And this is where that Roth 00:09:00.960 --> 00:09:02.919 difference comes back in again, right? Absolutely. 00:09:03.120 --> 00:09:05.340 The article contrasts this directly. A traditional 00:09:05.340 --> 00:09:08.639 gold IRA withdrawals taxed as ordinary income 00:09:08.639 --> 00:09:10.799 based on your tax bracket in retirement. But 00:09:10.799 --> 00:09:14.059 Roth gold IRA withdrawals. Generally tax -free, 00:09:14.299 --> 00:09:16.440 according to the source. The reasoning given 00:09:16.440 --> 00:09:18.559 is that the contributions to a Roth were made 00:09:18.559 --> 00:09:21.220 with money you'd already paid taxes on. So pay 00:09:21.220 --> 00:09:25.419 taxes now, Roth, or pay taxes later, traditional. 00:09:25.559 --> 00:09:27.480 That's the fundamental trade -off highlighted. 00:09:27.820 --> 00:09:30.320 The article really underscores why thinking about 00:09:30.320 --> 00:09:32.679 your likely tax situation in retirement when 00:09:32.679 --> 00:09:35.320 you first choose between traditional and Roth 00:09:35.320 --> 00:09:38.720 is so vital. Understanding these tax rules seems 00:09:38.720 --> 00:09:41.600 absolutely key to managing your money effectively 00:09:41.600 --> 00:09:43.940 in retirement. No question. It impacts your net 00:09:43.940 --> 00:09:46.679 income significantly. Okay, so let's try to wrap 00:09:46.679 --> 00:09:49.220 this up. What's the bottom line from this specific 00:09:49.220 --> 00:09:51.600 article? We've dug into how you actually get 00:09:51.600 --> 00:09:54.139 money out of a gold IRA once you retire. Yeah, 00:09:54.139 --> 00:09:56.320 we covered the key points from the source. That 00:09:56.320 --> 00:09:59.240 earliest penalty -free withdrawal age is 59 and 00:09:59.240 --> 00:10:01.440 a half. Right, and then the mandatory RMDs kicking 00:10:01.440 --> 00:10:05.000 in at age 73 for traditional accounts with that 00:10:06.120 --> 00:10:09.000 potentially hefty 25 % penalty if you miss them. 00:10:09.399 --> 00:10:11.559 And the mechanics of calculating those RMDs using 00:10:11.559 --> 00:10:14.139 the prior year -end balance and the IRS life 00:10:14.139 --> 00:10:16.279 expectancy factor. We also looked at the two 00:10:16.279 --> 00:10:18.500 main ways the article says you can take distributions. 00:10:19.340 --> 00:10:21.639 Selling for cash. Or taking the physical gold 00:10:21.639 --> 00:10:25.340 itself, in kind. And crucially, the tax implications. 00:10:25.980 --> 00:10:28.379 Traditional distributions are taxed as ordinary 00:10:28.379 --> 00:10:30.960 income. While rock distributions are generally 00:10:30.960 --> 00:10:33.519 tax -free. And that applies whether you take 00:10:33.519 --> 00:10:37.039 cash or in kind. It's the value that gets taxed 00:10:37.039 --> 00:10:39.279 for traditional. So this article really provides 00:10:39.279 --> 00:10:41.940 a framework for the mechanics, the rules, and 00:10:41.940 --> 00:10:45.120 the potential pitfalls, especially those RMD 00:10:45.120 --> 00:10:47.500 penalties. It does. And connecting it to the 00:10:47.500 --> 00:10:49.980 bigger picture, it really drives home that your 00:10:49.980 --> 00:10:52.440 gold IRA strategy can't just be about buying 00:10:52.440 --> 00:10:54.879 the gold. You need a plan for getting the value 00:10:54.879 --> 00:10:56.879 out eventually. And that plan has to consider 00:10:56.879 --> 00:11:00.799 the when. the how cash or in kind, and how it 00:11:00.799 --> 00:11:03.039 all fits with your taxes and overall finances. 00:11:03.700 --> 00:11:06.259 Exactly. The choices you make about distributions 00:11:06.259 --> 00:11:08.879 directly impact your retirement income stream. 00:11:09.480 --> 00:11:11.039 You know, this brings up an interesting final 00:11:11.039 --> 00:11:14.360 thought, something to maybe ponder. The RMD is 00:11:14.360 --> 00:11:16.639 calculated based on the gold's value at the end 00:11:16.639 --> 00:11:19.740 of the previous year. Right, December 31st value. 00:11:20.059 --> 00:11:22.000 But you might not actually take the distribution. 00:11:22.269 --> 00:11:24.509 especially if you're deciding between cash or 00:11:24.509 --> 00:11:27.149 in -kind until later in the current year when 00:11:27.149 --> 00:11:30.129 the price of gold might have changed maybe significantly. 00:11:30.649 --> 00:11:33.549 That's a real possibility. So how does that potential 00:11:33.549 --> 00:11:36.389 fluctuation in gold price between the valuation 00:11:36.389 --> 00:11:39.750 date for the RMB calculation and the actual distribution 00:11:39.750 --> 00:11:42.870 date affect your strategy? Especially when choosing 00:11:42.870 --> 00:11:45.750 between taking cash versus physical gold to meet 00:11:45.750 --> 00:11:48.490 that specific RMG dollar amount and thinking 00:11:48.490 --> 00:11:51.649 about the resulting tax liability. Yeah, that's 00:11:51.649 --> 00:11:54.509 a complex interplay. How market volatility between 00:11:54.509 --> 00:11:56.850 the calculation point and the distribution point 00:11:56.850 --> 00:12:00.009 factors into satisfying the IRS and your own 00:12:00.009 --> 00:12:02.350 financial goals. Definitely something worth thinking 00:12:02.350 --> 00:12:04.289 more about when planning your own retirement 00:12:04.289 --> 00:12:04.570 journey.