Federal employee gold IRA: who it suits and who it doesn’t

Where it tends to fit

• You can actually move the money. You've separated, or you're 59½ or older and can take an age-59½ in-service withdrawal. Under 59½ and still working, there is no route.
• The slice clears the minimum with room to spare. Goldco asks for $25,000, Augusta $50,000. Flat yearly fees are a smaller share of a larger balance.
• You want to own the metal itself, coins or bars you can see listed on a statement, rather than a fund that tracks a price.
• You won't need it as cash soon. Every sale costs you the dealer's spread, so short holding periods are the expensive ones.
• The rest of your retirement money stays where it is. Most people who make this move roll over a part of the TSP, not the whole account.

Where it tends not to

• You left at 55 or later and may need the money before 59½. Payments from the TSP after separating in or after the year you turn 55 avoid the 10% early withdrawal tax. The IRS exception doesn't apply to IRAs, so the same withdrawal from a gold IRA generally would be taxed extra.
• The amount is small. On Equity Trust's schedule a gold IRA costs about $235 a year to hold, whatever its size. The TSP's funds cost cents per $1,000.
• You want income. Metal pays no interest or dividends. A traditional gold IRA still has RMDs from 73 or 75; the IRS lets them be taken from another traditional IRA you own, and without one the gold IRA has to sell metal or distribute coins.
• You're being hurried. The CFTC's precious-metals fraud advisory lists a false sense of urgency, and promises of easy profit, among its warning signs. A real offer will still be there next week.
• You'd like someone with a duty to you. The TSP's leaflet Keeping Score? says the TSP has a fiduciary obligation to put your interests first. A metals dealer is a seller. American Hartford Gold and Birch Gold Group say their sales staff are paid on commission; Augusta says its educators are salaried without product-specific commissions.

Five questions to answer first

1. Which door is open to me: separated, or 59½+ and still working?
2. How much would I move, and is it money I won't need for years?
3. Did I leave in or after the year I turned 55? If so, what might I need before 59½?
4. Traditional, Roth or both? Roth money needs a Roth IRA; traditional money goes to a traditional IRA or, taxed that year as a conversion, to a Roth one.
5. What will the custodian, the storage and the dealer's markup cost me, in writing?

If the answers are "separated or 59½+", "a slice I won't touch", "not an issue", "I know which" and "I have the numbers", the step-by-step worksheet takes it from there.

What a self-directed custodian does and doesn't do

A gold IRA is a self-directed IRA: a custodian holds the account, a depository holds the metal, and a dealer sells it to you. The SEC's Office of Investor Education and Advocacy and NASAA put out an investor alert on these accounts. Its central point is that self-directed IRA custodians generally do not evaluate the quality or legitimacy of an investment or its promoters. That job is yours.

In practice: check the dealer's BBB file and any regulator actions, ask for every fee and markup in writing, and make sure the products are IRS-eligible and stored by an approved trustee, not at home. Gold IRA Companies Ranked keeps those records company by company, starting with Goldco, and this breakdown lists Goldco's charges.

Staying in the TSP is a real option

Nothing obliges you to take money out of the TSP when you retire. tsp.gov says you can keep the account as long as you like, until RMDs begin, and many participants do because of its low-cost funds. You still control how it is invested and can still roll other plans into it. If a gold IRA doesn't clearly fit, leaving the TSP alone is a perfectly sound outcome of this worksheet.

For the cost side in detail, see the two cost models side by side. For a general write-up of rolling a workplace plan into metal, see Gold IRA Companies Ranked.