SEP Gold IRA: Investing in Gold Through a SEP IRA
A SEP IRA can be used to purchase physical gold for retirement diversification. A Gold SEP IRA transfer allows investors to hold gold and other precious metals in their retirement, benefiting from the tax benefits.
Gold IRA Planners explains the process of converting your SEP IRA to gold, from how it works to the steps to transfer your SEP IRA to a Gold IRA.
What is a SEP IRA & Can It Hold Gold?
A SEP IRA (Simplified Employee Pension) is a type of Traditional IRA that administers contributions made by an employer under a SEP plan. Both receiving employer contributions to a SEP IRA and making regular annual contributions to a traditional or Roth IRA is possible. These tax-advantaged retirement plans are for self-employed individuals, business owners, and employers.
A SEP IRA is not allowed to hold gold directly and must be converted to a self-directed Gold IRA, which can be a SEP IRA assuming it is self-directed.
Contribution Limits
Employers may contribute up to 25% of an employee's annual compensation or a maximum of $70,000 for 2025. For self-employed professionals, "compensation" equals net earnings minus half of self-employment tax and any personal IRA contributions.
Account Eligibility
Employers set up a SEP IRA using IRS Form 5305-SEP. While default eligibility requires employees to be age 21, earn at least $750 in compensation during the prior year, and have worked at least three of the last five years, employers may lower these requirements for eligible employees (Such as age 18 and 6 months of service). Only employers can fund SEP IRAs and employees do not contribute. Prohibited investments in a SEP IRA includes certain insurance contracts and specific securities.
Withdrawals
Distributions taken before age 59½ incur a 10% penalty plus ordinary income tax. RMDs must begin at age 72, 73, or 75, depending on birth year. Failure to withdraw the RMD triggers a 25% excise tax on the undistributed amount (reduced to 10% if corrected promptly).
Converting a SEP IRA to Gold: How It Works
A SEP IRA can be transferred into a self-directed Gold IRA without penalty, allowing you to hold IRS-approved physical metals in retirement. The process typically takes about two weeks from account opening to funding and metal purchase with your. A self-directed IRA is required when investing SEP IRA savings in tangible assets like gold, silver, or platinum.
3 Steps to a Gold SEP IRA
To convert your SEP IRA to a Gold IRA, there are three steps:
1. Open a Self-Directed Gold IRA
To invest in gold with a SEP IRA, first you will need to open a self-directed IRA with your chosen Gold IRA company. This can either be a traditional self-directed IRA or a SEP IRA to hold gold. This specific type of IRA is required in order to invest funds into physical gold.
2. Transfer SEP IRA Funds
Next you will convert your SEP IRA funds to the new self-directed IRA. You'll either do a transfer or a rollover, depending on your investment goals. Transfers are more common with SEP IRAs, but rollovers are possible too if you need access to the funds directly. The rollover process is similar to other accounts and employer-sponsored retirement plans. The in-depth overview of rollover/transfers to Gold IRAs is found here.
3. Purchase IRS-Approved Gold & Silver
Once the new self-directed Gold IRA is set up with the SEP IRA funds, you can finally purchase IRA-eligible precious metalsa> like gold bullion, silver, platinum, and palladium. These metals will be stored in an IRS-approved secure depository, managed by a custodian. Don't worry though, the company you work with will help you through this 3-step process of holding gold with your SEP IRA. You can read up on the key rules to hold gold in your retirement so when metals are purchased, the process is clear.
Costs to Move SEP IRA to Gold
There are account fees that come with converting a SEP IRA to gold, including setup fees, annual maintenance fees, and storage fees. Depending on the company you choose to open a Gold IRA with, you may be able to get all these fees waived as long as you meet their minimum investment requirements. We detail how this investment process works in our .
SEP IRA vs a Gold IRA
A SEP IRA holds only paper-based assets like stocks, ETFs, and mutual funds, heavily tied to the financial markets. Investment choices are usually limited to what is available by the provider. By moving SEP IRA funds to a self-directed IRA, investing in gold can allow for a more diversified retirement portfolio in more than just paper assets. You can speak with your financial professional to plan your investment portfolio in multiple assets so you can take advantage of these different investment options.
Like SEP IRAs, Gold SIMPLE IRAs can also be set up to hold gold in a self-directed SIMPLE IRA, but have different rules and timelines.
Before Converting Your SEP IRA, Plan Ahead With Gold IRA Planners
Before you convert your SEP IRA to a physical Gold IRA, make sure you are planning your retirement investment strategy. Gold IRA Planners makes it easy to learn about Gold IRAs before you start moving funds to physical assets like precious metals. Our precious metals specialists provide regularly updated resources and guides.