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You can use a gold IRA rollover to reallocate some of your retirement savings from stocks, bonds, and cash into physical gold, silver, platinum, or palladium. The move can improve the long-term health of your portfolio, but it comes with potential pitfalls. Minimize your risk by learning about the most common gold IRA mistakes and how to avoid them.

Violating the 60-day rule is the most common IRA rollover mistake, according to Jillian Stephenson, CPA and assistant teaching professor at Carnegie Mellon University's Heinz College.

The 60-day rollover rule applies to indirect rollovers, when the company managing your retirement account sends the funds to you by check. It’s your responsibility to deposit those funds in a new retirement account, and the IRS gives you 60 days to follow through. If you take longer than 60 days, the distribution is taxable and subject to a penalty, depending on your age.

You can sidestep the 60-day timeline by requesting a direct rollover instead. A direct rollover moves the funds from one financial institution to another. You don’t take possession of the funds and the 60-day rule doesn’t apply.

Read more: Gold IRA vs. physical gold: Which is the better investment?

Indirect rollovers also introduce the risk of incurring taxes due to underfunding your gold IRA. The problem arises because your distributions may have taxes withheld, but the withheld taxes must be included in your deposit to the new account. 401(k) plans withhold 20%, while IRAs typically hold back 10% unless you elect a different amount.

To avoid taxes on the rollover, you must deposit the full distribution amount — including the withheld taxes — into the gold IRA. For example, if you received $2,000 net of 20% withholding, you must fund the new account with $2,500. Otherwise, the $500 could be deemed a taxable distribution.

The withheld amount is credited to your annual tax liability. Assuming you had proper withholding on the rest of your income, you should get it back as a refund.

A direct rollover also solves this issue, since there is no withholding when the money goes straight into your new account.

Read more: Gold IRA tax rules: How gold IRAs are taxed

Gold and other precious metals provide diversification benefits ­that can smooth out investment performance in difficult economic cycles. But these assets can also demonstrate wild swings in value or remain stagnant for extended periods.

How precious metals impact your overall results depends on allocation, or how much you own relative to other asset types. Many experts recommend putting 5% to 15% of your holdings in gold. A trustworthy financial advisor can provide a more specific recommendation based on your situation and retirement timeline.

Gold IRAs generally cost more than conventional retirement accounts. In addition to fees for setup, making trades, and account administration, you will also pay for gold storage and insurance. These fees dilute your investment returns over time.

To land with a low-fee provider, interview and research multiple gold IRA custodians before you pick one. Request full documentation of all fees in writing so you can compare your options.

The IRS allows only one IRA-to-IRA rollover annually. This rule applies when you move funds from one account type, say a traditional IRA, to another account type, like a gold IRA. It does not apply to Roth conversions, which is a taxable funds transfer from a traditional IRA to a Roth IRA.

To comply with this rule, plan your rollover thoughtfully. If your needs change after the transaction, wait a year before making another move. Otherwise, you may owe taxes or penalties on the second rollover.

Your gold IRA holdings must be purchased by the account custodian on your behalf. You cannot deposit physical gold into a gold IRA, nor can you fund a rollover with something different than you withdrew from the old account. Typically, your first retirement account would send you cash ­— which means you must deposit cash into the second account.

In other words, don’t plan on investing your retirement distribution in gold directly. Deposit the funds in the gold IRA and purchase your precious metal assets from within the account instead.

A gold IRA rollover involves moving funds from a traditional IRA or 401(k) into a self-directed IRA. Self-directed IRAs that can hold precious metals are known as gold IRAs.

401(k) to gold IRA rollovers are not taxable if you comply with IRS requirements. You must either send the funds directly from one account to another or deposit received funds plus withheld taxes into the gold IRA within 60 days.

Contribution limits do not apply to 401(k)-to-gold-IRA rollovers.

Gold IRAs can have high fees and complex tax rules. You may pay markups on gold purchases, as well as recurring account management fees and gold storage fees. You must also comply with the IRS rules about the type of gold you can buy and how you store it.

Learn how a 401(k) rollover into a gold IRA works, including the process, IRS rules, and how account structure affects what investments you can hold.

Gold IRAs apply the tax advantages of traditional and Roth IRAs to your long-term precious metal holdings. Here's how they work.

A gold IRA is a self-directed IRA designed for gold and other precious metals. Learn the differences between it and traditional IRAs, tax implications, pros and cons, and alternatives.

A gold IRA is a retirement account that holds physical metals rather than financial securities. Here’s how it works, what metals are allowed, and how it differs from other IRAs.

A gold IRA is a type of retirement account that allows investors to hold physical precious metals. Here's how it differs from a traditional IRA.

A gold IRA and physical gold differ in liquidity, tax treatment, storage, and fees.