Gold IRA Rollover: Read This Before You Rollover 401k or IRA
What a Gold IRA Rollover Is
A gold IRA rollover is an account where you transfer one IRA to another account. A quick refresher, IRA stands for Individual Retirement Account. These are retirement accounts established by Congress to help Americans plan for their retirement. This is supposed to be a purely personal and private way to help you prepare for your retirement.
Most typical American employees are protected in their retirement years by Social Security and also their employer’s pension plan. However, thanks to the soft economy and economic uncertainty, one cannot rely on an employer pension plan to be there when you are aged sixty five or older. Also, it has been a current corporate trend in the United States for companies to raid their pension plans.
If you have a father or a grandfather who retired with a huge fat pension plan from their private employer, rest assured that those days are gone. More likely than not, you will retire with no private pension plan at all. You can rely on Social Security but Social Security can only protect you against your future expenses to a certain extent. If you really want to be pro-active about protecting your income after you reach retirement age, you need to set up an IRA or a 401(k). You should also go one step further and consider rolling over your IRA or 401(k) to gold or even silver.
You might be asking, why do people need to do this, can they not just set up one central IRA? The problem is most Americans shift jobs. In fact, the typical American has at least nine different jobs in his or her lifetime. If this is the average, can you imagine how many jobs you will need to go through before reaching retirement age? This causes a bit of a problem because each of these employers have IRA programs that you can contribute to. If you have been moving from job to job, you need a way to pool all accumulated assets and funds from all these IRAs that you have gathered over the years. This is where the IRA rollover account comes in. You basically start with one job and then you end that job and you rollover the funds to the IRA rollover account.
Rolling Your IRA Over to a Precious Metals IRA
Before you move your IRA to gold, the account is usually a non-gold IRA account that was rolled-over to a gold IRA account. This is fairly straight forward. For the most part, most Americans do not invest primarily in precious metals. Unlike China, Taiwan and India, Americans tend to invest mostly in equities or stocks and bonds. Due to the higher appreciation rate and potential explosive growth of these types of investments, Americans tend to restrict themselves to these types of investments for their IRA. However, if you are looking for an investment that has been reliable and stable during its lifetime you should consider gold or silver when rolling over your IRA. The IRA has to be designated as a precious metals IRA.
The Process of Rolling Over Your IRA
In this image we can see just how the process works when it comes to buying precious metals such as gold or silver for your IRA.
Three Ways to Invest in Precious Metals
Once your gold IRA rollover account has been created with your certified IRA custodian, your next step is to take the amount of money that was transferred to you from your previous non-gold accounts and fund your new IRA. You can then use these funds to buy gold of your choice. Keep in mind that there are three major ways you can buy gold. The most practical way, of course, is through ETF.
Investing Through ETFs
The beauty of ETF is that among all the ways that you can invest in gold, this is probably the purest play. In other words, most of the money that you will be investing in gold ETF go to the actual price of the precious metal. It does not go to fees, it does not go to all administrative cost and it definitely does not go to company hype. The great thing about a gold ETF is it allows you to make a pure play with gold. Of course there is still a small fee involved, but it is the purest play among your other gold trading options.
Utilizing Gold/Silver Mining Stocks
The next most popular way to trade in gold for IRA purposes is to buy the stocks of gold mining companies. There are some gold miners that track the price of gold and provide solid value over a long period of time. The main reason why people invest in gold miners is that they are protected in two ways, when the price of gold spikes up because the economy tanks or there is a stock market crash, the price of some gold miners go up. In other words, their stock does not sink unlike their other non-gold stocks.
The other reason why people invest in gold mining stocks is that you are still investing in stock. It just happens to be the stock of a mining company. This may be good news or bad news, depending on your tolerance for risk. Stocks are inherently risky because at some level you are betting money on hype. You are betting money on potential. This explains why ridiculously over valued companies like Twitter and Facebook command the stock prices that they command. It is all about hype and promotion. With that said, you can actually earn quite a bit investing in gold stocks.
Physical Precious Metals
Another way you can invest in gold is to invest in physical metal. This is the most direct way to buy gold, however, you have to be careful of the fees whether buying in or selling out. There are many websites that sell precious metals in the form of coins and bars. The different types of metals include gold, silver, platinum, and palladium.
Rollover Your 401(k) to a Gold or Silver IRA
If you own a 401(k) and are wondering how to transfer a 401(k) to gold you can rest easy knowing that you can still benefit from a precious metals IRA as you can transfer your 401(k) to gold. Not only is this great for retirement but taking advantage of this and converting your account is one of the easiest ways to benefit from precious metals.
There are a few ways you can go about rolling your 401(k) into gold or silver. But first you will need to rollover your 401(k) to an IRA account. This process isn't as hard as it may seem!
Under a Former Employer
If you have a 401(k) that is from a company or various companies that you have worked for in the past, you can roll over the funds into a Traditional IRA. From there you can benefit from metals such as gold or silver by rolling over your new IRA account.
Using an In-Service Distribution
If you are still working at a company that house your 401(k) account there is a chance that you could move those funds and take advantage of them. This process is known as an In-service Distribution and works by rolling over your funds from the 401(k) to a Self-directed IRA (within 60-days) and you won’t suffer from tax consequences. Too get started with this process you will need to ask your current provider to see if your plan offers an in-service distribution. If you want to speak with an expert, we recommend signing up for a kit that will lay out the entire process for you. That can be found at the bottom of the post or on the side!
Requesting From Your Employer
If you asked your provider and realize that your plan does not support an in-service distribution, you will have a few options to work off of. For one you can get in touch with your employer by speaking with your Human Resources Department and then asking that precious metals be included in the 401(k) plan your company has. As stated above, this may sound a bit confusing to you so we recommend that you speak with a professional who is familiar with the process.
Business Owners With a 401(k) Account
Owners of companies can also utilize a metals IRA by starting a plan that includes a gold 401(k) and a silver 401(k). The business owner and the employees of the company can roll their retirement funds to the new bullion savings plan. Taking part in this method will maximize the amount that can be contributed annually. This would be on a pre-tax or a post-tax basis for long-term savings in retirement.
Once you have switched over your account, you will be able to buy physical gold with your 401(k). This process is very easy to get started with as there are specialists who can help you through this entire process. Simply call the number at the top of the screen or visit their website from this page.
Considering Your 401(k) or IRA Accounts for Retirement
If retirement is on your mind you are already in the right place if you are looking to put your money somewhere safe. When considering retirement for your 401(k) or your IRA you need to remember a few things. For one you should avoid purchasing an annuity as they are already tax deferred so you don't gain any additional tax savings. Our next recommendation is to look out for any non-liquid investments as they can be tough to sell. This can become a major problem if you need to sell at a certain time and your investment decisions are slowing that process down. The final tip when investing for your retirement is to invest in not one but multiple investment streams. It is better to keep your investments diverse so you don't "Put everything into one basket" which can cause problems down the road.
We will all face retirement at some point in our lives. That's why it is important to plan beforehand and make intelligent investments to benefit yourself in your golden years.
Keep in mind that the federal law governing IRAs and individual private pensions allow for all funds that you are rolling over to be transferred to your account. You have to be very careful about this. This is not your personal account that you could withdraw from. Sure, you can withdraw from this pool of money; however you will be facing a stiff penalty. You have to remember, the main reason IRAs are set up is to help people plan for their retirement. It is not supposed to be a pool of money that you can withdraw at any time. If you go about raiding your own IRA fund, you will be surprised at how step the penalties are. The penalties have a lot of teeth because they are intended to force you to save.
Rollover Your Thrift Savings Plan (TSP) to a Gold IRA
A TSP is a retirement income meant for uniformed military personnel as well as civilian employees. This plan is similar to a 401(k) account that is offered by businesses. If you have a TSP account, it can be rolled over from a TSP to an IRA from which you can invest in precious metals such as gold and silver. To read more about your options with a TSP account, download our TSP ebook, "How Your Thrift Savings Plan is Costing You Money!" or call one of our representivies to help you get started.
Requesting a Starter Kit & Speaking With a Professional
If you are looking for the best IRA custodial company and are ready to set up a gold rollover account, you should contact a specialist to go through the process. On top of that, you will receive your very own gold kit to help you get started.
The Best Gold IRA Companies
With so many different companies to choose from, it can be tricky and time consuming to choose one. However, if you want to work with a company that has a A+ rating in BBB and some of the lowest fees in the industry, we recommend you order a free investment kit to get started.
Best Gold IRA Deals
How does a flat fee of $250.00/year for storage sound? The fee breaks down to $100.00 for administration fees and then $150.00 for segregated storage of metals. Best part is they pay the first years dues for retirement accounts! Get started above.