Regularly putting money into an Individual Retirement Account (IRA) is a good way to save money tax-free to help you live more comfortably when you retire. The most common types of IRAs invest your money in stocks and bonds to help to grow your nest egg. But the downside of the typical IRA is in uncertain economic times that border on recession, stocks, and bonds tend to lose their value. In the last major recession, some people saw the retirement income they had in their IRAs get wiped out. To prevent that from happening, some savvy retirement savers, like my wife apparently, transfer their 401(k) into a Gold IRA.
Why Choose a Gold IRA instead of a 401(k)?
Two important reasons a growing number of people are transferring the money they’re saving for retirement from their 401(k) to a Gold IRA is stability and control. After thorough research I have found it as a well-known fact gold and other precious metals hold their value better than bonds, stocks, and currency during times of political turbulence and economic uncertainty. Wise investors invest in gold and other precious metals to create a hedge against uncertain political and economic times. During those times, gold and other precious metal may even increase in value. Gold and other precious metals are internationally accepted as a trustworthy medium of exchange.
What is a Gold IRA?
Although it is called a Gold IRA, this type of Independent Retirement Account actually invests your money in gold, silver, platinum, and palladium. They are bars, bullions, coins, ingots, or rounds and they come from national, COMEX or NYMEX certified mints. The precious metals have been processed to metals trade standards to verify their purity. They are assessed and officially recognized by the central banks and the government as 99.5% to 99.9% pure. Whatever type of metal you want your Gold IRA to be invested in, you can be sure that it is of the highest quality and can be sold anywhere in the world.
How to Rollover a 401(k) Into a Gold IRA
When you’re planning to roll over your 401kinto a Gold IRA, you have to take four very important steps. First, you need a good Gold IRA provider. Then you must select a self-directed custodian who will oversee your Gold IRA account. Next, you have to open a new Gold IRA account so the precious metals in which you invest can be placed in a storage facility that’s secure. The fourth step is processing the movement of the funds out of your 401(k)and into your Gold IRA account so the custodian can invest in the precious metals you want. The right Gold IRA provider can make the process easy.
How to Move Your 401(k) to a Gold IRA Without Penalties
There are several things you must do to transfer money from your 401(k) to a Gold IRA without incurring a penalty. First, you must create a self-directed IRA Account that has a precious metals trustee. Then, you must do a trustee-to-trustee transfer from your 401(k) account to your self-directed Gold IRA account within 60 days or less. If the process takes more than 60 days, it’s considered distribution of 401(k)funds and you are liable for taxes on the transfer. Talk with your tax and financial professional to ensure your account follows all IRS rules. This includes how the account is set up, where the precious metals are stored and a record of the purchase is sent to the IRS.
Transfer Money from Many Retirement Accounts
It’s possible to transfer money into a Gold IRA from an array of retirement accounts.
Retirement accounts from which you can transfer funds are 403(b), 457, Federal Thrift Savings Plans, Roth IRAs, traditional IRAs, SEP IRAs, SIMPLE IRAs, and other types of eligible retirement accounts. It’s very important to ensure you choose an experienced, trustworthy, reliable, knowledgeable company to manage your new Gold IRA.