What is it, and how do I do Gold 401(k) Rollover?
If you have ever changed jobs, you may have already experienced the process of completing a retirement account rollover from your 401(k) to an IRA.
A Common Step when Consolidating Retirement Portfolios
Instead of transferring investments into more and more paper assets, many people have been embracing the true diversification opportunities available with
"real assets" and "alternative assets." One of the most common methods is the 401(k) to gold IRA rollover.
In doing so they end the cycle of holding only paper, paper, paper -
and just more paper.
The Gold IRA
The Gold IRA is generally a retirement account investment strategy generally with the long view in mind, although it is very possible to make substantial short term TAX FREE gains, in which an approved asset custodian holds approved investment quality precious metals bullion bars and coins in metals which may include gold, silver, platinum and palladium. Although these types of IRA accounts are called the "Gold IRA," they are by no means restricted to holding gold bullion only. In fact, investors can even hold only silver, only platinum, or only palladium, and yet the account is still referred to as a "Gold IRA."
From Your 401(k) or Other Rollover-Eligible Retirement Account to a "Self-Directed" IRA
The Gold IRA is also known as a "Self-Directed IRA." A self-directed IRA (SDIRA) is superior to a traditional or Roth IRA in that you can hold a true diversity of alternative investments and assets that ordinary IRAs cannot contain, while experiencing all the other benefits of standard IRAs. Self-directed IRAs are generally available only via companies which specializse in offering SDIRA custodianship services.
Sounds great, but how do I do that?
Step 1. Find a Suitable Gold IRA Custodian
In addtion to all the tax and other advantages a Gold IRA, the gold IRA custodian also provides both professional security and insurance far beyond the financial and personal capabilities of most people. When considering IRA custodians, independent third party rating and reviewing entities such as the Better Business Bureau, TrustLink and verified reviews exist for guidance. A gold IRA company with a track record of customer satisfaction and top ratings is desirable, and a number of them serve the US market for retirement account holders.
Step 2. Find a Good Precious Metals Bullion Dealer
Along with the right gold IRA custodian, you also need a good precious metals dealer serving the market for investment grade bullion bars and coins. Fortunately the independent third party rating and review entities and customer satisfaction records make this easily accomplished too. Sometimes your preferred custodian may even recommend a reliable gold and silver dealer, or vice versa.
Step 3. Open Your Gold IRA Account - and Begin to Buy Gold or Other Precious Metals
Finally you are ready. Activate the services of your gold IRA company and precious metals dealer, and invest. The company will process and enable your 401(k) or other eligible reitrement account rollover and the purchasing of IRA-approved precious metals via a rollover or transfer process. You will now be set to enjoy all the tax and other benefits of an IRA, but one which contains real assets instead of only paper. When you reach retirement age, you can simply retrieve your precious metals bullion from your IRA or you can liquidate your metals out for cash.
How Your 401(k) to Gold IRA Rollover Procedure is Completed
When you open your gold IRA account, you should also contact the company which currently manages your existing 401(k) or other rollover-eligible retirement account. Your chosen gold IRA company may even take care of this for you. When you or your gold IRA company initiate this process, the rollover procedure should then begin. You have the option to choose between a direct account-to-account rollover, or a multi-step and potentially problematic "transfer" of the funds residing in your 401(k). With a direct rollover (recommended), the 401(k) funds are sent directly to your gold IRA. The mult-step "transfer," however, requires that you first: 1. withdraw all the funds in your 401(k) account to yourself; 2. and then personally deposit them into your gold IRA. You also have a limited time in which to make the deposit. As you can see there are potential pitfalls and risks with the "transfer" option, and it is recommended that you stick with the standard and secure rollover process.
If you choose the multi-step and risk-laden "transfer" approach instead of the safe and streamlined rollover option, the IRS allows you only 60 days from the date of your 401(k) funds withdrawal to transfer the money to your gold IRA. If you do not meet this deposit deadline then your 401(k) (other other retirement account) withdrawal may be deemed to be a taxable withdrawal. Depending on your age, you may also be subject to 10% penalty for making an early withdrawal as well.
When Should I do a 401(k) to Gold IRA Rollover?
The global geopolitical realities of the 2020's and the post-911 world present a clear and present picture that the days of "normality" in business and the economny are long gone. While some were able to capitalize on certain bull market waves, others can lose fortunes. People who invest and diversify a portion of their wealth in gold and silver are "the smart money" investors. Nobody knows when economic catastrophe will strike, but prepration and genuine diversification are the key.
What is real DIVERSIFICATION?
Many people are under the false impression that if they hold shares in diverse companies, perhaps some bonds as well, they are genuinely diversified. This is a commong misconception with potentially great financial pitfalls. The kind of "diversification" is nothing more than "paper, paper, paper, and just more paper" assets.
Smart money financial experts have long taught that keeping and securing a substantial % in real physical gold is virtually a "rule" for one's portfolio. When the economy is plummeting and paper assets are crashing in value, gold can often be the rock to not only stand upon and keep the boat from sinking, but even a launchpad to highly desirable gains. As with every type of asset and investment under the Sun, the price of gold may rise and fall, but with a gold IRA you are in it for the long haul, and your gold remains physical and intact. If you have not yet diversified a substantial % of your portfolio into real physical gold bullion or other precious metals then you are already at potential risk until you are genuinely diversified.
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