Right now a lot of people ask the question ‘How can they successfully rollover their 401K to Gold IRA?’ This is often a very simple task to achieve and you need to make sure its done properly because your funds are involved in this and for sure you do not want to lose your money.
So many perform this kind of transaction when the are trying to keep some money for retirement purposes or you might also be trying to diversify your investment portfolio.
We Kindly suggest you continue reading to know more about the basics of gold IRA plans and also how to successfully open one by rolling over your 401K.
What is a Gold IRA?
A gold IRA is simply a long-term retirement account which a custodian holds different assets such as precious metals for the account owner. The most common known name is the Gold IRA.
This however does not mean you will only purchase gold using this IRA account. So many other precious metals can also be held in this account such as, silver, platinum and palladium.
The Gold IRA plans are mostly like a self-directed IRAs, which can allow for more diverse investment than a normal traditional IRA account.
How to Open a Gold IRA Account
The steps which one can use to open this account is actually easy and straightforward. But note you have to do the right thing to prevent unnecessary charges and expenses.
First, you will need to get a custodian. This is important because it is illegal to keep the gold in your possession.
The custodian will hold the gold you purchase in your IRA account. You can find one yourself either by contacting a bank, credit union or making use of a trusted company which we highly recommend.
It is important to use a company which has a strong track record of good performing gold IRAs. See our recommended company here.
A broker or metal dealer will be required to sell you the gold. But this is not necessary because the custodian/company will have a list of brokers that they usually work with to achieve this purpose. You will not need to worry about this.
When you have selected a custodian and a broker, you will then have the access to open your account and purchase any precious metal of your choice.
When the time for you to retire draws near, you can have the option to collect your metals or simply liquidate them into cash. However, note that the IRS will tax each operation as a distribution.
Necessary Steps to Performing a 401K to Gold IRA
When all the necessary process is done and your gold IRA account has be opened, you can then contact the company in charge of your 401K account and begin the rollover process. You can also check out this 401K to Gold IRA Rollover Guide.
You will be given two options, which are indirect and direct rollover. In the indirect rollover, you will have to withdraw the funds from one account and deposit them into another. While using the direct IRA rollover, the funds will be moved directly from one account to the other. Using the direct option is usually much simpler and comes with less penalties from the IRS.
If you decide to use the indirect rollover, you will be given 60 days from the date you receive the funds to make a transfer of the money to your custodian or gold IRA company.
If you do not complete the transfer within the 60 day period, it becomes a taxable withdrawal. However, if you are 59.5 years old or younger, you will also have a 10% early withdrawal penalty.
However, irrespective of the rollover option you choose, you will make sure you have satisfied all the special requirements the company may request for rollovers.
Once these requirements are met, the company will then send a check containing your funds to you or your gold IRA custodian. Once this is done, I must say a big congratulations to you because you have successfully completed your 401K to gold IRA rollover.
Reasons to Perform a 401K to Gold IRA Rollover?
- This serves as a good means of diversification.
- You get a retirement option that does not mirror the volatility of paper currency or the stock market.
- You get an all-time high return on investment.
- The Gold market is always on the rise as opposed to the stock market or dollar value.
- So many Top investors make use of gold investment to hedge against other investments.
Having a gold investment is a very good way to diversify your retirement plan across so many assets. This gives you the opportunity of purchasing physical coins and bars or stocks in gold companies.
If you need a new destination for your funds in a 401K account and you are looking for something different from the stock market or paper currency, then the 401K to gold IRA rollover is a much better option.