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Can I convert my 401k to gold? As an investor in the stock market, you’ve likely felt the impact of the recent economic crisis. Your portfolio may have decreased in value, and you might be wondering if there are better investment options available to you. Converting your 401k to gold might be one such option, but it will depend on your particular situation and goals as an investor. It’s important to understand exactly what this means before moving forward with any kind of conversion. Read on to learn more about converting your 401k to gold and whether or not it’s right for you.
What is a Gold IRA?
A gold IRA is an Individual Retirement Account that’s not just limited to investments in stocks, bonds and mutual funds. Because of recent changes in U.S. law, you can now use your IRA as a type of savings account for physical gold or silver bullion or coins—or any other precious metals that are listed on Comex (the Chicago Mercantile Exchange). Why would you want to convert your 401k into gold or silver? Many experts have suggested it could be a good hedge against inflation or other economic issues in our future; some even believe it could ultimately become part of a global currency.
How do I convert my 401k into gold or silver? The process is fairly simple, and all you need to start is a written letter of instruction (To Whom It May Concern) explaining what you want done with your account. Simply submit that letter along with your written notice of intent to rollover—plus any other documents required by your IRA custodian—and they should handle everything else for you. But if you want more information about converting your IRA into gold or silver, talk to an expert today.
If you already have a gold IRA, how do I use it? As soon as you receive your precious metals, you can transfer them into your self-directed IRA account. Or if you prefer, convert them into cash and put that money directly into your traditional or Roth IRA account. The important thing is that they go into a properly titled self-directed account before year’s end—otherwise, there could be serious tax consequences (including penalties) for doing so. Consult with an expert today if you have questions about using your gold IRA or converting an existing one.
Can I convert My 401k to Gold?
Why Might You Want to Convert Your 401K Account Into a gold IRA?
There are a few reasons you might want to convert your IRA account into a gold IRA. First, if you believe that hard assets like real estate or precious metals will continue appreciate in value over paper assets, converting your traditional retirement plan could be an excellent way of diversifying your portfolio and protecting against inflation. Second, you can avoid paying capital gains taxes. By converting your 401k into a gold-based IRA, any growth within that fund is tax-deferred (the gold grows tax-free). Then, when you take distributions at retirement age they are considered distributions rather than taxable gains—even if they consist of more than just original contributions and appreciation in value.
There are two main ways you can convert your traditional IRA account into a gold-based retirement plan: You can rollover your account, or move it from one custodian to another. With a rollover, you move your funds directly from one provider—like a bank—to another. But because IRA contributions are typically made with after-tax dollars (meaning money that’s already been taxed), rolling over an IRA is treated as a distribution. Distributions are considered ordinary income and if you’re under 591⁄2 years old will be subject to taxes and possibly penalties if you withdraw them before retirement age.
If you opt for a gold-based IRA instead, your account will be administered by a custodian that holds your assets as actual physical gold and silver. Although converting from a traditional plan into a gold-based one is considered a rollover, you won’t have to pay taxes or penalties on money taken out of your traditional IRA. A few notes about that: You don’t get taxed now, but any subsequent distributions are treated as ordinary income in retirement age.
Can I Convert My 401k to Gold?
I’m Interested in Converting. How Do I Get Started?
If you’re interested in converting your retirement account into gold, visit a site like Augusta Precious Metals. They’re an industry leader in precious metals sales and will walk you through every step of a seamless process.
In fact, you can convert your retirement account into physical gold. Simply follow these steps from a well-known leader in precious metals sales to get started:
- Decide on how much of your 401k assets you want to convert into gold. This is typically based on age and savings/liquidity needs for emergency funds, vacation and other items on your bucket list. Augusta Precious Metals can help determine what’s right for you.
- Call Augusta Precious Metals at 1-800-953-3538 or click on the banner below. They’ll connect you with a certified precious metals specialist who will walk you through every step of a seamless process that lasts less than 30 minutes!
Can I Pay Myself Back Later if I Choose This Option?
Although gold is a safe investment, if you go down with your ship, there’s no way of recovering what you put into your retirement account. It’s always a good idea to have a back-up plan just in case things don’t work out. If you choose to convert your 401k into gold, be sure that you can pay yourself back later if you run into financial difficulties or decide that switching plans was a mistake. In other words, don’t let yourself get stuck with an asset that has value but isn’t liquid.
If you think that gold will be a better investment than your current retirement plan, you can contact your financial advisor or accountant for more information. Just be sure that any fees associated with converting your account are reasonable and won’t eat up too much of your nest egg. The last thing you want is to take an unnecessary risk with a large sum of money. As long as you have other sources of income, staying in your original plan isn’t always a bad idea. Having access to employer matching on company stock, for example, might make it worth it for you to stay put even if there is no additional tax advantage from doing so.
Can I convert my 401k to Gold?
How Does it All Work?
First, you have to make sure that your plan offers what’s called an individual retirement account (IRA). If you’re at a small employer, it may not be up and running. It could take a few weeks or more. In addition, if you’ve been out of work for some time, check with your plan administrator about required vesting periods for new hires; in some cases, you may not qualify until after two years on board.
If you qualify, your options are limited only by your imagination. The most popular choice is a precious metal IRA, which enables you to hold gold, silver or platinum coins and bullion. The IRS has specific guidelines for precious metals IRAs that you should follow; for example, if your 401(k) is worth less than $25,000 — combined with any other IRAs you own — then it’s typically not worth converting because high fees will quickly erode its value. If your plan offers a Roth account — these have after-tax dollars going in but tax-free distributions in retirement — gold can also be an option there.
If you’re married, both spouses have to agree on any conversion or exchange. You can’t convert your entire account all at once; instead, you must follow IRS rules that dictate how much you can take in each year. The minimum is $1,000 and it goes up from there based on your age at year-end. For instance, if you’re 55 in 2017, then you can convert up to $55,000 worth of assets per person into gold that year; for those who are younger than age 50 in 2017, the limit is just $36,000 per person.