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If you want to transfer your 401(k) into an IRA, you have two options: withdraw the money and deposit it into your new account or do a rollover, where the money stays in your current account while moving to your new one. While the second option keeps your assets in one place, withdrawing them will result in paying taxes and administrative fees. In some cases, this can work out better for you depending on your situation, but before you make any decisions, it’s important to know how to do a gold IRA roll over properly to ensure you don’t lose out on any tax benefits you deserve.
Gold IRA Roll over: Reasons to consider a gold investment
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How to do a Gold IRA Rollover
Gold has been an essential part of humanity’s civilization for thousands of years, serving as a reliable store of value and bartering tool. This shiny precious metal is also one of the rarest resources on Earth, which gives it intrinsic value. As such, gold is something many investors consider when they’re looking for ways to diversify their portfolios or hedge against inflation. The main benefit of investing in gold? Many people see it as one way to preserve purchasing power over time—especially if you have IRA or 401(k) account in need of funds.
Are you ready to invest in gold? If so, here’s how. To do a gold IRA roll over, contact your current bank or broker and let them know you’d like to set up an account with metals vendor of your choice. Make sure they are qualified dealers with CME Group as well as traders on Nymex and COMEX. Your firm will be able to facilitate these trades and help you execute a transaction that is consistent with IRS regulations. You may also want them to provide regular updates on your account balance and purchases, which many companies offer as part of their services.
Some people are wary of investing in gold for their retirement account, as there is an extra tax liability associated with selling gold-based IRAs. In general, you’ll pay taxes when you cash out an IRA or 401(k) account and can face penalties if you’re under 59 1⁄2 years old at time of withdrawal. However, you can avoid these penalties if you roll over your retirement savings into another qualifying tax-deferred plan. Note that not all investment vehicles allow rollovers. For example, if your traditional 401(k) balance is worth more than $500,000, your plan administrator may have to convert it into a Roth account in order to facilitate a rollover transaction and meet IRS regulations.
The basics about gold IRAs
IRAs aren’t just for stocks and bonds. You can buy gold and other precious metals as an investment within your traditional IRA, too. How it works: A precious metals IRA will take care of storing your gold bullion, coins or jewelry so that you don’t have to worry about losing any of it. It will also make sure you pay your taxes each year on whatever profits come from these investments so that you avoid getting in trouble with Uncle Sam. You’ll also need to keep records, but as long as you keep up with them, there shouldn’t be any problems.
As long as you stay within certain limits, it’s perfectly legal to buy precious metals in your IRA. This type of investment will also help diversify your retirement portfolio so that you can make better plans for your future. And unlike with other types of IRAs, such as those for stocks and bonds, there are no capital gains tax when it comes time to sell gold in an IRA. In fact, gold doesn’t generate any income like regular investments do because it’s considered non-income producing property. These taxes go away when you buy gold coins or other precious metals, making them a smart option if you want to reduce some of your tax liability now or in retirement.
Gold IRA Roll Over
Your gold IRA will also give you access to more than just American Gold Eagles and American Silver Eagles. You can buy coins and bars from all over the world, including South African Krugerrands, Austrian Philharmonics, Chinese Pandas and other foreign coins. And since your gold is stored with a third-party custodian, you won’t have to worry about security issues or keeping an eye on it all the time. The best part? If you decide that buying precious metals isn’t for you, you can sell your holdings back anytime. You’ll just have to pay any capital gains taxes due before doing so.
Transfer your current IRA
If you’re wondering how to do a gold IRA roll over, it’s pretty simple. Your first step is to get in touch with your current financial institution and let them know that you would like to start an account with American Bullion. At American Bullion, we don’t require any minimum balance, so if you only have $10 in an old IRA—that’s perfectly fine. We will help you set up your new account quickly and efficiently; however, if at all possible, please be sure that there are no outstanding loans or contracts against your current IRAs before beginning.
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Gold IRA Rollover
If you already have a plan in place for your gold IRA roll over, that’s great! Just be sure to put down an initial investment of at least $5,000 before you open an account with American Bullion. We prefer not to work with investors who are hoping for short-term gains, so if you don’t have at least five figures available right now—and if your goal is less than five years—you might want to consider other investment options.
As we mentioned above, it’s important that you don’t have any outstanding loans or contracts against your current IRAs before you begin. If you do, just let us know and we can work with you to reschedule your investments so that everything goes smoothly. However, if there is more than one contract against your current IRA, then it will make sense for you to close out your current account first. When investing in gold, timing can be crucial and we don’t want you to miss out on any opportunities due to outstanding obligations on other accounts.
Costs of the roll over
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Gold IRA Roll Over
Once you decide to roll over your current 401(k) into gold, you must also account for possible costs involved with doing so. In many cases, as with other retirement accounts, there are government fees charged when moving money from one account to another. Since gold is not considered a standard currency by most traditional financial institutions, there may be additional costs added on top of that. It’s always important to ask about these fees beforehand and try and find out what they will be should you decide to move forward with your plans. With good knowledge and preparation, you’ll have fewer surprises in store when dealing with foreign currency accounts like gold IRAs.
There are also some additional costs associated with moving your money into an IRA. As previously mentioned, some financial institutions will charge you a fee for moving your funds into an IRA. This is due in part to their inability to redeem bullion based currencies and is sometimes referred to as a brokerage or custodial fee. You’ll need to ask about possible fees at your current institution before making any final decisions. If you do incur additional fees, it’s important that you understand how they’re calculated and when they are charged—if at all—as these details can vary from institution to institution. It’s best if you can find out whether or not there will be brokerage/transaction fees and what type of paperwork may be involved before making any plans.
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If you decide to rollover your current 401(k) into gold and incur any additional fees, it’s also important that you understand how these costs will be covered. You may have various options in regards to fees depending on what type of account you’re rolling over from, or you may be charged extra for redeeming funds in order to pay off other debts. In some cases, you may need to cover all expenses involved with moving your money as well as taxes associated with leaving one type of account for another. When it comes time for choosing where and how much money will be invested, make sure that you fully understand what each option entails so there are no surprises in store later on down the line.
Keeping your gold investment safe
Gold IRA Roll over
While investing in gold bars is an excellent way to make sure you have some financial stability in your retirement years, there’s always a chance of theft. If you’re storing your gold in a safe deposit box, or if you have it at home, theft is always possible. Luckily, there are ways to keep your investment safe and still be able to access it when you need it most. One option: setting up an Individual Retirement Account (IRA) with an Internal Revenue Service-approved custodian and purchasing physical gold with electronic funds. Setting up a gold IRA rollover can help protect you from market fluctuations while providing long-term growth potential.
Purchasing gold within an IRA is one way to keep your investment safe. Additionally, you can use retirement funds to purchase physical gold coins, bullion or other gold investments, which means you have more flexibility in terms of where and how you purchase your investment. As long as you follow IRS regulations for purchasing precious metals for an IRA rollover, purchasing gold through an account is straightforward. You’ll want to be sure that your custodian deals with only top-quality refiners so you’re certain of what you’re getting when buying physical gold within your account.