401k To Gold IRA Rollover Guide

How to Transfer a 401k to a Gold IRA

In this 401k to gold IRA rollover guide, we’ll explain the steps of how to transfer your 401k to a gold IRA.

To rollover a 401k plan into a traditional self-directed IRA is a common practice, but if you want to transfer your 401k to a gold backed IRA, the process is a bit different. A gold IRA specialist might be your best bet to make the process as smooth as possible. Goldco Precious Metals and Augusta Precious Metals are both top rated companies that specialize in the precious metals IRA process.

With the economic uncertainty that we’re facing today, gold and precious metals are the best choice to hedge against inflation. The dollar is losing value at a rapid pace, and many people facing Retirement want to protect their savings from inflation, uncertainty and currency debasement given today’s volatile market.

What is a Gold IRA Rollover Exactly?

The definition of a gold IRA rollover is converting some of your existing investment portfolio or retirement account like a 401k, into gold bullion or gold coins, the reason being this is a sensible way to hedge against inflation and economic uncertainly.

Funds will be withdrawn from your existing account for the rollover and are held for a maximum of 60 days until they have to go into the new IRA under another administrator or custodian.

Gold IRA Transfer vs Gold IRA Rollover: What’s the Difference?

Gold IRA Transfer Rules

No penalties for early withdrawal
No 60-day transfer rule applied
No annual limits
Not taxable
No withholding of taxes

Gold IRA Rollover Rules

If the account holder is under 59.5 years of age, there is a 10% early withdrawal penalty
The 60-day transfer rule does apply, and the gold must be invested in the new gold IRA within this timeframe
IRA holders are not allowed more than one rollover per calendar year
Violating the 60-day rule means the distributed funds will be taxable like regular income
If a rollover is done from one personal IRA to another, there is no withholding of taxes

With a gold IRA transfer, or IRA gold transfer as it’s sometimes known, funds are moved from one custodian to another. This means the account holder won’t receive any of the money taken out of their account Village voice.

Rollover of 401k to Gold Backed IRA

It is absolutely possible to rollover or transfer funds from your existing self-directed or employer-sponsored 401(k) into a gold backed IRA, although there are certain rules in place for this process which must be clarified before going ahead with a rollover.

Rolling over funds from your 401(k) with a former employer to a new gold IRA should not be a problem. Just pick a gold IRA custodian and let them set up the 401(k) rollover for you. Now if you’re considering a rollover of a 401(k) with a current employer, this can be slightly trickier and you will need to read the terms of your policy.

Choosing Your Gold IRA Rollover Strategy

There are different approaches to choose from when making a transfer or rollover to a gold IRA and your financial plans will dictate the type of rollover strategy you pick to fund the account. Although many people interested in investing in precious metals will ask how much of their portfolio they should invest, there is no one-size-fits-all answer.

How much of your funds you decide to invest in gold, silver or other precious metals depends on how close to retirement you are as well as your personal risk tolerance level.

If you are within ten years of retirement and you don’t want to take much risk, you might want to dedicate 20% or so of your portfolio. If retirement is further off and you don’t mind more risk, you might prefer to convert just 5 or 10% of your savings into precious metals.

Diversification Of Your Investments

This describes investors who want to buy gold simply to protect their existing portfolio from the overexposure they might get to bonds, stocks and other types of traditional assets.

A lot of investors who are conscious of risks like to diversify with precious metals to limit any potential losses if there is a recession or downturn in the stock market.

Physical Gold vs Paper Gold IRA Rollover

Physical gold refers to the hard metal bars kept in vaults by trusted custodians. Paper gold refers to any type of security that’s gold-based like ETF or gold mining stock for example.

Paper gold might be more convenient than actual bullion but it doesn’t have many other benefits really. Gold stocks have additional liquidity and this makes buying and selling easier. Paper gold is therefore more volatile that real gold bullion.

If you want to enjoy the myriad gold investing benefits, you should look into a real gold IRA rollover, since in the case of economic collapse or uncontrolled inflation, your gold stocks might plummet in value.

Here are some of the main advantages of investing in real physical gold bullion instead of securities-based gold, or ‘paper gold’:

Counterparty Risk
Ease of Transfer or Moving
Tangible Ownership
Safe Haven Storage