Gold IRA Rollover Guide – How to Convert IRA or 401(k) to Gold

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Your retirement should be the time when you finally get to relax, and dedicate time to things that you love and enjoy doing. However, it’s not that simple. To have a restful retirement, you need to have your finances in order. 

Making the most of your retirement plan is not always possible with standard 401(k) or IRA plans, which is why more and more retirees are turning to gold IRA rollover accounts to invest in their retirement funds.

Gold IRA transfers take your retirement funds and turn them into physical gold, making sure it never loses value, as gold prices are far less likely to decline than stock investments.

There is a set amount of physical gold in the world, so its value does not diminish over time.

  • What are gold IRA rollovers? How do you convert your IRA or 401(k) to gold?
  • Is this option even right for you?

We have answers to all your questions here. With this guide, you’ll be able to get the most out of your retirement plan and enjoy your golden years.

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What Is a Gold IRA Rollover?

A gold IRA rollover converts your retirement account savings or investment portfolios, or portions of these accounts, into physical gold coins or gold bullion that are held by a custodian. Although the name might sound deceiving, you can actually decide to invest in more than gold with this type of IRA – you can also decide to hold silver, platinum, or palladium, although only certain types.

This process protects your retirement savings against inflation, as gold prices are less likely to fluctuate. With gold IRA transfers and other alternative investments, your retirement fund will be more secure and you’ll be able to better protect your future.

How Does a Gold IRA Rollover Work?

Converting IRA to gold or other precious metals IRAs works by removing the funds from out of your current retirement account and transferring them into a new account with a gold IRA administrator.

However, you can only remove funds for 60 days before you must transfer them. Gold IRA rollovers can only work by opening an account with a gold IRA company where you can deposit these funds.

Once your account is open, you can select the gold or silver you would like to purchase with these funds. Once you set up your gold IRA account, you choose the percentage of retirement funds you want to put into the account.

Then, you can choose which precious metals, silver or gold, you want to buy with the funds. Gold IRA companies make this process easy to understand and execute.

A representative can walk you through the process, benefits, and costs of gold IRA accounts.

Eligible Retirement Accounts

Instead of having to start saving all over again for buying precious metals within your gold IRA, you can simply use the funds you have already gathered in another retirement account.

Each of the following retirement portfolios is eligible for gold IRA rollovers. Normally, the funding from these accounts will go towards stock investments, but that could be risky, especially if you’re putting your money all into one investment strategy. 

You can use gold IRA rollovers for each type of retirement account to alleviate the stress of shaky investment markets.

401(k)

A 401(k) is an employer-sponsored pension account that receives money directly from each paycheck. In some cases, the employer offers to add a part or double what you’re paying into it. However, there are some limitations – for 2023, the limit for how much employees can put away on a 401(k) is $22,500.

You can complete a 401(k) rollover to gold by contacting a gold IRA company to begin the rollover.

Here, the process still takes 60 days or less. A 401(k) sponsored by your current employer may be subject to specific policies by your employer.

Some employers prevent gold IRA rollovers while you are still employed, so you should talk to your employer about their indirect rollover policy. 

In the case that your current employer sponsors your 401(k), you will need to see what your options are for transferring to a self-directed account.

If you are about to retire, you can begin the smooth rollover process with a company after you have officially retired.

Roth IRA

A Roth IRA is an Individual Retirement Account, where you deposit after-tax dollars. You can grow these contributions tax-free.

After you reach retirement age and have kept the account open for five years, you can withdraw these funds tax and penalty-free.

403(b)

A 403(b) is a tax-sheltered annuity retirement plan for certain employees of public schools and other tax-exempt organizations.

A 403(b) account is eligible for rollover 2 years after the first contribution. As it is self-directed, this rollover process typically takes five days.

457

The government and non-profit organizations offer 457 plans to their employees. This plan allows employees to set aside money for retirement and only pay taxes on it when they withdraw the money.

You must complete 457 rollovers within 60 days or the IRS will tax the funds.

Direct rollovers are the best choice for 457 plans. In this process, you aren’t making a withdrawal; your provider is just transferring your money to the new account.

Pensions

A pension plan provides you with monthly income after you have retired. You and/or your employer contribute to its funds while you work there.

Pensions work similarly to a 401(k) in terms of rollover. With these plans, your employer is in control.

TSP

A TSP plan stands for Thrift Savings Plan and allows federal employees and military members to have a plan similar to a 401(k). TSP plans follow the same 60-day rule to complete the rollover to gold IRA.

Types of Gold IRAs

If you’ve ever tried to create an investor account, then you’re probably aware that they come in different forms – the same can be said for IRAs. There are different types of Individual Retirement Accounts that you can opt for when you’re considering investing in gold: 

  • Traditional Gold IRA – contributions to this type of IRA are made with money that hasn’t been taxed yet. Your earnings on this account will grow on a tax-deferred basis, which means that you won’t be taxed for them until you start withdrawing. 
  • Roth Gold IRA – the contributions made to this account have already been taxed. You will have to pay taxes again when it is time to start taking distributions at retirement. 
  • SEP Gold IRA – this type of retirement account is available to small business owners or self-employed individuals. Instead of being taxed right away, you will be taxed once you begin withdrawing money from it during your retirement. Keep in mind that there are limits on how much you can contribute – as of 2023, that is up to 25% of compensation or $66,000, depending on which one is lower.

IRA or 401(k) to Gold IRA Rollover – Guide

Gold is a material that will most likely not lose its value, which is why more and more people decide to keep their savings in that form instead of money, of which value can fluctuate rather drastically at times. If you, too, want to change your retirement savings to gold, you’ll probably be glad to know that it’s easy to start the gold rollover process, and it requires only a few steps.

Here is a short, step-by-step guide to how to convert IRA to gold:

1. Research a Reputable Gold IRA Company (We Recommend Goldco)

There are many storage options you can use to help with your investment choices. For example, Goldco is a secure depository for precious metals, coins, silver, and gold, and the company will keep them safe until you’re ready to use them. 

To ensure the rollover process goes smoothly, it’s crucial to do thorough research on gold IRA companies – especially when you consider that if anything goes wrong in the rollover process, such as the transaction not being completed in 60 days, you may have to pay a withdrawal penalty.

There are a few ways in which you can find a great company – first, you can ask your friends and family for recommendations. Chances are that someone around you has already used this type of service and can share their experience with a specific company with you. Another great way is to check online reviews – trust us, if a company isn’t worth your time, online reviews will definitely let you know that.

Here are some of the things you might want to take into consideration when looking for a company to handle your gold IRA: 

  • Transparency. Look for a company that has information about any fees you would have to pay when opening a gold IRA easily accessible. After all, you probably don’t want t,o choose a custodian only to find out that there are several additional charges you have to pay. 
  • Track record. Consider how the company is rated by third-party websites, such as Better Business Bureau. Also, as we already mentioned, look at the online reviews that past, and current customers have left. 
  • Flexibility. Look for a company that will be able to adjust its offer so that it suits your needs best.
  • Qualifications. It’s important that the company you choose to go with, or even are taking into consideration has all the necessary licenses, registrations, etc. Thanks to them, you will be sure that you are dealing with a legitimate business.

    A good company to take a look at is Goldco. Goldco has over a decade of experience helping people protect their retirement funds. They walk you through the steps necessary to complete a gold IRA rollover for almost any qualified retirement plan.

    You might be considering storing the gold yourself – however, according to the law, if your gold is IRA-purchased, you are not able to do so, as it is not legal. The same goes for any precious metal that was purchased within an IRA.

    2. Visit Their Website and Set Up a Call

    Once you decide which company you want to manage your gold IRA, you will have to provide them with your application. Depending on who you’re going with, you might be able to complete the process online, or you will have to send them a printed-out form via a postal service.

    Goldco’s website gives you the option to call them or send them a message through the site. Goldco provides interested retirees with a free kit to teach you everything you need to know about starting a gold IRA account with them.

    3. Decide the Percentage You Want to Allocate to Precious Metals

    You never want to have all of your assets in one single account. Work with the Goldco representative and your financial advisor to decide how much of your retirement plan you want to allocate to gold IRA rollovers.

    4. Sit Back and Relax

    Goldco, or whatever company you chose, has you covered. If you did your research and worked with a rollover specialist, the hard part is over.

    The gold IRA company you hired will handle everything else and ensure a complete rollover process within 60 days.

    Should I Do a Gold IRA Rollover?

    The short answer is yes. As someone planning for retirement or in the retirement process already, you should consider doing a gold IRA rollover.

    With recent rises in inflation, going with a gold IRA rollover will protect you, your finances, and your family from the impacts of a declining US dollar.

    When you have alternative investment options, especially through precious metal assets, you fight against investment risks.

    Not only this, but you also protect against government seizures.

    The benefits of gold investing are the same as other retirement plans with more effective protections. Although a 401(k) that you invest into stocks could potentially harm your investments rather than grow them, gold IRAs never depreciate.

    Without Gold IRAs, stock investments can be completely lost if the stock market drops. It’s important to educate yourself now about gold IRA and its potential so that you can prevent any further risk to your finances.

    Gold IRA Withdrawal Minimums

    Generally speaking, you shouldn’t be withdrawing funds from your gold IRA before you reach retirement age, which is why a penalty was put in place for when you do it. Once you do reach 59.5 years of age, you can make withdrawals, but you’re not obligated to do it. 

    The situation changes once you turn 72 – after that, you need to make at least one withdrawal per year. RMDs, which stands for Required Minimum Distributions, need to be taken no later than 31st December of each year. The only exception is the first RMD, which can be postponed until 1st April of the year following the one in which you turned 72. 

    So, for example, if you’re 75 years old, this year your RMD needs to be taken before December 31, 2023. On the other hand, if you’re turning 72 let’s say in May, your first RMD doesn’t need to happen this year, but should be taken by April 1, 2024 at the latest.

    Advantages of Investing in Physical Gold

    Probably the most important advantage of investing in physical gold that we already mentioned is the fact that it protects you from financial loss due to the unpredictability of stock market and currency fluctuations. However, that’s not all – there are further benefits to it. 

    Another important aspect of investing in physical gold is the fact that it protects you from identity theft and other fraudulent activities committed by online hackers. Due to the nature of this investment, and the fact that they are placed in a depository, it is almost impossible to steal it, which can’t be said about regular accounts on which you keep money. 

    If you have physical gold, you don’t have to worry about the government seizing your money. And as it was shown in Cyprus, in 2013, when bank account owners with a balance of or more than 100,000 euros woke up to almost ten percent of their money levied, while those who had less had 6.75% of their savings confiscated, the government doesn’t have to let you know before they do it. 

    Finally, although it is somehow connected to the first point we made, physical gold’s value is not dependent on another party. This can’t be said, for example, about shares in a company. When you buy a share, there are other parties involved, and their decisions can affect how much it is worth, such as the board of directors. If the board starts making bad decisions and the company stops making profits and its reputation starts crumbling, the worth of your share will definitely be affected.

    FAQ’s

    If you still aren’t sure if gold investments are right for you, here are some frequently asked questions that may help you decide.

    To convert your IRA or 401(k) to gold without a tax penalty, make sure to complete the transaction within 60 days or less.

    After 60 days, the Internal Revenue Service (IRS) may tax you for the withdrawal and subject you to other potential penalties.

    A gold IRA rollover involves withdrawing funds from one retirement account and putting them into the new gold IRA account, while a gold IRA transfer involves transferring funds directly between two third parties.

    With a transfer, the bank never withdraws your funds.

    Fees involved with gold rollovers may include the startup costs of opening a gold IRA account, paying your gold IRA company, as well as an annual custodial fee for your administrator.

    Rollovers can take as little as 5 business days but no longer than 60 days. If you have filed all of the correct work with your gold IRA company, the transfer will happen sooner than the 60-day period.

    If your gold falls within a gold IRA, then no. That’s because there are certain rules that need to be followed, and one of them is that the precious metals should be stored in an IRS-approved depository. 

    However, after you turn 72 and you begin taking the obligatory distributions, you can ask for it to be “in-kind”, which simply means that the gold (or other precious metals you have stored) will be sent to you, and you can do with them as you please.

    You might find yourself in need of withdrawing at least part of your investment from your gold IRA. In that case, you need to provide your custodian with a distribution request – once they receive it, they can start the withdrawal process. 

    The custodian will liquidate part of your gold and provide you with the money, either with a check or with a wire transfer. 

    Keep in mind, however, that if you withdraw money from your IRA before you reach retirement age, you will have to include it in your gross income. Additionally, you will have to add a 10% tax penalty, although this can be dropped in specific circumstances (for instance, if you need to pay your medical insurance premium but you have recently lost your job).

    Yes, you can only do a rollover once a year.

    Generally speaking, you shouldn’t withdraw your savings from a gold IRA before you reach retirement age, which, at the moment, is 59.5. If you do, you might have to pay a 10% penalty, as well as taxes. While you cannot avoid paying taxes, there are some situations where you can withdraw money penalty-free.

    Here are some examples when you won’t be penalized if you withdraw the money:

    • You won’t be penalized if the money is used to cover major healthcare expenses that are not reimbursed by health insurance and that exceed 10% of your adjusted gross income.
    • If you’re unemployed and have collected unemployment compensation for 12 consecutive weeks, you can withdraw money from your IRA to pay for health insurance premiums for yourself, your spouse and your dependents. 
    • You can withdraw money penalty-free to pay for college – this includes tuition, books, supplies, equipment, and any other fees associated with getting a higher education. The person pursuing a college degree needs to be either you, your spouse, your children, or your grandchildren. Keep in mind, however, that if the person going to college wants to apply for financial aid, the money from a gold IRA might make it more difficult as it is considered taxable income. 
    • Money from a gold IRA can be used to purchase a first property for yourself, your child, grandchild, or parent. You can withdraw a maximum of $10,000 (or $20,000 if we’re talking about a couple) for this purpose. In order to be eligible for it, you must not have owned a home in the two years preceding the purchase. Keep in mind that if you’re unable to buy a home, in the sense that the transaction is either canceled or delayed, you need to put the funds back into your IRA within 120 days of the distribution – otherwise, you will be penalized. 
    • If you’ve recently become a parent, or you want to become one through adoption, you can withdraw up to $5,000 without being penalized for it. Just keep in mind that the distribution needs to happen within a year of the child being born or adopted. If your situation eventually improves, you can put the money back into your IRA. 
    • If you have a disability (mental or physof ical) that prevents you from being employed, you can withdraw funds from your account – however, you might have to provide some kind of documentation confirming your inability to work. Not all conditions qualify, so you should confirm whether yours does with your custodian. 
    • If you’re a member of the military, you might be eligible for penalty-free withdrawals. Those are available to military members who have been ordered or called to duty after September 11, 2001, and for a period of more than 179 days. Keep in mind that the withdrawal must happen during active duty, as otherwise, you will be penalized as well if you do it in other circumstances and before you retire. The option of penalty-free withdrawals is available to members of the Air National Guard of the United States, Army National Guard of the United States, Air Force Reserve, Army Reserve, Coast Guard Reserve, Marine Corps Reserve, Naval Reserve as well as Reserve Corps of the Public Health Service.

    If you’re wondering if you can contribute to both, the answer is yes – you can do that. Just keep in mind to plan your contributions in a way that won’t make you go over the established contribution limits.

    Not all gold qualifies for an IRA. When it comes to bullion coins, they need to have a finesse of at least 99.5% as well as be legal tender. Bullion bars and rounds, on the other hand, need to have a finesse of at least 99.9% to qualify.

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