Savvy investors such as yourself are taking advantage of the new assets classes with ‘precious metals’. There are a lot of questions out there for first time investors who are looking into a gold IRA rollover and looking for more information about how to convert a 401k to physical gold.
If you’re thinking of converting your 401k to gold, or rolling over your 401k to a gold IRA then we hope this information will answer your questions. This is a big decision for all levels of investors, and purchasing precious metals such as gold and silver is a vital part of any well diversified investment portfolio.
How exactly does a Gold IRA Rollover work?
The short answer is: you setup a self-directed individual retirement account (IRA). After your new self-directed IRA account is ready with your new IRA custodian, a team of expert retirement specialists will personally work with you and your current custodian to transfer the proper funds into your new precious metals self-directed individual retirement account (Gold IRA).
After the funds have been verified in the new account, then you are eligible to purchase gold, silver, platinum and palladium. The Gold IRA company that you choose will do all of the heavy lifting once you complete a gold IRA setup form. The best Gold IRA companies will have quick and easy online forms to get you started.
What are the Gold IRA rollover tax rules?
There are no penalties for moving and existing IRA and rolling it over to a a self-directed IRA backed by gold and other physical precious metals. The process of moving a 401k to a gold IRA is often called a ‘rollover’ or ‘transfer’. If done professionally, this process will not have any tax penalties towards your existing IRA.
How do you know if you can rollover your existing IRA to gold?
Any traditional IRA or Roth IRA is eligible to convert into a gold IRA. A 401k to gold IRA rollover is a little bit more complex. Your eligibility relies whether or not you are currently employed by the company, or if you have an old 401k from a previous job. If you have an old 401k from a previous job it’s very simple to convert it into gold and other precious metals.
If you have an existing 401k at your current job, you may have some slight obstacles when you try to roll it over into gold. The best thing to do to know your exact eligibility is to talk to an Gold IRA expert. We’ve compiled a list of the top Gold IRA companies here. If your reach out to one of these experts, you will get the answers you are looking for.
Can you store the Gold from your IRA at home?
No! The Internal Revenue Service (IRS) considers precious metals and cash as the same thing – liquid. All gold, silver and other precious metals that back your self-directed IRA are stored in a private depository that you can visit in person anytime you want. While your precious metals are being stored for your IRA, they are 100% insured by Lloyds of London.
So do you actually own the precious metals in your gold IRA?
And if so, can you actually take possession of them? The answer is yes and yes. You can take possession of the gold, silver and other precious metals in your gold IRA at anytime.
The best way to have your gold held in your gold IRA is with allocated storage. This means that you are the direct owner of the precious metals, not the Gold IRA company, or any other third-party. The reason why you should not take possession of the precious metals in your IRA, or cash out, before the age of 59.5 is because you would incur penalties and have to pay the appropriate taxes. Therefore, if they are held in a government approved depository, and when the time is right, you can request that your precious metals be delivered to your home.
Can you buy physical precious metals for outside of your retirement account?
Of course! Owning gold and silver outside of your retirement account can cost less and give you an advantage in your retirement portfolio. Gold, silver and other precious metals that are purchased outside of your retirement account are delivered to your home, fully insured, and usually arrive within a week. What do you do when you receive your precious metals? As with anything of high value that can easily be converted to cash, it is highly suggested that you immediately put your precious metals into secure storage. Many smart investors use safety deposit boxes at locals banks, to store small amounts of precious metals outside of their retirement accounts. Safety deposit boxes are accessible most days of the week, are relatively inexpensive and secure. You are also not required to disclose any information to your bank about the contents of your box.
How do you get started with a self-directed IRA backed by gold?
The process is simple, fast and easy. Visit our list of the best Gold IRA companies here and read the reviews. Talk to a few of them to gather information. When the time is right, you will be familiar with the process and feel safe knowing that you are making the right decision for your future retirement.