Is it time to take some money out of your 401k and invest in gold and silver? You may want to take a look at a Gold IRA. Gold IRAs offer a tax-advantaged way of investing in gold and silver coins or bullion.
Rising inflation, a downturn in the stock market, and persistent economic uncertainty all have investors considering alternative assets such as gold, silver, and cryptocurrencies. Gold and silver have an advantage over cryptocurrencies such as Bitcoin because they have an established historical track record as excellent hedge investments against inflation.
Gold IRA or Silver IRA Advantages
A Gold or Silver IRA enables you to invest in physical assets that aren’t available through a 401k. The benefits of investing in gold and silver through an IRA include the following:
- The tax benefits for IRA contributions
- Protection from inflation
- Increased investment portfolio diversification and risk protection
- Physical assets like gold bullion are less susceptible to government seizure
- You have the flexibility of using a traditional or Roth IRA
Financial advisors often suggest investing 5-10% of your total investment capital in precious metals. (A Gold IRA can also hold silver, platinum, or palladium.)
Rollover a 401k into a Precious Metals IRA – A Step-by-Step Guide
Rolling over a 401k account into a Gold IRA is easy. It takes just a few steps. Gold IRA companies can guide you through the rollover process to ensure that you comply with all the Internal Revenue Service (IRS) rules regarding precious metals IRAs.
Rolling over your 401k funds into a Gold or Silver IRA can be done one of two ways. With a direct rollover, money is simply transferred directly from your 401k account to your precious metals IRA. An indirect rollover is more of a “hands-on” process: your 401k funds are disbursed to you, and then you handle depositing them into a Gold IRA that you’ve set up.
Here’s a rundown of the simple steps for moving retirement funds from a 401k to a Gold IRA.
Step 1 – Check Eligibility
There may be some transfer restrictions on money in your 401k while you’re still working for the employer providing the plan. There are, of course, no restrictions after you’ve left the employer. Your 401k plan administrator can give you all the answers about funds transfer eligibility and the proper rollover procedure.
Step 2 – Open a Gold IRA
Be aware of the IRS rules for Gold IRAs. Otherwise, you could end up – instead of enjoying tax advantages – having to pay tax penalties. The IRS requirements aren’t extensive, but they are strict.
- A custodian trustee must manage the account for you
- Only certain gold bullion or silver bullion (or coins) can be invested in the account
- You must store your gold and silver in IRS-approved storage facilities
The easiest way to make sure you comply is to use the services of a company that specifically handles precious metals IRAs.
Step 3 – Execute the Rollover
Once your precious metals IRA is created, then you simply fund the account, using the direct or indirect method for moving funds from your 401k account.
Step 4 – Buy Precious Metals
The last step is the easiest – purchasing gold bullion or silver bullion to be deposited in your new IRA. The Gold IRA company you create your account with will give you a list of IRS-approved forms of gold or silver bullion or coins.
The Top 3 Gold IRA Companies In choosing a Gold IRA company to work with, the main differences to consider are the extent of services the company provides and the fees they charge. Here’s a list of top Gold IRA companies:
#1 Regal Assets Best Overall Gold IRA Provider
Regal Assets is an all-in-one provider of precious metals IRA services. They offer Gold IRA custodian trustee services, sell IRS-approved gold bullion and gold coins and silver bullion and silver coins, and also handle IRS-approved storage.
#2 JM Bullion – Fast-growing US Precious Metals Dealer
JM Bullion is a respected supplier of precious metals for investors, with an extensive catalog of gold, silver, platinum, and palladium bullion and coins for purchase. Unlike Regal Assets, they don’t directly handle all the facets of Gold IRAs but will connect you with third-party trustees and storage providers.
#3 Kitco – Best for Market News
Kitco is known for keeping precious metals investors apprised of the latest market news and commentary. Kitco sells a wide range of precious metals bullion and coins. It’s similar to JM Bullion in that it doesn’t directly provide custodian or precious metals IRA storage services.
Extended Summary Table: Top 3 Precious Metal IRA companies
Rolling Over 401k Funds into Gold and Silver – Summary
The current economic climate of rising inflation and sinking stock prices has many investors thinking about making investments in gold or silver. Contact a Gold IRA company for more information on precious metals IRAs.
Find out if a Gold IRA is right for your investment strategy. Learn more here about IRAs (including Silver IRAs, Crypto IRAs, and Bitcoin IRAs).
Written By: J.B. Maverick – An active investor who has written hundreds of articles, blogs, and eBooks on personal finance and investing for dozens of different investor information websites, including Investopedia.com, and acted as an advisor and editor for the Financial Educators Council. Connect with Jack on linkedin here
