A 401(k) plan provides a simple vehicle for company employees to save a portion of their earnings. In addition, many 401(k) plans are eligible for a company “match” up to a specified amount and/or percentage.
401(k) plans, however, may be somewhat limited in the investment choices available. Many investors today are looking for added diversification to cushion the blow of inflation and other risk factors. Investors are looking for ways to own physical precious metals, such as gold. This brief guide will outline how a 401(k) program from a previous employer may be rolled over into a gold or silver IRA.
While 401(k) plans may offer several choices of for investments, the total amount of asset classes available to invest in may be limited. Standard 401(k) plans do not have the option of physical gold. The closest one can come would be owning precious metals funds, gold stocks or other similar paper products.
While specific circumstances may allow for gold within a 401(k), such as in a self-directed 401(k), most people with a standard 401(k) account may have to look for other options in order to own physical gold or silver. This is where a gold rollover may come into play.
Gold IRA Rollover
There are several issues worth noting and exploring about this possible option:
- If you are still employed by the company 401(k) plan, you will likely not be able to roll over funds into a gold backed IRA. There may, however, be exceptions. It is best to check with your plan sponsor.
- One could also potentially keep his or her existing 401(k) plan and buy physical gold or silver through a separate, self-directed IRA account.
- 401(k) accounts from past employers can be rolled over into self-directed gold or silver IRA accounts.
For the purposes of this guide, we will focus on rolling over a 401(k) plan from a former employer.
- Pick a self-directed IRA custodian. New Direction IRA Regal Assets is the preferred custodian.
- Complete all necessary paperwork to complete the transfer of funds from your old 401(k).
- Once the IRA custodian has received all paperwork and funds, you may shop various gold and silver dealers for the products you wish to purchase.
- Once you have decided on a purchase and locked in a price with the precious metals dealer, the dealer will invoice your IRA custodian for payment.
- The IRA custodian and the precious metals dealer will arrange for shipment of your precious metals to an approved depository.
- Your IRA custodian will provide you with regular account statements on your gold or silver holdings.
Some issues to consider are:
- Custodian choice
- Depository choice
- Gold products to purchase
- Ongoing contributions
There are many gold IRA custodians to choose from. When comparing IRA custodians, some things one may want to compare include length of time in business, customer reviews and fees and expenses. Custodians may be compared online from the comfort of your home or office.
The same can be said for choosing a depository. There are numerous approved depositories to choose from in various locations. You may want to compare fees and expenses, as well as security and/or any insurance provided.
When it comes to choosing gold or silver products, there are regulations in place dictating what can be purchased within an IRA account.
Reasons to Invest in Gold for your IRA:
There are many possible reasons to invest in a gold or silver 401(k) rollover. No two investors are exactly the same, and investors may have different goals or concerns. Some of the potential reasons may include: inflation concerns, dollar devaluation, portfolio diversification, gold has a history of stability to offset stock volatility, or just a peace of mind.
If your 401(k) is from a previous employer, the process to roll it over to gold is fairly straightforward and simple. One should always, however, consult their tax professional before doing anything tax related or that may have tax consequences.
We hope you enjoyed How to Gold IRA Rollover Guide.