This post will discuss the Gold IRA Rollover topic. What is a Gold IRA Rollover and how do you make a rollover from your current 401k? This is some of the topics we will cover today. The topic is a very topical one in today’s economy, as the current (economic) climate is pretty unstable, to say the least.
It is not strange that more and more people are looking for gold investments to play it safe with their retirement savings. Gold has over history proven to stand tall when everything else fails, and it will (most likely) continue to do so.
In the last 5-7 years, a gold backed IRA has become very popular among high net worth investors. The main reason for this is due to the fact that throughout history, gold has always increased in value when other investments, such as stocks and bonds, mutual funds, etc have decreased in value.
This is nothing new and you probably already know that gold is negatively correlated to stocks
Why gold is the #1 choice by smart investors?
Gold continues to stand out as the absolute nr 1 popular precious metal in the market. It is a clear mark of wealth and prosperity due to its limited supply and perceived value. As you might already know it has risen more than 4 times in price compared to the US dollar since 2001.
Gold will also continue to hit record heights in price (for years to come) if any of the following will happen:
- Currencies fail
- The stock market fail
- More unemployment
- foreclosure rates
- National debt
- Rising inflation
As you might figure, gold is still considered as a solid investment strategy by investors all over the world, and you can only look at the very well-known and successful businessmen (and women) who invest in gold to confirm your thoughts.
As paper money continue to prove to be anything but stable, gold is considered to offer protection against inflation and many other “side effects” of political and government overspending. IRA rollovers have become popular among investors as it offers protection of their retirement account, or simply for the investor looking for a more diversified and safe portfolio.
Transfer vs Rollover
The notorious IRS has a very clear distinction between the 2, despite that many people think that any movement of funds is called a rollover.
Rollover: When the funds first move to you and you then make a deposit into the other account
Transfer: When the funds move from one custodian to the other without you seeing the money
Gold IRA Rollover – How it works
Performing a rollover from your existing account can seem like a complicated task, but when done in a smart way, it is very cost (and tax) effective. If you are interested in this then you might want to check out our #1 recommended company Regal Assets, this is how simple it works:
- Visit their website and fill out the IRA rollover form (or call them directly)
- Let the experts help you with any of your questions
- You can have your IRA account opened in as little as 24 business hours
Important to mention:
There are many other IRA companies out there, however, as we get so many comments from our website visitors who have been ripped off and scammed by shady dealers out there, mostly in the form of so-called hidden fees, it is important that you know exactly what the cost will be before you sign anything. 100% transparency is what you are looking for here, so please compare different alternatives against each other before you make any decision.
Our absolute #1 recommended one is Regal Assets though, as their reviews and ratings from their clients are second to none in the industry. That is the main reason, then there are some other obvious reasons why we have them as our #1 recommendation:
They got great customer service, a one time flat (low) storage fee, reliability, 100% transparency, and with the most positive reviews from the most 3rd arty consumer protection agencies in the industry.
They are endorsed by some pretty prominent people, Official member of the Forbes Finance Council, a listed U.S. Mint retailer and got (by far) the most impressive reputation in the industry.
Looking at the stock market nowadays makes it even more of a no-brainer to start thinking about gold investing as a pretty obvious alternative. When you think about the security a gold IRA provides you, and then weigh in the trend of the New York Stock Exchange…
Remember back in October 2017? The Dow Jones Industrial Average reached its peak and closed at 14,164. Then almost immediately after that, the great recession of 2008-2009 made its entrance, causing it to drop to 11,000 in April the same year. Dow Jones continued to drop (straight down) all the way to a very low 7,552 in November 2008.
This was (of course) very painful for all the investors who had retirement funds that depended on those stocks. Shareholders went into panic mode and started to “run” out from the market. Many even experienced a total loss of the value of their investment.
This decline of the Dow never affected investors that had gold IRAs…
Many experts are predicting another crash, and some of them (not a few) are even saying that this one will be the worst one ever, some even go as far as saying that this one will bring the U.S. dollar down for good. So it isn´t that strange that so many investors are looking in the direction of including gold, but also other precious metals with 401k and gold IRAs.
401k Rollover to a Gold IRA
You can relocate your existing 401k (or any other retirement instrument) to a precious metals investment, like gold for example. This gets the value of your portfolio protected against devastating drops. As mentioned earlier, the gold price is well-known to have a negative correlation to the stock market.
So, when the markets go down, gold in particular rise in value instead. Therefore it makes sense to invest in gold, especially in the times we are in, as it minimizes the risks and is a way to protect your savings.
Back in 2011, the price of gold rose 32,8%. This increase was (mainly) a direct consequence of the many investor’s activities in the precious metals market in the form of precious metals IRAs along with other vehicles that retain their value regardless of the general currency supply. As the investment of this type sustained, the price of gold eventually drove up to over 50% in September 2011.
It is in times of high inflation when gold really comes out as a protection against devaluation and offering returns of over 130%. If you compare this to the 12% return, which is the market gain for the average stock. In the last decade, in times of inflation, the gold more than doubled in value.
Rules for an IRA Rollover
Investing in a gold IRA is very similar to any other individual retirement account instrument. The main difference lies in the fact that it is actually real physical gold that is being held in the account rather than paper currency, contracts, and “promises”.
Transferring your current 401k (or IRA) need to be done via an Internal Revenue Service approved rollover procedure. It is tax-free. Your gold will then be stored in a secure location until you either choose to sell it for cash or have it shipped to you.
The gold IRA funds will be in custody of the particular company of your choice and it will also offer you different asset plans to choose from. The only thing you need to do is to fill out the paperwork that is required to open up your personal IRA with your chosen custodian.
Standard IRA vs Roth IRA
The difference between a standard IRA and Roth IRA is that in the standard one, your funds are invested in a tax-free way until you choose to withdraw them. In a Roth IRA, on the other hand, the rollover is normally applied once taxes have been calculated and can then be withdrawn tax-free.
In either option, you must have completed the transfer of funds within 60 calendar days to avoid your funds being removed from the original IRA and to avoid large fees (or fines) by the IRS.
You made a wise decision to read this article, and you are a smart person. There is no reason why you should be struck by IRS fees and fines, simply do it in the right way and you will be fine.
Talk to your financial advisor and take it from there. Make sure to educate yourself further on your different IRA custodian alternatives out there as well.
Below is our Top 5 List of Recommended Gold & Silver IRA Providers, so you might want to start there:
I hope you found this short article on how a Gold IRA Rollover works, and on 401k to be helpful. Please hare your own experience in the comment section below as it can help others. Also, if you got any questions about this I will be more than happy to answer them below!
I wish you the best!
Founder of: Gold Retired