How can I perform a gold IRA rollover? What does it entail? Does my retirement savings account qualify for a gold IRA rollover? If you’ve been asking yourself these questions and have found yourself here today, then you’re in the right place. In today’s article, I’ll address these questions, to help you get sufficient information to decide whether a gold IRA rollover is worth it.
For starters, I’m sure you’d like to know what a gold IRA rollover is, so we shall get that out of the way before we check out what other technicalities surround the process. A gold IRA rollover is when someone moves their funds in the pre-existing account into a self-directed IRA, that can hold physical gold or other IRS-approved precious metals, at a depository that’s also approved by the IRS.
A gold IRA rollover is one of the legit ways through which you can get to invest in physical gold for the sake of financial stability in your retirement years. Owning gold (or other precious metals) does not necessarily mean that you’ll amass the underlying benefits, but the historical trends of the prices of these precious metals bear a promise of their own. This is the reason behind the growing popularity of gold IRAs in the past few decades.
Are gold IRAs allowed by the law?
Yes. We know that IRAs were introduced back in 1974, upon the passing of the Employee Retirement Income Security Act. We also know that there was a Taxpayer Relief Act of 1997, that was passed by congress to enable people to hold a defined range of precious metals including gold, silver, platinum, and palladium in special retirement accounts. So, yes, a gold IRA is allowed by the law, and no one will come after you if you invest for your retirement years through one.
Which retirement accounts qualify for a gold IRA rollover?
You may have to confirm with your current self-employer about the possibility of holding gold in your current retirement savings account, but if this is not possible, you can do a gold IRA rollover. The following types of retirement accounts qualify for a gold IRA rollover:
- IRAs such as Traditional IRAs, Roth IRAs, SEP IRAs, Simple IRAs.
- Thrift Savings Plan
How can I transfer funds from my current retirement savings account to a gold IRA?
To successfully move the funds in your retirement account, you should establish your self-directed IRA with a custodian. The custodian must be a company that allows you to hold physical precious metals. Your precious metal dealer is highly likely to be authorized with a couple of custodians for you to choose from. Most of the metal dealers will also assist you to complete all necessary paperwork for a smooth transfer.
How to transfer funds from a traditional, Roth, or SEP IRA
If you intend to move funds from your IRA into a self-directed account, you’ll have to complete a transfer request form. The transfer request form will in most cases comprise of basic information about your existing IRA, such as:
- The name of your current custodian
- Your name
- Account number
- The amount you are transferring
Moving funds between one IRA and the other is considered a direct transfer because you do not get to possess the funds at any given point. Direct transfers take anything between 10 and 14 days.
How to do a rollover from a 401(k), 403(b), 457(b), or TSP
When moving your funds from a 401(k), 403(b), 457(b), or a TSP account to your new self-directed precious metal IRA, it is referred to as a rollover. Rollovers are permitted when one changes jobs or they’re in their retirement years.
Those aged over 59.5 years and are still employed by the company that created their 401(k) may qualify for what is referred to as an in-service distribution. With an in-service distribution, you can do a partial rollover, so contact your current plan administrator to confirm if you qualify.
Direct and Indirect Rollovers
There are two main types of rollovers, namely: direct and indirect rollovers.
Indirect rollovers are to some extent complicated and will require you to be keen throughout the entire process. With this type of rollover, your current 401(k) provider usually sends you a check, that you’re required to deposit to your personal bank account. You’re then required to re-deposit that money into the newly created SDIRA within 60 days. If you do not deposit the funds into an IRS-approved plan within the 60 days, and (or) you’re under 59.5 years, you will incur a 10% penalty.
A direct transfer, on the other hand, usually happens to custodians and is less complex. In this case, your 401(k) provider usually issues a check that’s payable to the new custodian. The check is mailed to you so that you can send it to your custodian. You can also request that the check is mailed directly to your new custodian.
Most of the 401(k) providers today can initiate a gold IRA rollover simply by making a phone call. With government-sponsored retirement accounts, however, one is required to complete their internal rollover documents. The entire rollover process can take anything between 2 and 6 weeks.
Note: You’re only permitted to make one rollover per account during a 12-month period. You’re however allowed to do as many custodians to custodian transfers as you would like to do.
You can consult with an expert from any of these gold IRA service providers on how to commence the rollover process.
What type of precious metals can you hold in your gold IRA?
If you’re serious about investing in gold, then it is required that you only purchase IRS-approved precious metals. Here are some conditions that your precious metals must meet:
- The gold must be 99.5% pure, silver 99.9%, platinum 99.95%, and palladium 99.95%.
- Bullion coins should be in brilliant uncirculated condition
- Proof coins should be in their original mint packaging and must be accompanied by their certificate of authenticity.
- Non-U.S. Mint coins, bars, and rounds must be accredited by their refiner, assayer or manufacturers, and should meet all minimum purity requirements.
Are you ready to get started with your gold IRA rollover? If yes, check out the recommended IRA smart solutions below:
That will be all for this article in which we’ve addressed the question “How can I perform a gold IRA rollover”. Let me know if you enjoyed it, and found it helpful. If you have any questions about the subject matter as well, do let me know so that I can respond to them ASAP.
I wish you well,
Eric, Investor and Team Member at Gold Retired!