The Process of 401(k) to Gold IRA Rollover

Rolling your 401(k) plans into a Roth or traditional IRA is a prevalent practice done by others. You may decide to do this when you choose to leave your previous company and consolidate your retirement savings in a single place. However, because of the market’s volatility today, many people are looking to diversify and do hedges.

This means that these people are looking for assets that will be more balanced than their company shares, which can be in the form of gold. If this is what you are considering, you may want to do a gold IRA rollover from your 401(k) plan. This can be a smart move for some people when they want to invest in a more tangible asset like gold and other precious metals.

About the Gold IRA

Because of the IRS Taxpayer Relief Act in 1997, the Gold IRA was made possible and became legal to be incorporated into retirement accounts. This is when you decide to buy bullions or coins and get a custodian to secure them for you until you retire.

The good news is that with this type of account, you have so many options, and it’s not just about silver, gold, platinum, and palladium. These self-directed IRAs can offer you a more diversified portfolio compared to a traditional individual retirement account.

As a side note, it’s essential to understand that you can’t collect any of the four metals mentioned. The Internal Revenue Service has a list of specifications, fineness, and other requirements that must be satisfied before you can incorporate gold into your Roth IRA. Know more about Roth IRAs on this page here.

Opening the Account

The process of starting a retirement account in gold is straightforward. The first thing is to find a legitimate and trusted custodian who is already working in this industry for centuries. It’s illegal to keep the gold and the metals inside your house or safe, and you need someone willing to hold the bullions you have purchased. One of the things you can do is call your local bank or credit unions and make sure that they have a strong track record.

List the metal dealers in your area as they will allow you to sell gold when needed. The custodians may provide you with a list of brokers whom they trusted and previously worked with, so you may want to get this as a starting place. Once you find a broker, you can open an account using the right platform to start purchasing precious metals. When you retire, you may want to liquidate the value of the bullions into cash or collect the metals for yourself.

Handling the Rollover of your 401(k)

Once you have an account in place, contact the company that’s currently managing your 401(k) to start the process of rollover. What you need is to know more about a direct and indirect rollover because both involve withdrawal of funds and depositing it into another. With the direct one, the process is moved directly from the 401(k) to the Roth IRA, which can be simple.

If you choose the indirect option, you have about 60 days to sort the funds you’re receiving and transfer them into a gold IRA company or a qualified custodian. The taxes get into the picture when the withdrawal is not completed within the 60 days grace period. You may get lucky, and if you’re more than 59.5 years old, there’s no need to pay the 10% early withdrawal penalty. Read more about penalties here:

If you have an option for a rollover, you also need to provide the handling company’s particular requirements for this process. Once you meet the prerequisites, the company sends checks for funds from the 401(k) account to the gold IRA custodian or you. At this point, you have already completed the rollover and watch your money grow.

Should You Do This?

The rollover is ideal for people who are looking to diversify their investments before retiring. This is an option for retirement because gold lacks the stock market’s volatility and the paper currencies. In each case, you may want to consider the maneuver, especially if you know that you’ll have plenty of years to wait before retiring.


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