What is a Gold IRA Rollover?

The retirement industry today is a volatile economy. Consequently, most of the world’s leading investors recommend turning part of their portfolio in gold. This is especially true for those nearing retirement age or already in retirement.

A gold IRA rollover allows you to invest in physical gold, silver, and platinum without having to pay taxes on the transaction. This type of account also offers more flexibility when it comes to distributions and is not subject to the same early withdrawal penalties as a traditional IRA.

There are a few things you need to know and do before setting up a gold IRA rollover. This quick guide will walk you through the process step-by-step so that you can make the best decision for your retirement savings.

What is a Gold IRA Rollover?

A gold IRA rollover is a type of retirement account that allows you to invest in physical gold, silver, and platinum. The biggest advantage of a gold IRA rollover is that you don’t have to pay taxes on the transaction.

There are a few different ways to set up a gold IRA rollover. The most common is to transfer funds from a traditional IRA or 401(k) into a gold IRA. You can also roll over funds from a Roth IRA into a gold IRA, but you’ll have to pay taxes on the transaction.

Another way to set up a gold IRA rollover is to set up a new account and contribute money to it. This is known as a direct rollover. With a direct rollover, you don’t have to pay taxes on the transaction.

Physical Gold IRA Rollover vs. “Paper Gold” Rollover

When you set up a gold IRA rollover, you have the option of investing in physical gold or “paper gold”.

Physical gold IRA rollover: With a physical gold IRA rollover, you’re actually buying and storing physical gold coins or bars. The advantage of a physical gold IRA rollover is that you have complete control over your investment. You can take possession of your gold at any time and store it wherever you want.

The downside of a physical gold IRA rollover is that it’s more expensive and difficult to set up. You’ll need to find a place to store your gold, and you’ll have to pay for insurance and security.

Paper gold IRA rollover: With a paper gold IRA rollover, you’re not buying physical gold. Instead, you’re investing in gold-related investments, such as gold mutual funds, gold ETFs, and gold mining stocks.

The advantage of a paper gold IRA rollover is that it’s cheaper and easier to set up. You don’t have to worry about storing or insuring your gold.

The downside of a paper gold IRA rollover is that you don’t have complete control over your investment. You’re also at the mercy of the stock market. If the price of gold goes down, so will the value of your investment.

Gold IRA Rollover vs. Gold IRA Transfer

When you set up a gold IRA rollover, you have the option of transferring funds from a traditional IRA or 401(k) into a gold IRA. You can also roll over funds from a Roth IRA into a gold IRA, but you’ll have to pay taxes on the transaction.

A gold IRA transfer is when you move funds from one retirement account to another. A gold IRA rollover is when you set up a new retirement account and contribute money to it.

With a gold IRA transfer, you don’t have to pay taxes on the transaction. With a gold IRA rollover, you will have to pay taxes on the transaction if you’re rolling over funds from a Roth IRA.

The advantage of a gold IRA transfer is that it’s simpler and there are no tax consequences. The disadvantage of a gold IRA transfer is that you can only do it once every 12 months.

The advantage of a gold IRA rollover is that you can do it more than once per year. The disadvantage of a gold IRA rollover is that you’ll have to pay taxes on the transaction if you’re rolling over funds from a Roth IRA.

401(k) to Gold IRA Rollover

If you have a 401(k) through your employer, you may be able to roll it over into a gold IRA. The process is similar to rolling over a traditional IRA or Roth IRA.

The advantage of rolling over a 401(k) into a gold IRA is that you don’t have to pay taxes on the transaction. The disadvantage of rolling over a 401(k) into a gold IRA is that you may have to pay a penalty if you withdraw money from the account before you’re 59 1/2 years old.

Gold IRA Rollover Process Breakdown

The process of setting up a gold IRA rollover is relatively simple.

First, you need to find a gold dealer or broker who specializes in gold IRA rollovers. You can do this by searching online or contacting your financial advisor.

Once you’ve found a gold dealer, you’ll need to open a self-directed IRA with a custodian. A self-directed IRA is a type of retirement account that allows you to invest in alternative investments, such as gold.

Once your self-directed IRA is set up, you can then roll over funds from your traditional IRA or 401(k) into it. You can also make new contributions to the account.

Once the funds are in your self-directed IRA, you can then purchase gold. You can either buy physical gold or invest in paper gold.

Once you’ve purchased gold, you’ll need to find a place to store it. You can store it at home, but you’ll need to make sure it’s properly insured and secured. Alternatively, you can store it with a third-party storage company.

What Types of Retirement Accounts Qualify for a Gold IRA Rollover?

Most types of retirement accounts, including traditional IRAs, Roth IRAs, and 401(k)s, can be rolled over into a gold IRA. However, there are some exceptions.

For example, you can’t roll over a SIMPLE IRA into a gold IRA. And if you have a 403(b), you can only roll it over into a gold IRA if you’re rolling it over into a Roth IRA.

To be eligible for a gold IRA rollover, your retirement account must be held at a custodian that allows self-directed IRAs. Not all custodians allow self-directed IRAs, so you’ll need to check with your custodian to see if they do.

Should I get a gold IRA?

There are a few things to consider before deciding if a gold IRA is right for you.

First, you need to decide if you want a physical gold IRA or a paper gold IRA. Physical gold IRAs require you to purchase and store gold, which can be expensive and complicated. Paper gold IRAs invest in gold-backed investments, such as gold ETFs, which are less expensive and easier to manage.

Second, you need to consider the fees associated with a gold IRA. Gold IRA custodians typically charge annual fees, storage fees, and transaction fees. You’ll need to compare the fees charged by different custodians to find the most affordable option.

Third, you need to consider the risks associated with gold investing. Gold prices can be volatile, and there’s always the risk that you could lose money.

Fourth, you need to decide if you want to roll over an existing retirement account or open a new one. If you roll over an existing account, you may have to pay taxes on the transaction.

If you’re considering a gold IRA, there are a few things you need to keep in mind. But ultimately, whether or not a gold IRA is right for you depends on your investment goals and risk tolerance.

Deciding on a Gold IRA Rollover Strategy

Now that you understand the basics of gold IRA rollovers, it’s time to decide on a strategy.

If you’re rolling over an existing retirement account, you’ll need to decide how much gold to allocate to your IRA. A common rule of thumb is to allocate 10% to 20% of your portfolio to gold.

If you’re opening a new account, you’ll need to decide how much to contribute. A common rule of thumb is to contribute the maximum allowed by the IRS ($5,500 for IRAs and $18,000 for 401(k)s in 2018).

Once you’ve decided how much to allocate or contribute, you’ll need to choose what type of gold to buy. You can choose from a variety of gold-backed investments, such as gold ETFs, gold mutual funds, and gold mining stocks.

You’ll also need to decide where to store your gold. You can store it at home, but you’ll need to make sure it’s properly insured and secured. Alternatively, you can store it with a third-party storage company.

No matter what strategy you choose, be sure to do your research. This article is for information only and not meant as financial advice, so consult with a financial advisor before making any decisions.