Gold IRA Rollover Guide

Best Gold IRA Rollover Guide
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Why and How to Convert 401k to Physical Gold

Investing in Gold IRA is a safe choice to protect your retirement from the economy of ever-changing paper investments such as stocks, bonds, ETFs, real estate, etc. To invest in Gold IRA is easy for both people looking to invest in their retirement and people looking to buy precious metals for private collection.

When opening your gold IRA account, you can either choose to fund it through cash, but it is better to fund it through your 401K due to its tax advantage and safety.

Those who have an active traditional IRA account and are interested in investing in Gold IRA easily convert their existing 401K account to physical gold.

This guide is aimed to explain all you need to know about converting your 401K account to a gold IRA.


Difference Between Rollover and Transfer

Difference between transfer and rollover

It is important to note that there’s a difference between a rollover and a transfer. Oftentimes, people confuse the two terms and refer to both of them as rollover.

People tend to think that the movement of funds from one retirement account to another is a rollover. However, the IRS highlights the distinction between a rollover and a transfer.

• In a gold IRA rollover, the money from your existing IRA is paid to you then it’s deposited into your new gold IRA account.

To activate a gold IRA rollover, you will directly receive the money from your current custodian, after which you have a window of 60 days to deposit the money with a new and legitimate gold IRA company or custodian.

Failure to complete this transaction between the period of 60 days after receiving the money, will make you subject to a 10% withdrawal charge as tax accruable. When withdrawing from a personal IRA for a rollover to another IRA does not attract tax. However, you can only carry out one rollover per year.

• Transfer works a little differently. The custodian of your existing IRA account moves the fund directly to your new gold IRA account. Your new custodian receives the money and invests it on your behalf. In transfer, the money is not first paid to you like in rollover.

Unlike in rollover where you receive the money from your custodian and deposit it with your new custodian. A transfer is a custodian to custodian transaction. Since you don’t receive funds, you don’t have to worry about the 60-day transfer window.

The transfer is usually an electronic transfer from your old custodian to the new one. Your old custodian can also issue a cheque to your new custodian.

A transfer is the most convenient way to invest in gold through your IRA because it allows your custodian to take care of the transaction for you.

401k To Gold IRA Rollover

401k to Gold IRA Rollover guide

Now, let’s talk about rolling over your 401K to a gold IRA.

If you have a 401K account, rolling it over to a gold IRA shouldn’t be a difficult task. However, if what you have is a retirement plan by your employer, you will need to check in with your employer to see if you’re allowed to roll over your benefits to a gold IRA.

It’s important that you understand your 401K plan before attempting a gold IRA rollover. Understanding the restrictions around your 401K and your company or employer policy regarding gold IRA rollover will help you understand which obstacle you need to scale.


Choose Your Gold IRA Rollover Investment Plan

Gold 401k investment plan

Before rolling over your 401K account to a gold IRA, the first thing you need to do is to select a rollover allocation strategy.

One of the dilemmas that people who want to roll over face, is the question of how much should they move from their 401K account into the gold IRA? While they might realistically be no answer to this question, experts have offered their opinion and they mostly agree to a 5-10% benchmark. Although aggressive investors can sometimes go above this benchmark.

Before investing, it’s important that you shouldn’t punch above your weight. You should also consider some factors such as your objective.

Are you diversifying or holding for profit? What are your long-term plans? Etc.

Here are some of the factors you should consider.

• Diversification

If you’re looking to reduce your investment from stocks or bonds to more safe and stable investments such as precious metals, allocating 5-10% of your entire portfolio to precious metals is a good way to diversify and protect a part of your wealth.

Investors who desire to protect their wealth from the capricious nature of the capital market tend to invest more in precious metals.

Essentially, if you’re moving closer to retirement, you should invest more in a safe and stable venture as precious metals instead of a risk-filled capital market.

• Lack Of Faith In The Dollar

A dip in the dollar can make your investment in equities lose value and cause you to suffer a loss. If you’re not sure about the stability of the dollar in the future, you should roll over a bigger part of your 401K to gold IRA.

To save your wealth from losing value when the dollar dips, you can rollover 10-20% of your 401K to a gold IRA. From time immemorial, gold has always weathered the storm when value currencies plummeted due to economic and financial crises.

Precious metals offer you safety from dollar devaluation and the more you want to be immune from the future uncertainty of the dollar, the more you should invest in precious metals.

• Lack Of Faith In The System

If you have doubts about the capital market and how long it will endure, you should roll over a bigger part of your 401K to your gold IRA.

The price of gold isn’t generally affected by the collapse of the capital market. You should edge your risk by investing 20-30% of your 401K to your gold IRA. This will give you a safe landing if the stock market crash.

For whatsoever reason if might want to roll over your 401K to gold IRA, one thing you should remember is to keep it safe. You can start with a lower allocation which you can increase gradually after monitoring the progress of the gold market.

More importantly, when rolling over your 401K to gold IRA, you should ensure that you invest in IRS-approved precious metals.


Understanding The Difference Between Paper Gold Investment And Physical Gold Investment

Several gold IRA companies offer investors an opportunity to invest in paper gold which is different from physical gold. Paper gold is an investment in gold mining stocks or mutual funds.

Paper gold Investment is different from physical gold and it’s important to distinguish between the two.

Physical precious metals are tangible unlike paper gold are documents of Investment in gold stocks, bonds, and ETFs. Paper gold Investment doesn’t carry much difference from investment inequities. If you want security from the instability of equities, you should invest in physical precious metals, not paper gold.

If you’re wondering what are the benefits of investing in physical gold over paper gold, then continue reading.


Essential benefits of physical gold hood over securities-based gold:

• Portability

The tangible nature of physical gold means that you can withdraw it from your IRA gold storage and hold it yourself. Having your precious metal in your possession allows you to turn it into money whenever you desire. Unlike paper gold that is merely a document of your stocks which you still have to go through the rigorous process of selling through a stockbroker if you want to convert it to money.

• No Counterparty Risk

Physical gold doesn’t make you dependent on a company to make the wise choices before you can earn a return on your investment. Physical gold allows you to personally manage your assets without having to depend on another party.

• Security

It is almost impossible to accurately predict the next economic meltdown or financial crisis and this can lead to a loss of Investment when the stock market crashes. Physical gold is immune from a stock market crash which makes it a good way to protect your wealth from uncertainty and instability.

• Ownership

Physical gold gives you complete ownership of your asset. Which means you can do with it as you deem fit. Unlike paper gold that depends on the actions of a company.

Understanding the difference between both assets will give you the necessary information to choose the right choice when you want to roll over your 401K to gold IRA.


Appointing A Qualified IRA Custodian For Your Gold IRA Rollover

Gold IRA Qualified Custodian

Before handing over your 401K to gold IRA to a company, it’s important that you first carry out thorough research to find the best Gold IRA company, as well as ascertain the company’s capacity.

Below are the factors you should consider before choosing a custodian for your Gold IRA Rollover.

• Qualification

You should be sure that your retirement savings are being managed by a qualified company with all the requisite documents and certification. You don’t want to fall prey to scammers and profit-hungry firms. The custodian should have all the necessary licenses, bonds, and insurance to protect your asset.

• Responsiveness

The custodian should be well-grounded in Investment and tax laws surrounding Gold IRAs and 401K rollover. They should also be able to give you a breakdown of all you need to know to make the right investment decision.

It’s important to point out that the IRS only permits one tax-free 401K rollover per year. The rollover must be within the first 60 days of receiving the funds from your current IRA custodian. Failure to complete the rollover within 60 days will subject the funds to withdrawal tax.


Advantages of Moving 401k To Gold IRA

Benefits of moving 401k to Gold IRA

Let’s take a look at the advantages of moving your 401K to a gold IRA. A notable advantage of a gold IRA is that it gives you significant control over your asset.

Below are the advantages of moving your 401K to a gold IRA.

• Control Your Asset

401K doesn’t offer you the freedom to control your asset and do with it as you please. Gold IRA, on the other hand, gives you the freedom to control your investment.

• Fees Control

You can choose a gold IRA custodian and negotiate a reasonable fee for their services. You don’t have to break the bank to afford the service fees of a gold IRA.

• Funds access

With Gold IRA, you are in possession of your precious metals, which means you have direct access to thousands of dollars. Unlike 401K where withdrawing funds isn’t simple, it’s easy with a gold IRA.

• Roth IRA option

You can partially or completely convert your 401k into physical gold. It also comes with tax-free benefits on contribution.


Drawbacks of Rollover 401k to Gold IRA

Since we considered the advantages of rolling 401K to Gold IRA, it is only right that we consider the disadvantages to give a clearer picture.

Weighing the advantages against the disadvantages of rolling over your 401K will help you arrive at the best decision for your asset and future.

• No Separation From Service Exemption

While it’s isn’t encouraged that you should withdraw from IRA before you turn 59½, with a 401K you get a ten percent waiver on tax penalty for withdrawal before the 59½. However, IRAs don’t have such an exemption.

• Lesser Law Protection

401(k)s are ERISA plans which give them more legal protection. With 401K, your account won’t be under threat to civil cases, bankruptcy, or creditor demands. have a lot more legal protections. Gold IRAs on the other hand only allow for as much as $1,362,800 to be untouchable during bankruptcy cases.

• Ease Of Merging With A New Job Plan

When you change jobs, you can easily merge your new 401K plan with your existing plan. However, this isn’t always the case with a gold IRA.


Rolling over your 401K to gold IRA is a way to edge your asset from risk and also plan for a safe and stable future. It also gives you control over your asset. Converting your 401K to physical gold is easy and straightforward.
You need to collect your 401K cash from your custodian and complete a rollover to your gold IRA custodian within 60 days.

Self-Directed Gold IRA Wealth Confiscation

Convert Your 401K or Traditional IRA to Self-Directed Gold IRA

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