Keep in mind if you’re still employed by the organization that sponsors your 401k, it’s unlikely you will have permission to transfer your funds into a precious metal backed IRA. There are exceptions to this so it is worthwhile to check with your plan sponsor, but keep in mind that a new 401k plan with a current employer may need to be cashed out. Cashing out involves tax liabilities and penalties that need to be very carefully considered.
A 401k account is a savings plan that permits workers to invest a portion of their pay before their taxes are taken out. Besides the expectations of salary and medical benefits, these savings accounts have become an important part of almost every comprehensive employment package. It’s even common for larger employers to match a percentage of the employee’s contribution to keep high-quality talent and attract more.
401k’s came about in the 1980s as a response to the mounting expenses associated with managing employee pensions. They were designed as a mechanism to help employees save and invest for retirement without having to exert too much effort in managing their own funds. And while they have been widely popular and successful that doesn’t mean a 401k is right for everyone or right for your entire life. Depending on your age, occupation and financial position, you could benefit by rolling over your 401k into a Gold IRA.
Do you have a 401k account setup you’re interested in transferring a gold IRA rollover? If you do, Nationwide Coin & Bullion Reserve can help you roll it over into a Gold IRA with a few basic steps:
1. Pick A Self-Directed IRA Custodian
While most IRA custodians limit you to buying traditional investments, self-directed account trustees let you choose from additional investments that meet Internal Revenue Service rules, including gold, silver, and other precious metals. To purchase these types of commodities for your IRA, open an account with a custodian that specifically allows you to hold precious metals and will arrange storage. Remember, under IRS rules, you can’t take personal possession of physical gold held in an IRA.
2. Roll Over Eligible Funds
Once you’ve selected a custodian and you’ve submitted all over your paperwork to them, you can roll over your eligible funds from your 401k. To get started just contact your plan administrator and let them know you will roll over funds to your self-directed IRA. They’ll typically send you paperwork to fill out and then forward the money to your IRA account. If the money goes to you, it’s very important to put it in your self-directed IRA within 60 days after receipt. The IRS will still consider it a tax-free rollover as long as it gets redirected to the new account within the 60-day period.
3. Purchase Gold & Precious Metals With Your Gold IRA
When your funds have been added to your self-directed account, you can shop for gold, silver, and other precious metals. The gold you purchase for your IRA should be at least 99.5% pure and in the form of bars or IRS-approved, non-collectible coins like the gold American Eagle. Contact your precious metal dealer to let them know you’re buying the bullion for your self-directed IRA and then direct your custodian to pay the dealer out of the funds in your IRA.
4. Arrange Shipment to An Approved Depository
After you have decided on a purchase and locked in a price with the precious metals dealer, the dealer will invoice your IRA custodian for payment. Once funds clear, the dealer will ship your gold to your custodian’s storage facility. Verify with the dealer and your custodian that the items have arrived and always remember to ask for a receipt to keep a personal record.
5. Regularly Check Account Statements on Your Holdings
With your gold IRA rollover completed and your first purchases secured you can look forward to regular statements about your holdings and investments from your custodian. Tracking your investments will help you stay abreast of when to add more or sell a portion of your portfolio as you navigate the market and prepare for your retirement.
Nationwide Coin & Bullion Reserve can help you complete a 401k to gold IRA rollover if you meet the requirements. Call us today to learn more from one of our consultants and get an update on your opportunities for investing in gold, silver and more with your retirement accounts.