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Home » Gold IRA Rollover: Step by Step Guide

Gold IRA Rollover: Step by Step Guide

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The Truth About the Inflation Rate in the USA

How to do a Gold IRA Rollover

You must be proactive as a retirement investor in today’s market. This is very important to protect your wealth. Stock market volatility, currency debasement, and inflation are all threats. Converting a portion of your portfolio to hard assets that are not tied to the dollar, is recommended by top economists and investors. Did you know you could convert a portion of your 401k or IRA to physical gold or silver bullion? Investors who are looking to diversify and protect their wealth are increasingly turning to the Gold IRA Rollover. This is a method of transferring a portion of an IRA’s holdings into physical precious metals.

A Gold IRA allows you the option to have real precious metals in retirement on a tax-deferred basis or tax-free. You can easily fund a Gold IRA rollover by transferring assets and cash from an existing IRA.

This short guide will help you understand how to roll over your Gold IRA. You can convert stocks, bonds and ETFs into precious metals easily within a tax-advantaged retirement plan, such as a self-directed Roth or traditional IRA.

Gold IRA rollover

How do you do a Rollover?

As a hedge against inflation and economic uncertainty, a Gold IRA rollover allows you to convert part of your existing retirement account or investment portfolio into gold coins or bullion bars. A rollover allows funds to be withdrawn from an existing account. They can be kept for up to 60 days before they have to be redeposited in the new IRA.

Gold IRA Rollover vs. Gold IRA Transfer

When funding a Gold IRA, investors have two options: a rollover and a transfer. A transfer is a safer and more risk-managed way to move assets between retirement savings accounts. Investors should be aware of many Gold IRA rollover conditions and rules. Investors who break these rules could face costly penalties from the IRS. Transfers are subject to fewer rules than rollovers.

gold IRA rollover step by step guide

Below are some key differences between Gold IRA rollovers and Gold IRA transfers, as well as core similarities.

Gold IRA Transfer

A Gold IRA transfer, also known as “IRA gold transfer”, involves the transfer of funds from custodians to custodians. The account holder doesn’t receive any money taken from their account. Instead, funds are transferred between third parties directly without the involvement of the account holder. The custodians handle the entire process, which is a simple and straightforward procedure for account holders.

Rollovers are different from transfers in that the money distributed does not touch the IRA holder’s account. In this guide to general IRA rollovers, you will learn on how rollovers are regulated by the IRS, and the consequences for violating them. You can also read this Gold IRA FAQ section directly from Uncle Sam.

An IRA gold transfer is preferred by many because it reduces human error relative to a rolling transfer. Rollovers can lead to problems if funds are not transferred into the new account within the time limits set by the IRS. Failure to do so could result in a severe financial penalty from IRS. However, gold IRA transfers are immune to this error because the process is automatically handled by your account custodian.

gold IRA Rollover

401K to Gold IRA Rollover

Contrary to what investors think, it is possible to transfer funds from an employer-sponsored or self-directed 401(k), or to a Gold IRA. This process has slightly different rules and must be understood before you proceed.

It shouldn’t be difficult to roll over funds from a 401k that was sponsored in part by an ex-employer into a new Gold IRA. You can simply choose a new IRA custodian to initiate the 401k-to-IRA rollover. A 401(k) sponsored in part by your current employer can present more challenges when you want to roll over to a self-directed IRA.

See also  How to Make a Gold and Silver IRA Rollover

Check the terms of any policy if you are transferring from a 401k sponsored by your current employer. Employer-sponsored 401 (k)s may not allow gold investments while you are still employed. Ask your employer about your current 401k and whether you are allowed to transfer to a Gold IRA.

It is possible to transfer a current-employer 401k to a new Gold IRA. You can read our article on Gold IRA regulations and rules for a detailed explanation of the process. You can also find the complete guide on how to handle employer-sponsored 401k rollovers.

Choosing a Gold IRA Rollover strategy

There is no single way to invest in a Gold IRA. Your financial plan will determine the type of rollover strategy that you choose to fund your account. For example, readers often ask us: “How much of my portfolio should I allocate to precious metals?” There is no easy answer.

Your risk tolerance and retirement age will determine how much funding you allocate to precious metals like silver or gold. Investors who are not willing to take on too much risk and are within the ten-year mark of their retirement age may benefit from a greater allocation (e.g. 15-20%) to precious metals.

You can hedge against market volatility by adding alternative assets like gold, silver, and cryptocurrencies to your investment portfolio. Recent stock market instability was reflected in multi-year highs for spot prices of palladium, gold, and silver as well as a bullish run in Bitcoin, Ethereum, and other assets. An increasing number of investors are diversifying into uncorrelated assets like gold, as economic uncertainty has cast doubt over traditional markets.

Allocating Your Gold IRA Fund

The 5-10% rule is a mantra that some of the most successful investors in the world swear by (e.g., NBC Shark Tank’s Kevin O’Leary and Tony Robbins). However, there are many risk-averse investors that recommend going beyond this mark. These questions should help guide your decision-making process:

  • What is my outlook for the economy in the next 5-10 years?
  • Is my portfolio performing as expected in the last 5 years?
  • What is my true purpose in investing in physical precious metals? (e.g. diversification, risk management, or profit)
  • How close do I get to my retirement target?

The third question is of particular interest. It should encourage you to examine your own motives and determine what they are. In most cases, we find that our readers’ answers fit into three general orientations. These orientations describe the investor’s motivations for opening a Gold IRA. Below are each of these.

gold IRA rollover

Diversification Strategies

Diversification strategies refer to those who invest in precious metals to protect their portfolio against overexposure to bonds, stocks, or other traditional assets. Diversifying with gold is a common strategy for risk-conscious investors to minimize potential losses in the case of a stock market crash or recession.

This is a good choice for a 5-10% precious metals allocation. Investors should allocate approximately 10% of their portfolio to precious metals, such as platinum, silver, and gold. Investors with high-risk tolerance may not be able to dedicate more than this amount to these assets.

Debasement and Inflation Strategies

Investors who are concerned about currency debasement and widespread inflation may want to increase the amount of their portfolio that is made up of gold or silver. A gold IRA rollover can protect investors’ wealth from a falling U.S. Dollar because gold has been considered strategic hedging against inflation.

The U.S. faces a serious inflation threat. This is after the country experienced the highest year-over-year CPI increase ( +4.2%) in April 2021. During the 1970s notorious era of inflation, the exposure to precious metals. Investors who are concerned about the U.S. Dollar may find something in the 10 to 20% range in gold and silver a good option. If the dollar falls further, investors who have precious metals holdings will be more successful than those who do not.

Recession and Inflation Fears

People who are most concerned about the economic state and its sustainability in the future will be better off putting more money into precious metals.  Investors who are concerned about the U.S. Dollar may find something in the 10 to 20% range in gold and silver a good option. If the dollar falls further, investors who have precious metals holdings will be more successful than those who do not.

gold ira

Gold IRA Rollover – Choose IRS-Approved Bullion Bars

The IRS has strict guidelines regarding what type of assets can be kept in a tax-advantaged retirement plan. This guide to IRS-approved precious metals provides a comprehensive list of all authorized holdings.

According to IRS regulations, collectibles are strictly prohibited from any IRA and 401(k). An IRA of any type is strictly prohibited from rare coinage or any other precious metal that is classified as a “collectible” by IRC Section 401 (a). Gold bullion bars are not considered collectibles as a rule. There are three exceptions to the rule regarding coinage that allow you to invest in gold coins through a Gold IRA rollover.

  1. Certain coins described under 31 USC Section 5112
  2. All coins minted and issued in accordance with the laws of any sovereign country
  3. Keep coins or bullion in the custody of a bank trustee or non-bank trustee
See also  How to Buy Gold With a Self Directed IRA

Unapproved assets can lead to penalties and fines. It is safer to invest in gold bullion than rare coins. You can read our list of approved gold coins to see if you still want to invest in gold coins.

best gold IRA

Physical Gold IRA Rollover vs. “Paper Gold” Rollover 

There are two main types of gold exposure. The first is physical gold bullion. This refers to cold, hard metal bars that are stored in vaults by third-party custodians. This is also known as “paper gold”, which refers to any kind of gold-based security such as an ETF or gold mining stock.

It is hard to argue with the advantages of paper gold over real-metal bullion, aside from convenience. Investors love gold stocks because they have more liquidity. However, liquidity can be a double-edged sword as it makes it easier to sell and buy the asset quickly. Paper gold is more volatile than physical metal commodities.

If you are looking for true exposure to the advantages of gold investing, it is worth considering a physical Gold IRA Rollover. The gold stocks that you have might not be worth as much in the event of an economic crash or runaway inflation.

Top Benefits of Physical Gold:

Are you still not ready to sell? We’ve listed the top benefits of investing in physical gold as compared with securities-based exposure.

  • Counterparty Risk: Unlike a publicly-traded stock, a gold bar cannot declare bankruptcy or fail to honor its contractual obligations–therefore, physical gold investors are free from the same counter-party risks as paper gold investors.
  • Safe Haven Store Of Value: In an economic crisis, the physical bullion of gold acts as a last-resort store of value in the event that cash and paper assets become worthless.
  • Physical Ownership You own precious metal bars which are much more difficult to seize or confiscate than electronic assets.
  • Movable and Transferring: Gold Bars are portable and can be withdrawn directly from your IRA to your vault or hands in the form of a distribution.

These benefits aren’t exclusive to precious metals but they provide compelling reasons for gold and other metals to be a part of many investors’ portfolios.

Top Gold IRA Companies 

Our recommended Providers are researched and vetted by us and many top consumer organizations. This is the short list of the most consistent companies we could come up with. Request information from them below.

#1: Augusta Precious Metals

Our Rating: 10/10

gold ira rollover

Pros

✅ ZERO complaints with the BBB and BCA

✅ Highest reputation and customer satisfaction in the industry

✅ Non-commissioned sales team

✅ Transparent pricing with up to 10 years of fees waved – with certain minimum investments

✅ NFL Legend Joe Montana actual customer before becoming their spokesperson

Cons

❌ No way to setup online

❌ The minimum investment for IRA is $50,000


#2: Goldco

Our Rating: 9.9/10

Pros

✅ Low annual fees on IRAs

✅ Excellent Customer Service

✅ Free storage is available for non-IRA precious metals

✅ Highest levels of customer satisfaction in the industry

✅ Incentives available for certain purchase levels

Cons

❌ Signup process can only be done through a specific link

❌ Setup online not possible

❌ Minimum investment for IRA $25,000


#3: Birch Gold Group

Our Rating: 9.9/10

Pros

✅ Great company commitment to education and communication

✅ Impeccable customer service

✅ Silver, gold, platinum and palladium available

Cons

❌ Signup process can only be done thought a specific link

❌ Certain fees are not disclosed up front

❌ No buyback guarantee of precious metals


#4: Noble Gold Investments

Our Rating: 9.6/10


Finding the Best Gold IRA Custodian

Trustworthy Gold IRA companies help with the rollover process. These companies are transparent and will provide all documentation and paperwork necessary for the rollover. There will be no hidden fees or clauses.

Our guide to the most reputable IRA rollover firms will help you find a good place to start. There are a few basic rules to remember when searching for a Gold IRA custodian:

1. Reputation, Prestige

When looking for a Gold IRA provider, it is important to choose a company that has a solid reputation and a high customer satisfaction score. There are many companies that have malicious motives and prey on customers who are not paying attention.

Avoid precious metals companies that are not well-reviewed online. You can find authentic reviews and testimonials from customers on YouTube, Google My Business and Trustpilot.

The key word is “authentic”. Some companies publish paid-for reviews via their social media accounts. If all the reviews are similar in length and offer little information that distinguishes between the others, this could indicate that the reviews may not be authentic.

Only IRS-approved nonbank trustees are allowed to operate precious metals vaults. Move on to the next option if your custodian doesn’t mention being IRS-approved. Others will try to sell low-purity or numismatic gold that isn’t authorized for an IRA. Check out our approved precious metals list to avoid bad actors.

2. Rollover Limitations

Keep in mind that IRS allows only one penalty-free rollover within a 365-day period. If you rollover on July 1, 20,21, you can’t do another tax-free rollover until July 1, 2022. It is important to choose your custodian carefully. If you change custodians within the 12-month time period, you will be responsible for an early distribution penalty if the funds are rolled over again.

Top Gold IRA Companies

There are many precious metals IRA companies on the market. It can be difficult to choose the right one for you. We’ve compiled a list of the most trusted and bestselling companies in the industry. Each of these companies has been around for at least ten years.

Our reviews of the top Gold IRA providers provide a deeper analysis of the top custodians available. You’ll find a complete breakdown of the top-reviewed Gold IRA Rollover companies in the country, along with a list of five important considerations to consider when looking for a gold rollover.

Eligible Account Types to Rollover a Gold IRA

You can transfer funds from any tax-advantaged retirement account to complete a Gold IRA Rollover.

  • Traditional or Roth IRA
  • Self-directed 401(k)
  • Employer-sponsored 401(k)
  • SEP IRA
  • 403(b)
  • 457(b)
  • TSP

Employer-sponsored accounts such as a 457(b) or 401(k), may require you to facilitate rollover once you have quit your job. Some employers do not allow rollovers between accounts. You may be allowed to perform a partial rollover when you are still working after you reach 59.5 years.

Simply register a self-directed IRA with a Gold IRA provider to transfer funds from your existing account to a Gold IRA. To start the rolling over of the funds, you will need to fill out a transfer request questionnaire. Usually, funds will appear in the new IRA within 14 days.

How does a gold IRA rollover work?

The Gold IRA transfer (also known as “IRA gold transfer”) is a transfer of funds from the custodian to the other custodian. The account holder doesn’t receive money that is withdrawn from it. Instead, funds are transferred between third parties directly without the account holder being involved.

How do I roll my 401k into a gold IRA?

You will need to quit the company where you work and then roll your 401k into a self-directed IRA. You can then purchase gold once your 401(k), investment amount has been transferred to your self-directed IRA.   

Can I buy gold with my rollover IRA?

The majority of IRA custodians won’t allow you to have gold in your IRA. They will only allow you to invest in publicly traded securities such as stocks, bonds and mutual funds. Options and futures are not allowed. You need a self-directed IRA to own gold in coins and bullion. This is only offered by a handful of custodians.