Investor’s Guide For Tax-Free 401k Rollover To Gold

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401k To Gold IRA Rollover

Protect Your IRA or 401k

The process varies slightly for people who are rolling over funds from a 401(k) established by a former employer, as opposed to those who are still working for the same employer. It’s easier with a former employer, since the custodians of the new IRA and the old 401(k) are both authorized to deal with each other directly. They will take care of the paperwork and complete the transfer of funds.

If the account holder is still working for the employer, rolling funds out of an employer-sponsored 401(k) plan requires the employer’s approval. It’s important to do this so as to not get hit with taxes for withdrawals. Once it is approved, the rollovers may be accomplished in the same way between the two custodians as described above.

Before opening the new IRA with the best gold IRA rollover firm, it would be advisable to enquire about the exact nature of their support for investments in metals. Not all financial institutions support these kinds of IRAs. Those firms that do allow account holders to invest in gold, silver, platinum, etc. Have differing levels of support.

On top of this, there are federal regulations that must be followed. Some are set forth by the IRS and some are laws passed by Congress limiting the kind of metal that may be purchased and the way it is stored. For instance, the purity of the gold bullion or bars purchased must be 99.5 percent or more in order to be eligible as a qualified IRA investment.

There are certain unique expenses associated with holding metals within an IRA. Apart from shipping and insurance costs, the other major expense is storage. The custodian is required to hold the metal at all times, and obviously it can’t just be locked up in an office safe with bonds and stocks. The custodian deposits it in bank vault, and the receipts of this deposit are required to be part of the account documentation.

Another way to invest IRA funds rolled over from a 401(k) is to buy into the shares of a mining company that has bullion mines. There are no doubt other factors involved, but the single biggest thing that causes the share price to go up or down is the price of the metal the company’s mines produce. Buying shares also eliminates the hassle and costs of buying and holding the metal.

The main benefit of going through with a 401k rollover to gold is the favorable tax treatment. The rollover of funds directly from the 401(k) to the IRA ensures that the funds are not taxed coming into the IRA. It’s also possible to get the same tax benefit if the funds are paid out to the account holder, who then transfers it to the IRA within 60 days. Furthermore, as long as the metal hoard remains inside the IRA, it is allowed to grow tax-free.

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Kelly Lyalls

A cornerstone of a gold retirement plan is the recognition that everyone's economic & life situation is unique. Personalized service is essential. Let the experts at Regal give you one less thing to worry about, so you can have the retirement you deserve

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