How To Move 401k To Gold Without Penalty

How To Move 401k To Gold Without Penalty


When self-directed IRAs were created in 1974 (via the Employee Retirement Income Security Act – ERISA) Real Estate was the main asset that investors held in the Retirement accounts. Silver and Gold were added to the list of assets allowed in self-directed IRAs under the Taxpayer Relief Act of 1997. 1998 saw Palladium and Platinum added to the list of IRA-approved Precious metals. A self-directed IRA can hold any one of these four Precious metals, or a mixture of them. There is no distinction between a Silver IRA, a Gold IRA or a Precious metals IRA – these are just different names for a self-directed Precious metals IRA. According to U.S. Code 408, only certain types of Silver and Gold are allowed in a self-directed IRA. With the exception of American Eagle Coins all IRA-approved metal is required to be at least 99.5% pure. Gold American Eagles are only 91.6% pure while Silver American Eagle Coins are 99.9% pure. IRA metal can be in either bar or Coin form. The IRS requires that any metal in an IRA account comes from a government mint (America, Canada, Australia, United Kingdom, and Austria are most common) or approved third-party mint.

How To Move 401k To Gold —



No matter if you have an eligible 401(k), IRA, TSP, Pension plan, Annuity, or other tax-advantaged Retirement account, you follow the same steps for converting your paper Stocks, Bonds, & Mutual funds into physical Precious metals. First you open an account at the Gold IRA company of your choice. Then you initiate a rollover or transfer from your existing tax-advantaged account into the Gold IRA account. Once the Gold IRA account is funded you get to choose the metals you want to hold and whether you want them in bar or Coin form. It is really that simple. You can also get assistance from knowledgeable specialists at all Gold IRA companies. They can answer your questions and provide suggestions when needed. The IRS does not allow fractional ownership of bars or Coins. For example, you aren’t allowed to hold 1/3rd of a one-ounce Coin in your account. if you want to deposit $25,000 into your Precious metals IRA you may end up depositing a little bit more or a little bit less money because of the fractional rule. When choosing the metal for a $25,000 deposit you would select metals that resulted in an overall value close to $25,000.

Move 401k To Gold



Each investor's metal is kept in their name by the Custodian, in the same way a Broker-Dealer holds mutual fund Investments or Stock shares on behalf of the investor. All Gold IRA companies have established relationships and agreements with IRS-approved metals storage facilities. You will select one of these Depositories after you open a Gold IRA Account. Most Gold IRA companies will allow you to select any Depository that you want even if it isn’t a Depository that they normally work with. Some investors choose their Depository by location because they like the idea of having their metal stored close to their home. For example, an investor in Texas might want to have their metal stored at the Texas Bullion Depository in Leander, Texas. Nearby storage makes it possible for the investor to visit the Depository and pick up their metal in person when it is time to take a distribution after retirement. Depositories commonly use secure delivery services to mail Precious metals so it isn’t necessary to actually visit the Depository in person. Many investors choose to take distributions from their Gold IRA in the form of cash instead of taking personal possession of the metal. In this case the Gold IRA company buys the metal from the investor and then distributes the proceeds of the sale.

Move 401k To Gold
How Can I Transfer My 401k To Gold Without Penalty

How Can I Transfer My 401k To Gold Without Penalty



Never pay extra for proof Coins and limited-edition Coins. It doesn't matter if it is a proof American Eagle Coin, or an old Krugerrand from the scratch and-dent bin - Gold is Gold. The same advice applies to Silver, Platinum, or Palladium. The IRS prohibits Collectible Coins in IRAs but many IRA companies get around this law by selling proof and special edition Coins. Coins with a “certificate of authenticity” are another way that mints and Gold IRA companies get investors to pay more than they should for an ounce of metal. These certificates add zero value to a Coin – the certificate is just a piece of paper – who cares?. Precious metals don’t need certificates of authenticity to prove that they are valuable. Gold, and the other metals, are valuable on their own and that’s why investors choose to store their hard-earned retirement savings in Precious metals. This recommendation applies especially to Gold IRAs, where physical Gold is stored at an IRS-approved repository. Many IRA investors will never see or hold the metal in their Gold IRA. They will protect their savings with a Precious metals IRA while they are working and then take cash distributions after retirement. For these investors it makes no sense to pay a premium for special edition Coins, they will never see the Coins so it doesn’t matter what they look like or whether the Coins have certificates of authenticity.

How To Move "401k" Without Penalty



Shady salespeople get uninformed investors to pay obscene premiums for special edition Coins by claiming that these Coins are more liquid when it comes time to sell. This claim is pure BS – Gold is one of the most liquid markets in the world. Again, one ounce of Gold is worth one ounce of Gold, period. It doesn’t matter what it looks like, whether it comes in a fancy box, or has some piece of paper saying it is authentic. If a salesman or saleswomen pushes special edition Coins they are looking out for themselves and not the investor. The markup on special edition Coins is substantial so the salesperson makes more money by selling them. They use fear as a sales tactic by implying that the investor won’t be able to sell their Coins when the time comes. It is actually more likely that the investor won’t be able to sell their special edition Coin because nobody wants to pay an outrageous premium for what is really just one ounce of Gold. The only time it makes sense to pay a premium for a Coin is if you plan to eventually hold that Coin in your hand and appreciate it as a beautiful piece of art. That means you are planning to take distributions from the IRA in metal and not in cash.

How To Move

Gold Vs 401k



If you don't plan on taking possession of the Precious metals after your retirement, you will never see the Coins, so what they look like doesn’t matter. What does matter is getting the most metal possible for your retirement savings. That means you want to focus on purchasing Bullion Coins and bars instead of the special edition items. Premiums vary from one form of metal to another with Bullion bars and Coins having the lowest premiums and special edition Coins having the highest premium. When you are purchasing the metal to hold in your Precious metals IRA ask the sales representative which products have the lowest premiums – those are the products to purchase with the bulk of your money. It is OK if you want to purchase a few special edition Coins but don’t put all of your savings into these premium products. Right now American Eagle Coins carry very high premiums relative to Coins from non-US mints. Unless you are determined to hold only American Coins, purchase Canadian Maple Leafs, Austrian Philharmonics, or United Kingdom Britannias – again, whichever Coins have the lowest premium. Bullion bars are likely to have lower premiums than Coins so purchase bars first and Coins second.

How To Move 401k To Gold Without Penalty



While a Gold IRA may not be the best way of owning physical Precious metals, it is the only way you can purchase and keep physical Precious metals using your tax-advantaged retirement savings. There really are no alternatives unless you are willing to cash out your Retirement account, pay the early withdrawal penalty and income taxes, and then purchase Precious metals with the money that is left. For most investors the cost of cashing out their tax-advantaged accounts is prohibitive so their money is stuck inside an IRS-approved retirement plan until they reach age 59 ½ when they can start taking distributions without an early withdrawal penalty. That means the investors money – your money – needs to be in some kind of Investment while it sits in the IRS-approved account. You can let the money sit in cash, it doesn’t have to be invested 100% of the time but cash doesn’t appreciate in value over time. With the exception of Precious metals IRA, most Retirement accounts are limited to Stocks, Bonds, and Mutual funds and, unfortunately, all of those Investments are likely to lose significant value during periods of Inflation and Stagflation like we are currently experiencing.

How To Move 401k To Gold Without Penalty