Buying gold for retirement is a daunting process for many people. Oftentimes you are faced with the prospect of creating a gold IRA account for the first time. Most people must decide whether to open a brand-new precious metals IRA or initiate a gold IRA rollover. Another option would be a 401k to IRA rollover or transfer.

Regardless of your circumstance, it’s a lot to think about and digest. You certainly wouldn’t want to make the wrong choice, right?

To help guide you on your path, we’ll share information about gold IRA rollover and transfer options below. This will help you make an informed decision about how to proceed if you already have a retirement account. Sound good? Then let’s get started.

Gold IRA Rollover vs. Transfer: The Differences

Believe it or not, many investors confuse the fact that a transfer and a rollover are not the same thing. In fact, many don’t realize that they’re separate options with distinct reasons for choosing one over the other.

While similar in nature, there are definite differences. We’d like to help clear up the confusion today. So please be patient with us for a moment.

The Definition of a Transfer

Your first option as an investor is to initiate a transfer. In this situation, you already have an existing retirement plan but intend to change custodians. So, you’re basically going to transfer your account from one custodian to another.

Do you follow so far? Good.

In this scenario, there are two potential reasons to change IRA custodians. They include:

  • First, they might not offer gold IRA investing as one of their options. 
  • Or second, you just aren’t happy with them for one reason or another. 

Maybe you don’t like their customer service. They aren’t very helpful when you call and ask for assistance on the phone. And it takes too long for them to get back to you.

Maybe you’ve learned something negative about them. You could have stumbled upon a slew of negative reviews online. And now that your eyes are open, it’s time to make a change.

Or maybe you’ve discovered a better custodian with much cheaper stockpiling and IRA fees. You’re investing in a gold IRA to build your nest egg. You aren’t trying to get taken advantage of by some rich precious metals retailer, right? So, saving money on these fees is important to you, as it should be.

Whatever the reasons, you’ve decided it’s time to move on to greener pastures.

When a transfer takes place directly, your existing custodian will release the funds of your distribution check directly to your new custodian. These funds aren’t made out to you. Instead, it’s a direct transfer without your personal involvement after you’ve initiated the transfer.

The Gold IRA Transfer Process in Plain English

Are you wondering what happens at this point? It’s a great question.

Simply put, your current traditional IRA or Roth IRA custodian will make out a check. But as we’ve mentioned above, this distribution check isn’t made out to you. On the contrary, the custodian makes out the check to your trustee if you have one. Or he or she will make the check out to your new precious metals IRA custodian.

Pretty simple, right? And the best part is you can initiate a transfer as many times as you desire. This isn’t a one time and done scenario. 

In fact, you can even keep your existing traditional IRA or Roth IRA if you’re happy with it. Just transfer money to your gold IRA whenever you deem fit. That’s the beauty of unlimited transfers. You can make them as often as you want with zero repercussions.

So, to reiterate:

  • You request a distribution check funds transfer with your custodian.
  • Your custodian transfers the funds to your gold IRA custodian.
  • Your precious metals custodian will deposit the funds into your new or existing account.
  • You can now use these funds to invest in precious metals.

The Rules of a Gold IRA Rollover

Next, we have the gold IRA rollover. This alternative is clearly different than making a transfer as you’re about to find out.

In this situation, the retirement investor will receive a distribution check directly from their existing custodian. Instead of reinvesting it in your current account, you’ve decided to “roll it over” into a new self-directed gold IRA. But there are rules that need to be followed to make this investment properly.

The 60-Day Gold IRA Rollover Rule

Believe it or not, you cannot receive a distribution check from your current custodian and roll it over whenever you want. It has to happen within a certain timeframe. And you’ve undoubted concluded that the cutoff time is 60 days.

Remember, in this case you’re in charge. You have to physically take action. You’re the one receiving the check, so you have to initiate the rollover with your precious metals IRA custodian. Not your traditional IRA, Roth IRA or 401k custodian.

It’s not mind-numbingly difficult, so don’t worry if this is new to you.

The Benefits of a Gold IRA Rollover

You’ve decided that you’d like to reinvest your distribution in a gold IRA account. Some of your reasons include:

  • You like the growth potential of precious metals – gold in particular. This investment thrives in a struggling economy. There are glimmers showing that the US economy might not be as stable as they want us to believe.
  • You appreciate the tax advantages provided by a precious metals IRA. In many cases, depending on your tax bracket, you can claim your contributions as tax deductible.
  • You want greater control over your investments. Your 401k from your job and other options are managed entirely by someone else. This investment puts you in the driver’s seat.
  • You want to diversify your retirement portfolio. Until now, you’ve had no exposure to precious metals retirement investing. And you’ve finally decided to do something about it. This added diversification will protect your portfolio from inflation and a fading US economy.
  • You want added insurance for your retirement accounts. We don’t literally mean insurance. We just mean that physical gold IRA investing will insure your future. Gold and silver have been accepted currencies for tens of thousands of years. If the worst were to happen and the US dollar totally collapses, you will be protected. You will own physical gold and silver, which can be used as currency during this scary transitional time.

The Gold IRA Rollover Process in Plain English

To begin with, your current retirement account custodian is going to send you a distribution check. With your distribution check in hand, you can take the following steps:

  • Take the appropriate steps to deposit your distribution check into your precious metals account.
  • Remember, you only have 60 days after receiving the distribution check to initiate the “rollover” process.
  • Your gold IRA account custodian will use the funds to create your new precious metals retirement investing account.
  • If you fail to deposit the distribution check within the 60 day timeframe, you become liable for penalties and taxes on the withdrawn money.
  • In an effort to preserve tax-deferred status, it’s only possible to roll over the same money one time in a 12 month period.

Special Note: 401(k) to Gold IRA Rollover Rules

It is important to know, however, that a 401(k) to precious metals IRA rollover is a little more tricky than with a Roth or a Traditional IRA. This is because the eligibility of the rollover depends on whether or not your 401(k) is with your previous employer or current employer.

Remember, if you have a 401(k) with a previous employer, then you automatically qualify to rollover that plan to a precious metals IRA. However, the rollover is ineligible if the 401(k) is with your current employer unless you are over 59 years old.

Check with your current employer to see if your 401(k) can be rolled over to a precious metals IRA.

Gold IRA Transfer vs. Rollover: What’s the Best Option?

The best option obviously depends on you and your situation. If you tend to dillydally or you’re forgetful, it’s probably best to initiate a transfer. By approaching investing this way, you’ll put the onus on your custodian. This will relieve the responsibility of investing within the 60 day timeframe and take it off of your shoulders.

On the other hand, there’s absolutely nothing wrong with a gold IRA rollover. If you’re responsible enough to handle this task on your own, you should go for it. Just remember about the 60 day timeframe. You do not want to end up paying early withdrawal penalties and taxes prematurely.

The Best Way to Begin a Precious Metals IRA Transfer or Rollover Process

As a valued reader, we’d like to encourage you peruse through a few more reading options from our website. They include the following:

  1. First, to learn more about why investing in a gold IRA is the best option among all the gold investment options, visit our page Best Gold IRA Options.
  2. Second, feel free to take a look at our page titled Retirement Plans. On this page, you can learn detailed and specific information about your retirement options. It’s a great page to review if you’re just getting started with gold IRA investing. Please visit this page now.
  3. Third, we’d like to direct your attention to another page titled Self-Directed IRA and Gold. On this page you’ll learn much more about the benefits of investing in a precious metals IRA. We briefly touched on this topic today, but you’ll learn even more on this page.
  4. Finally, we’d like to mention another great resource about the Best Gold IRA Companies. On this page, you’ll learn about different gold IRA companies. And you’ll discover more about our favorite recommendation, Goldco, and how they stack up against the competition.

You may not know this, but we only recommend one precious metals IRA custodian for a wide variety of reasons. Our favorite company is named Goldco.

Before you go, please consider learning as much about gold IRA investing as you can. Through our website, you’ll learn a plethora of valuable information about precious metals IRA investing. If you go to our List of Top 10 Gold IRA Companies you can also gain access to the Goldco free gold IRA investor’s kit. Go there now without any further delay.