Are you tired of missing out on excellent gold buying opportunities in your 401(k) or IRA account? Maybe you have an old 401(k) account lying around collecting dust from your old job. Or maybe you’ve decided to end your employment with your current employer and need to rollover your 401(k).
Instead of no longer contributing to an old retirement account, you realize it’s best to initiate a gold IRA rollover. You want to build your retirement account so you can lead a comfortable life in the future.
But, without initiating a rollover, your old retirement account will remain dormant and unused. Or, maybe you’re just looking to completely cut ties with your old job and this will accomplish your goal.
You might be thinking, “What is a gold IRA rollover?” Most people have heard of the process, but they have no idea how to get underway. And they aren’t completely sure of what a gold IRA rollover means.
I’d like to help dispel the myth for you today by teaching you the process to rollover a 401(k) account and shift into a gold IRA.
Right now, the price of gold is $1781 per ounce. For the moment, it seems to have stabilized in this price range. With so much economic turmoil and uncertainty, it’s bound to gain more value in the near future. You’re better off completing a gold IRA rollover now to begin investing. At this time, the gold price is relatively low and stable.
With that said, let’s take a closer look at the gold IRA rollover process in greater detail.
Gold IRA Rollover Rules and Regulations
Like anything in life, you’ll need to learn the gold IRA rollover rules to succeed without incurring unnecessary penalties. Basically, you’ll rollover your current 401(k) from your previous employer and open a gold IRA in the process.
The first and most important step is to let your 401(k) custodian know about the rollover. And once your 401(k) custodian initiates the process, you’ll have to contend with the 60-day rollover rule. Or you can initiate a direct rollover to avoid this issue altogether.
What Is the 60-Day Gold IRA Rollover Rule?
The IRS places limits on your ability to rollover your account. If you do not follow the guidelines perfectly, you’ll potentially suffer tax consequences and early withdrawal penalties.
In particular, when you begin the rollover process, you will receive a distribution check from your 401(k)’s custodian. You’ll pay taxes and early distribution penalties if you handle the distribution check incorrectly.
During an Indirect Gold IRA Rollover, the custodian must mail a physical check for the distribution. You must deposit this check into your new IRA account within 60 days or suffer unnecessary consequences. Failing to deposit within the 60-day timeframe means incurring penalties and paying your unpaid taxes now.
Do you understand what I’m sharing with you? You absolutely must deposit your check within the 60 days or suffer the consequences.
The Gold IRA Rollover Process: 401(k) to IRA
It’s also critical and necessary to complete this transfer correctly. Otherwise, you’ll face tax consequences and penalties that you’d rather avoid.
After you receive the distribution check, take the following steps to complete the gold IRA rollover process:
- Get into contact with your new gold IRA custodian. Find out the next step to must take to deposit the distribution check. Make sure you get clear and concise instructions and follow them perfectly to successfully complete your deposit.
- Remember about the 60-day rollover deposit rule for indirect rollovers. Failure to deposit your check in a timely manner leads to additional fees and penalties.
- Once your funds are deposited, you’ll now have a fully funded account to invest within. This is exactly what you hoped to achieve, because now you can begin buying gold, silver, platinum and palladium.
- Legally, the IRS allows an individual to initiate a rollover once every 12 months. This rule exists in an effort to preserve tax-deferred status. Attempting more than one rollover per 12 months isn’t possible or legal.
- With your fully funded account, let your IRA custodian know about your favorite investments. Begin making these investments right away to start accumulating wealth within your gold IRA.
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Gold IRA Transfer: A Different Yet Effective Way to Fund an IRA Account
The gold IRA rollover process and the gold IRA transfer process are definitely different. In this case, you aren’t transferring a 401(k) account. You’re actually transferring a Roth IRA or traditional IRA account.
And the best part? You aren’t responsible for handling the money at all, because it transfers from one custodian to the other.
Mainly, your most important job is to initiate the transfer process with your current IRA custodian. Something similar to the following will happen:
- Talk to your existing IRA custodian and let them know about your desire to transfer to a gold IRA account. Fill them in on the important details and they will begin the transfer process.
- The funds are transferred from your traditional or Roth IRA custodian and sent to your new gold IRA custodian.
- The funds are received by the precious metals IRA custodian and then deposited into your new gold IRA account. These funds are used to open the new account.
- Once the process is finished, you can begin investing in gold, platinum, silver, and palladium right away.
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What Retirement Accounts Qualify for a Gold IRA Rollover?
I’ve used a 401(k) account as my main example throughout this article, but other eligible accounts qualify for a rollover. As a matter of fact, there are five specific account types that qualify for a gold IRA rollover.
The eligible accounts are as follows:
- 403b account – this account is typically held by public school employees and employees at nonprofit organizations. You must no longer be employed by your previous employer for this account to qualify for a gold IRA rollover. Or at 59 ½ years old, you’re eligible for in-service distributions, which is considered a partial IRA rollover.
- TSP account – a Thrift Savings Plan account is a retirement account for federal employees. Civil service workers and military personnel tend to have this type of account. You cannot initiate a gold IRA rollover until you’ve been fired or you quit your job and no longer work for your employer. Like many of the other accounts on this list, in-service distributions are allowed at 59 ½ years old.
- 457b account – employees from local and state government agencies tend to acquire 457b accounts for their retirement. Typical professions include sanitation workers, police officers, firefighters, and others. A rollover is only possible when the employee is no longer employed by the government organization. You can end your employment via termination, quitting, or retirement. In some cases, current employees 70 ½ years old may gain permission for a gold IRA rollover.
- IRA account – if you currently have a Roth IRA, traditional IRA, SEP IRA, simple IRA, or self-directed IRA you can initiate a gold IRA transfer. This is the only way to purchase gold to grow your retirement account for the future. Contact your current IRA custodian and let them know about the transfer initiation to begin the process.
- 401(k) account – previously employed 401(k) account holders are eligible to initiate a gold IRA rollover. But it’s only possible if you no longer work for your previous employer. Or you may reach 59 ½ years old and then it’s possible to qualify for an in-service distribution. This is considered a partial 401(k) to IRA rollover.
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Direct IRA Rollover
Believe it or not, it’s possible to have your current account custodian directly send the proceeds of your account to the new custodian. This is the safest method because you aren’t required to intervene in the process. It’s a very simple, direct, and easy to accomplish. You’ll likely avoid incurring IRS related penalties this way.
Indirect IRA Rollover
When you initiate an indirect rollover, your custodian will mail a check of the proceeds directly to you. You must deposit the distribution into your new gold IRA account within 60 days. Failing to accomplish this task younger than 59 ½ years old means paying an early withdrawal fee worth 10%.
Bottom Line
As you can see, there are certain ins and outs of the gold IRA rollover. But they aren’t as complicated as you may have thought. So do not let this process intimidate you at all.
Instead, make an effort to connect with a top-notch gold broker that can help you throughout the entire process. The best way to find a highly qualified gold broker is to read my top 10 review of the best gold companies in business at the moment.
