A Gold
Typically, both traditional and Roth IRA’s can hold only cash, bonds, and stock.
The Taxpayer Relief Act of 1997 broadened the types of investments allowed in individual retirement accounts to include certain types of precious metals.
These IRA’s are called “self-directed” or “alternative-asset” IRA’s. Not all precious metals are allowed. Usually, they are limited to gold, silver, platinum, and palladium.
Tax law also specifies the purity standards for each metal. For example, the American Gold Eagle coin is an approved gold asset.
A Brief Introduction to the Gold IRA
Investors became more interested in gold IRA’s After the financial crisis in 2008, which brought about a recession.
In October of 2007, the stock market hit its pre-recession high, then by March of 2009, the market lost 50 percent of its value, and investors’ retirement portfolios reflected this significant drop in value.
Gold prices move in the opposite direction of stock prices, so gold IRA’s became a reasonable hedge against inflation.
These IRA’s are useful for portfolio diversification and for anyone who is concerned with economic and world news that might cause another stock market drop.
What is a Gold IRA Rollover?
If you have a retirement plan such as a 401(k) or 403(b) through your employer and you leave to take another job, you can roll the money you have in your current retirement account or IRA over into another IRA.
through your employer and you leave to take another job, you can roll the money you have in your current retirement account or IRA over into another IRA.
The same rules apply if another IRA offers better investment opportunities than the one you have. You must follow certain rules and regulations.
The same is true for a gold IRA, but there are even stricter regulations to follow.
Rollovers can occur under one of three conditions:
- The sponsoring company substantially changes its retirement plan
- The sponsoring company changes the custodian of its retirement plan
- The employee terminates employment with the sponsoring company
How Are Rollovers Done?
The IRS stipulates three ways to complete a rollover:
- Direct Rollover: You can ask your retirement plan administrator to issue a check directly to the retirement plan or IRA to which you wish your money rolled over. Using this method assures that there will be no taxes withheld from your rollover.
- Trustee-to-Trustee Rollover: If you are rolling over your IRA, the trustee of the IRA can facilitate the rollover to the trustee of the other IRA. There are no taxes withheld using this method.
- 60-Day Rollover: A check can be issued directly to you for the amount of your rollover. If you invest it in another IRA or retirement plan within 60 days, no taxes will be withheld.
Some investors choose to roll part of their retirement savings into a gold IRA rather than all their savings.
In this case, a portion of the retirement savings will be subject to the special rules concerning a gold IRA rollover.
How Are Gold IRA Rollovers Different?
Gold IRA’s can either be traditional or Roth IRA’s. The first thing that a potential investor must decide is whether they want to invest in the actual physical gold or in gold company stock, a gold mutual fund, or an exchange-traded gold fund.
If the investor decides to invest in the actual gold, it must be gold coins or bullion that meets the standards of the IRS regarding purity. The gold must be held by a custodian that is IRS-approved and should not be held in any type of home storage.
Rolling over retirement funds to a gold IRA is more complicated and expensive. You have to establish a self-directed IRA which allows you to invest in a wider range of assets.
Then, you need to choose a custodian to create and administer your self-directed account. It is usually a bank, but it can be other types of financial institutions such as credit unions, brokerage firms, or trust companies.
The custodian you choose must have the facilities to store the physical gold for you. The federal and state agencies give these custodians the approval to provide asset custody services.
Gold IRA Custodians to Gold Brokers
You then need a broker to buy the physical gold. The custodian may have relationships with established brokers and can give you referrals.
Choosing a broker is very important. The broker chooses gold that meets the standards of the federal government for inclusion in an IRA.
You want your broker to have, at least, the following characteristics:
- Qualifications: The broker should have all the appropriate licenses, bonds, and insurance to protect your investment.
- Reputation: The broker should have an excellent reputation based on the word of previous clients and organizations like the Better Business Bureau. You might want to look at consumer reviews or number of complaints filed.
- Responsiveness: The broker should be responsive to your needs as an investor. They should be well-versed in the tax law regarding IRA’s and Gold IRAs and be willing to work with you to be sure you are meeting the requirements.
Ways to Invest in Gold
There are more than a few ways to invest in gold. Therefore we will mention the best way first: purchasing gold coins and bullion in an SDIRA.
However, it does not hurt to know the other ways of investing in gold. We will also see why it is best to invest in gold by purchasing physical gold in an IRA.
1) Gold Coins and Bullion in an SDIRA
You can buy physical gold from a variety of gold and precious metals brokers who sell the gold in the form of coins, bars and bullion.
While owning actual gold sounds thrilling, storing it in your home can be a safety issue if anyone learns you have the gold in your possession. A relative or friend may mention to others that you have gold in your home, which can lead to theft.
However, gold IRA companies securely store your gold with their trusted depository for a fee, usually a small flat annual fee.
A Gold IRA allows you to rollover your retirement funds or invest your resources directly into one that holds physical gold bullion or coins.
Look for a dealer offering free shipping and compare offers from multiple brokers to see if you can reduce costs and increase your profits when you sell the gold. You can see them in our List of Top 10 Gold IRA Companies.
2) Buy Gold Exchange Traded Receipts (ETR)
Another way to own physical gold is by investing in Gold ETR’s from the Canadian Gold Reserves Program.
You can trade Gold ETR’s on the Toronto Stock Exchange (TSX) through several U.S. brokerages in Canadian (MNT) and U.S. (MNT.U) dollars.
The gold receipts prove that you own physical gold bullion held at the Royal Canadian Mint. You pay a monthly fee equal to an annual rate of 0.35 percent.
The purity of the gold an ETR represents is guaranteed to be at least 99.9%.
You can redeem your ETR’s for gold bullion or cash once a month, and the minimum redemption is 100,000 ETRs.
However, there’s no need to take possession of the gold with ETR’s. When you’re ready, you can sell your certificates on the Toronto Stock Exchange.
3) Invest in Gold Stocks
When you buy stock in a gold company, you’re buying into a gold mining or processing operation rather than gold itself.
The company makes a profit when it sells extracted gold for a higher value than the cost of the mining operations.
Gold stocks can be a great way to indirectly take advantage of rising gold demand and prices, but you must practice due diligence when selecting gold stocks.
Two things to consider when picking gold stocks are:
- When considering gold stocks, buy into financially stable, quality companies with contracts for future mining projects.
- You can also look into stock sold by companies involved in processing gold, which may have somewhat less potential for volatility.
Gold stocks usually follow gold prices but can regress while gold prices climb when the economy falters.
3) Buy Gold ETF’s
An exchange-traded fund, commonly known as a ETF, is a basket of stocks sold on the stock exchange throughout the day.
A Gold ETF may be backed by physical gold assets or could track the price of gold using futures.
Many Gold ETF’s hold derivatives and options, with gains taxable at the collectibles 28 percent rate.
The ETF is the one gold investment you may not want for the long term as fees eat away at profits, depending on the ETF.
Thoroughly research the gold ETF’s you’re interested in and how much investments they can hold. It is also wise to consider taxes and past performance.
4) Gold Fund Investing
Gold mutual funds may invest in any mixture of physical gold assets, precious metals processing stocks, other precious metals or gems, and domestic and foreign gold mining company stocks.
Determining which gold fund to invest in takes a bit of research so you can choose a fund that meets your financial objectives.
Some gold funds hold almost all physical gold and effectively track gold prices. Some focus on emerging gold markets and can be lucrative over time. Others hold a percentage of investments in diamonds, silver and other precious metals and minerals.
Choose a gold fund with a level of foreign company exposure you’re comfortable with. Make sure to also take a look at the past performance of the mutual fund compared to the overall market.
Buying shares in a gold fund can expose your portfolio to the benefits of gold-investing at a low cost. Look for no-load funds or low-load funds with expense ratios under one percent.
5) Buy Gold ETN’s
An ETN is an exchange-traded note, and this instrument combines some aspects of ETF’s with bond securities.
Gold ETN’s may track a gold index or may move opposite of the value of gold, which is useful for the contrarian investor.
A bank issues Gold ETN’s with a maturity date much like buying non-interest bearing bonds. When the ETN matures, the bank pays the investor back with a profit depending on gold futures.
With great risk comes great reward, and Gold ETN’s can pay a handsome return. However, you also can lose your entire investment.
Invest in Gold Wisely
There are many ways to invest in gold. Some investors are looking for a hedge against the economy. Others think of it as a way of growing their retirement portfolio. Still others consider possibly getting in on a short-term payoff.
Do a few hours of research first irregardless of what gold-investment method you choose. It is best to consult with a financial adviser to ensure your gold investment method compliments your financial goals.
Bottom Line
Rolling over your investments into a Gold IRA is a popular option for people looking to avoid the uncertainty of the stock market.
If you’re not sure about where to start, read our guide on the best Gold IRA companies to help you get started in your decision-making process.
Do you have any questions on why rolling over your retirement to a gold IRA is your best investment option for 2019? Ask below!
Interesting article. There are a lot of different options for investment these days and it’s not always clear what the best options are.
Gold is definitely an interesting option that I will be discussing with my husband and my financial adviser as we are currently looking for good opportunities for investment.
Thank you for bringing this option to my attention and for this good breakdown of how it would work
Hello Jess! I am glad you found my article helpful. I would definitely recommend investing in a Gold IRA if you do decide to invest in gold. Thank you for the visit!
From the beginning of time, gold has always been a good investment choice. Few years ago, I invested in gold by buying a small amount just to confirm the credibility of the program and I found out it credible. I discovered a better investment program but I could not rollover my assets. With Gold IRA, I know I can transfer my assets whenever. This is definitely a good investment program to adopt
Hello Mikay and thank you for sharing your experience with having a Gold IRA! If you have not done so, perhaps you can use our most recommended company, Regal Assets, as they have a 24-hour buyback program in which you can exchange your precious metals bullion for cash within 24 hours. That’s only one of the reasons we found them to be the best Gold IRA custodian. Cheers!
It’s interesting that one can invest in A Gold IRA which is an Individual Retirement Account that allows investors to hold hard, physical assets in their retirement portfolios.
I’ve always seen retirement or pensions as cash in the bank. I’m grateful to be exposed to the fact that, they can also be hard physical assets.
I’m so amazed that one can invest in gold, silver, platinum, and palladium as a form retirement fund.
Hello Peace, I’m glad you learned a lot through my article. Precious metals investing is one of the most convenient ways to invest in physical assets, and owning a Gold IRA is the most convenient way to invest in precious metals. Thank you for visiting!
Thank you for this very informative article! It seems we are getting to the top of this bull market. Almost everyone agrees a market crash is going to happen within the next couple years. This seems like a great move to make for anyone who save some of their retirement account safe. I think for me personally, being young and decades away from retirement, moving some of my current funds into gold ETFs may be a wise decision to hedge against the crash. Thoughts?
Hello Ryan! Although Gold ETF’s are a sound option (view article: Gold ETF’s as a Good Hedge Against Inflation), we still recommend owning physical gold in your IRA as the best option. With Gold ETF’s you do not actually own the physical gold yourself but rather the shares of the ETF, even though the best ETF’s do own physical gold. I hope this answers your question! Thank you for dropping by.
Gold had always been a means of stable investment, whether online or in its solid state. In my opinion the Gold IRA Rollover is a genius idea, and if followed carefully, with the guidance of the right expert, its going to be a huge success. I have decided to once more make a solid investment in gold as I have benefited from such in the past.
Hello Olanike! I’m glad you are interested in rolling over to a Gold IRA. It’s the best way to invest in physical gold. If you are looking for the guidance of the right expert, we recommend Regal Assets directly to you. The are the #1 company in our List of Gold IRA Companies and have a team of experts who can help you with your financial decisions. That’s only one of the reasons they’re the best company, though. I wish you the best of success. Thank you for dropping by!
Thanks for writing this article on why gold ira rollover is the best investment in option in 2019.i must commend you for a job well-done for bring in opportunity for many to cover the dollar to gold investment which is the safest investment for now in the world. This is my first time of hearing that name Gold IRA rollover and all it entails but reading this article I really find it usefulness financially because I have been thinking of a ways to invest in gold for sometimes now and it look like the perfect timing for it
Hello Ajibola! I’m glad you found my article helpful to you. Investing in a gold IRA is the best way to invest in gold because you get to own the physical gold yourself tax-free. Thank you for coming by!
I had never heard of a Gold IRA, this is very interesting and could be a really great alternative to the regular stock market. Is the gold taxed like regular IRA withdrawals? Does it have the same rules as a traditional IRA ie limits on when you can take the money and how much you can input into it? Do you think having a Gold IRA and a Traditional one makes sense, or would you only have a Gold one? I love diversification so this may be a great product to invest in along with my other investments. Thanks so much for the information, I look forward to researching it further.
Hello Beth! Yes, a gold IRA does basically follow the guidelines of traditional IRA’s such as the age limits, but the only difference is that you can invest in hard physical assets such as precious metals, real-estate, and businesses. It’s why we recommend it so much. I am glad my article was helpful to you! I will gladly be of more service if you have any more questions. Thank you for your comment and questions!
I had never heard of a Gold IRA, this is very interesting and could be a really great alternative to the regular stock market. Is the gold taxed like regular IRA withdrawals? Does it have the same rules as a traditional IRA ie limits on when you can take the money and how much you can input into it? Do you think having a Gold IRA and a Traditional one makes sense, or would you only have a Gold one? I love diversification so this may be a great product to invest in along with my other investments. Thanks so much for the information, I look forward to researching it further.
The online space is full of many fake and real investments but the problem is knowing the one that is real and the one that is fake. I have also seen very good investment platform that pays majorly. The problem I always have is trust so if there is any assurance tat this platform will not disappoint, then I will gladly opt in.
Interesting review! Is like I haven’t heard about Gold IRA before, I really know little about the silver IRA. I can say this is like a knowledge added to me. Am yet to retire, but is great to know that Gold IRA is an individual retirement Account that allows investors to hold hard, physical assets in their retirement portfolios and typically, both traditional and Roth IRA’s can hold only cash, bonds, and stock. .
According to my knowledge gotten through this post I love the gold Roth IRA. Being a person that really don’t like exposing my personal intentions to third parties, I don’t like the fact that you must channel your investing decisions through an account custodian, which exposes one to counter party risk in the form of theft or fraud, but Gold IRA Custodians to Gold Brokers system in gold seems similar to silver. Am I right? But I still like the silver as is generally cheaper compared to the gold. Great review, thanks.
Hi; the Gold IRA Rollover Investment seems to be a fantastic investment for those who are nearing their retirement age as well as those who have already reached the age.
My question is: could anyone who is within the forty to forty-five age group benefit from the Gold IRA Rollover investment? I will share your post with my parents and their siblings
DorcasW
Hello!
I think what this article talks about, investing in gold, is definitely a good thing to do because the value of paper money is depreciating. But I think that investing in virtual currency is also a great way to stabilize your income just as physical asset investment works too. An app that I like to use to invest in virtual currency is called “Coinbase”. It is really worth it. You should check it out!
Best,
Joshua
Hey Joshua! We also have a section of our website dedicated to investing in cryptocurreny! I hope you take the time to view some of our posts about investing in cryptocurrency or a cryptocurrency IRA. Cheers!
Wow,this a really interesting one. This is one of the reasons I love the American pension investment options. I have never heard of the Gold IRA,investment in physical assets. These are even better options as there is more possibility of the investment potfolio increasing in value. And the possibility to roll it over is also very good. It should truly be the best investment option for 2019. Are non-USA citizens or residents allowed to invest too??
Hello Vapz! Yes, non-US citizens and members of other nations can all choose to invest in a gold IRA! There are many investors from the Middle East, especialy Dubai who have been interested in investing resources directly into a Gold IRA. Thank you for the question!
I prefer to buy golds and keep in stock. When the price of gold rises, dollar increases and when this happens, gold becomes a very high commodity which I can sell and maximize profits. However, It will interest me to ask this,,, When I invest in gold IRA companies and something happens to the company as a result of maybe fire outbreak, what gaurrantees and assures me that my investment is not lost?
Hello Kennechi, we do not recommend gold stocks as they are paper assets. Owning physical gold is better because the value of the gold is inflation-proof. In an IRA, if anything happens to the gold, the IRA company will make up for the loss as it is insured by the IRA custodian. I hope this answers your question!
Wow! Thanks for this article. This article has helped me to understand the benefits of having a gold IRA and its tax benefits during rollover. It’s also awesome to know that gold is a stronghold against the wind of inflation and can pull up against recession as witnessed in the 2008 recession.
However learning how to invest in Gold through the gold coins and bullions, buying gold ETRs, buying gold ETFs, investing in gold stocks, gold ETRs and investing in gold funds, and knowing the wheres to procure it, is an incredible knowledge for me. Rolling over retirement accounts to a gold IRA and employing the methodologies during rollover to avoid taxes, is a good plus for this article.
Finally, what do you have to say about buying up physical gold and storing it up in a bank vault?
Hello Chidiking88! Buying physical gold and storing them in a vault is exactly what a Gold IRA does – except it goes a step further and keeps the gold tax-free. In a gold IRA, however, the physical gold you own is even safer than if you put them in a bank vault because they are held in top-security vaults held by depositories. I hope this answers your question. Thank you!
A Gold IRA Rollover will be the Best Investment Option. David Yeo has explained it very clearly. The financial crisis of 2008 creates the opportunity to go for A Gold Individual Retirement Account. It minimizes the uncertainty of value of money but necessity is to invest it wisely.
David has also helped to consult with the specialist and provided the reference guide on the best gold IRA companies for those who has no perfect knowledge about it.
Thanks David for this informative article.
Amod
Hello Amod and thank you for the compliments!
I never knew there were precious metal brokers who sell gold coins, bars, and bullion! My husband and I have been thinking of different ways to diversify our investments and have been considering investing in precious metals. We aren’t as familiar with how a gold IRA would function, but hopefully we can find a good broker in our local area who can help us navigate these types of investments if we go forward with it. Thanks for the info!
Hello Shayla and I am glad that you were able to learn the most helpful lesson from my article! You can see my article here for more information about how a gold IRA functions (it’s basically the same as a traditional IRA with the option to invest in precious metals). You can find the best gold IRA companies in our List of Top 10 Gold IRA Companies. Finding a local dealer to store your gold may be an option but you may find that much more costly and less secure than working with the best gold IRA custodian, Regal Assets. They pay for all your first year’s fees as well as having the lowest flat fee in the industry which you will only pay from the second year and forward. They also use Brinks Depository to store the physical gold at a depository location of your choosing. Thank you for dropping by!