As the future of traditional IRAs becomes shakier every day, more consumers are finding themselves drawn to the advantages of a Gold IRA Rollover. This investment option often involves a self-directed approach to retirement savings, and it always includes greater diversity and financial security. No matter what type of IRA you are currently holding, you can switch some or all of your accrued funds to gold investments in any of several forms. While this may sound complicated at first, it’s actually simple once you understand the process and determine that you are ready to make the move to more solid financial ground. Here’s how to do a gold IRA rollover.
If you decide to pursue an IRA gold rollover, you may need to switch to a self-directed IRA. This will open your investment options significantly, giving you greater stability and more control over your assets. In case of unexpected market changes, a self-directed IRA will let you direct the performance of your investments without relying on management practices that may or may not serve you well in the end.
A self-directed IRA carries the same set of limitations associated with other IRAs concerning withdrawals and annual deposit limits. Like other IRAs, self-directed IRAs are a long-term investment for forward-thinking investors. The major object of interest here is the ability to easily roll over your IRA assets to gold investments. While self-directed IRAs allow for investments in collectible items, stocks and insurance, the potential for gold IRA investment means that, with guidance from a professional or on your own, you can turn your assets into solid gold or a number of other options in the gold market.
How Rollovers Differ from Transfers
With traditional IRAs, you can choose between investing your existing assets in gold through the use of transfers or rollovers. With transfers, you rely on the custodian to transfer management of your accounts to a new custodian who will invest your funds according to your financial goals. This way, there are no concerns relating to the 60-day government deadline that you will be faced with when you choose a rollover. If you would prefer to have total control over where and how your funds are invested in gold rather than entrusting these options to a custodian, a rollover may be more to your liking.
If you choose to do a rollover, you effectively remove the cash from your existing IRA by having your custodian send you a check for the amount of your funds. Per government guidelines, you then have 60 days to invest those funds into another IRA that meets their requirements. Many investors find that the freedom inherent in a rollover makes it a safer option compared to transfers, but it is essential to heed the 60-day deadline to avoid facing significant taxes and penalties from the government.
Choosing Your Gold Investment
You have a number of purchasing options when you create a gold IRA account, including physical gold, ETFs and gold certificates. Each choice carries certain advantages and drawbacks. If you choose physical gold, such as gold bullion bars or coins, government restrictions mandate that the gold stays in its safekeeping at a repository until you retire. When that time comes, the physical gold will be shipped to you, and you will be tasked with finding a secure location to store it for the long term. While you may be tempted to keep the gold in your home, many consumers prefer to store it in a safe deposit box at a bank or credit union for more security. If you choose to keep at least some of the gold at home, make sure you have a solid and discrete home safe. You can find some good home safe reviews here.
Gold certificates, another option, signify your ownership of gold that remains in the physical possession of a company. If you opt for gold certificates, the government will hold onto them until you reach retirement age. As with physical gold, certificates will be shipped to you, and you will have the option of keeping them on hand or in a safe deposit box or other location.
The third option, ETFs, are exchange-traded funds and are actually stock purchases in the gold market. It’s important to note that not all IRA custodians allow ETFs. Traded on the stock exchange, ETFs can be bought and sold over the years according to changes in the mining market and economy. While these can be lucrative, they also present the higher level of risk that is normally associated with stocks. If you want to be able to offload your investment quickly if necessary, ETFs may be ideal for you.
Preparing to Invest
Whether you choose a self-directed gold IRA account or one handled by a custodian, you should spend time deciding who to work with on your investment. If you go the self-directed route, you can approach the investment process with more information on your side by consulting with an experienced broker. This professional can tell you all about gold purity ratings, mints and forms of bullion or coins that support your financial goals and are accepted in the IRA portfolio of your choice.
If you prefer to have your gold IRA investment managed by a custodian, be sure to evaluate available custodians in terms of their experience, security and business practices. This will ensure that your savings are secure and that you won’t have to worry about the 60-day IRA reinvestment deadline being unmet because of a slow-moving custodian. Finally, you will want to make sure that the custodian you choose is one with whom you feel comfortable because the IRS will penalize you on your funds transfer if you do not wait at least 12 months before switching to a new custodian.
After choosing a custodian, be sure to handle all paperwork and obtain contacts before your existing assets are transferred to gold investments. This is another safeguard against violating the 60-day reinvestment deadline. If you ask about potential fees associated with making this investment, you will be prepared when the custodian handles this or gives you a check to make the investment on your own.
If you’ve chosen to invest in physical gold, you may be faced with a number of options depending on your custodian. With most gold IRA companies, you will be able to choose your own gold dealership. Research carefully and find a reputable online or offline dealer that offers the form of gold that you want for prices that maximize your investment.
A gold-backed IRA is a more stable alternative to traditional, cash-based IRAs. At every step in the gold rollover process, you have access to several options that enable you to personalize your investment and more easily meet your long-term financial goals. Whether you make gold part of your portfolio or move exclusively to gold, you will find that gold retains its value, and often grows in value significantly, to ensure that your wealth is there for you when you’re ready to retire.
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