Opening a gold IRA account doesn’t need to be a difficult process. Many investors falsely believe that this process is time-consuming and expensive. It could be if you choose the wrong broker. But it doesn’t have to be as long as you connect with one of the top gold IRA companies in business today.
You undoubtedly have many questions about opening a gold IRA. We have the answers that you seek. Please stick around to discover everything you’ll ever need to know before opening a precious metals IRA account.
Why Should I Add Gold to My Retirement Portfolio?
Adding gold to your retirement portfolio is paramount at this point. The US economy is in serious trouble. Unemployment levels dwarf those during the Great Recession. The Federal Reserve is printing money left and right to stave off the next credit and housing crisis. And too many small businesses will close permanently without outside help.
Besides the obvious reasons mentioned above, other benefits of adding gold to your retirement portfolio include:
- Gold historically holds onto its value and increases in value over time: check the price of Gold today (XAU/USD).
- Gold is an excellent hedge against inflation
- Gold is more valuable because the US dollar is experiencing major weakness
- Gold provides inflation protection and additional purchasing power
- Gold is the right currency to hold during times of geopolitical uncertainty
- Gold is more valuable because of supply constraints
- Gold is also more valuable because of increasing demand
- Gold is an outstanding investment for portfolio diversification
Can I Purchase Gold and Other Precious Metals for My Existing 401(k) or IRA Account?
It all depends on how your account was set up. But nine times out of 10, you likely have a conventional 401(k) or IRA account without precious metals eligibility. In this case, you’ll need to open a self-directed IRA account with precious metals eligibility. This new plan will empower you to make your own investment decisions. You’ll no longer have little or no say in the choice of investments being made on your behalf.
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What Is Different Between My Current 401(k) or IRA Compared to a Self-Directed Version?
The good thing is you’ll receive the same tax benefits of your conventional retirement plan with your self-directed plan. These benefits are often the biggest reason for investing in a gold IRA in the first place. You can earn tax-free or tax-deferred gains in this retirement account. Compounded over time, these additional gains can turn into a healthy retirement nest egg for you and your loved ones.
On the other hand, conventional IRA and 401(k) accounts do not permit diversification the same as a self-directed IRA. With a conventional IRA plan, you aren’t allowed to purchase precious metals including silver, gold, palladium, or platinum as part of the retirement plan. Why? They aren’t equipped to handle the special circumstances accompanying these investments like custodial responsibilities, insurance, and storage.
Can I Perform a Rollover or Transfer to Open a Gold IRA Account?
You’re in good company if you choose to open your self-directed IRA account this way. Most precious metals IRA accounts begin with a rollover or transfer. According to the current rules, rollovers and transfers are allowed from qualified plans that include:
- 401(k)
- 401(a)
- 403(b)
- 457
- Annuities
- Thrift savings plans
Will I Need a Trustee to Manage My Self-Directed IRA Account?
Yes, a trustee is necessary to manage your precious metals IRA account. But don’t worry about finding one to meet your needs. The gold company you choose will have a working relationship with valuable trustees. They will appoint a trustee to manage your retirement plan on your behalf.
As mentioned, the accountholder makes all the decisions for a self-directed IRA account. But your trustee is needed to execute your decisions on your behalf. They provide the necessary reporting and administrative services on your behalf. They also work with gold brokers, insurance companies, and storage facilities to ensure you meet all IRS regulations and requirements.
What Happens during a Gold IRA Rollover?
During this process, a few necessary steps will take place. They include the following:
- You tell your 401(k) custodian about the rollover. They will send you a distribution check with the funds from your previous account.
- Send the distribution check to the new custodian of your gold IRA. Upon receiving your check, she or he will use it to fund your new account.
- You can only possess your distribution check for 60 days during the grace period. If you don’t deposit your check within the grace period, your inaction will lead to penalties and early withdrawal taxes.
- As an account holder, you can initiate a rollover once every 12 months.
What Happens during a Gold IRA Transfer?
As you complete the transfer process, you must take certain steps to fund your new account. Those steps include:
- Contact your current custodian and tell them about the Gold IRA transfer. Once your custodian is notified, they will start the transfer process on their end. You will not receive a check with a transfer. The funds are transferred directly to your new gold IRA custodian.
- This funding method doesn’t suffer from any restrictions or limitations. The rollover process can only take place once every 12 months. The transfer process can take place as many times each year as you prefer.
- Your current custodian will cut a distribution check and send it directly to your new custodian or trustee. They will take this check and use it to fund your new gold IRA account.
Bottom Line
At this stage of the game, you should trust your instincts. You see the writing on the wall and realize it’s time to diversify your portfolio. Connecting with the top gold IRA companies will make it simple to open and fund your precious metals IRA. And before long you’ll be on your way to a diversified portfolio filled with valuable IRS approved precious metals investments.
Take a moment to thoroughly reread through everything we’ve shared above. It explains everything you need to know before opening an account with a gold IRA company. This invaluable information will fully prepare you for the investment of a lifetime.
