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There are many benefits of opening a Gold IRA—from diversification, hedging against inflation, investing in a rare and highly liquid precious metal, and more. If you have decided that now is the time to get your current retirement account out of the volatile stock market, you might have some questions about exactly how the Gold IRA transfer process works.
While the idea of transferring funds from one account to another and adding precious metals to your retirement account may seem complicated, the process really isn't too bad—especially with the right precious metals provider helping you out. Read on to learn more about exactly what you'll need to do to transfer an existing retirement account to a new Gold IRA.
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What Is a Gold IRA?
Gold IRAs are a specific type of Self-Directed IRA that makes it possible to hold gold coins and bars in a retirement account. There are many benefits of dedicating a portion of your portfolio to precious metals, which we'll explore in greater detail below.
Gold IRA holders can add up to $6,000 in gold coins and bars to their IRA account each year (or $7,000 each year if they are over the age of 50). This is the same contribution limit that also applies to standard IRAs where stocks or bonds are held.
In addition to adding gold coins or bars to your IRA account, you can also add silver, platinum, or palladium coins and bars.
What Is a Gold IRA Transfer?
A Gold IRA transfer is a relatively simple process that allows you to transfer the funds from your current retirement account into a new Gold IRA. Once the funds are transferred, you will be able to use the money to buy approved gold coins and bars, or other approved precious metals, if you desire.
To complete a Gold IRA transfer, you'll need to reach out to a precious metals provider. They can help you find an IRA custodian who can help you initiate the transfer of funds from your old account to your new account. We'll take a more in-depth look at the steps for completing a Gold IRA transfer in just a few moments.
Why Transfer Your Retirement Account to a Gold IRA?
If you've already started thinking about a Gold IRA transfer, you probably already have a big list of reasons why you want to invest in gold. Let's take a look at all the different benefits of transferring an existing retirement account into a Gold IRA and holding physical precious metals in your account.
Gold IRA Transfer vs Rollover
The terms Gold IRA transfer and Gold IRA rollover may be used interchangeably, but they actually refer to two different things.
With a Gold IRA Rollover, the funds from your current retirement account are sent to you. You have 60 days to reinvest them into your new IRA account, or you will face penalties. There are other conditions set for Gold IRA rollovers that make them a less than ideal option. It can place too much pressure on you to get the new account set up and the funds deposited that, if something goes wrong or there is any holdup, you'd be left to face hefty penalties. Additionally, if you hold the funds for over 60 days, the funds will be taxed in the same way your regular income is taxed, which could increase the amount you owe at tax time by quite a bit.
Fortunately, there is a much better alternative that will still get you the same end result of holding precious metals in your retirement account. With a Gold IRA transfer, you don't have to worry about the threat of penalties for holding the funds from your IRA in your possession for over 60 days.
IRA transfers pass the funds for the accounts between two different IRA custodians. The money will never be in your possession, alleviating you of the responsibility of getting it sent and reinvested quickly.
What Accounts are Eligible for a Transfer?
Multiple types of retirement accounts can qualify for a Gold IRA transfer. These include:
Employer-Sponsored 401(k) Transfers
If you have a 401(k) that was sponsored by your employer, transferring it to a Gold IRA may or may not be possible. 401(k) transfers must pass some different regulations than standard IRA transfers.
For 401(k)s that were sponsored by a former employer, the process of transferring the account to a Gold IRA shouldn't be too complicated. You can follow the steps outlined below to work with a precious metals provider and an IRA custodian company that handles Precious Metals IRAs to get the transfer all set up.
However, if your 401(k) is sponsored by your current employer, you'll have to do a bit of research to determine whether it is eligible for a transfer. With some 401(k) plans, gold is not an allowable investment option for current employees. If you can't find written information about your plan rules, reach out to someone in charge of 401(k)s at your workplace.
How to Complete a Gold IRA Transfer
The exact steps you'll need to follow may vary depending on the precious metals provider and IRA custodian that you choose to work with, but below we'll share a general overview of what you need to do to transfer an existing retirement account to a Gold IRA.
Once you've determined that your account is eligible for a transfer, as explained above, use the guide below to help you understand the next steps.
❑ Choose a Precious Metals Provider
First, and probably most important, you need to choose the right precious metals provider to work with. There are dozens, if not more, precious metals providers out there, and it can feel overwhelming to decide which company is right for you.
To help narrow down your options, check reviews from past customers to learn about their experience working with the company. You can also look for ratings from review organizations, such as the Better Business Bureau or Business Consumer Alliance.
You can also narrow down your options by looking at the precious metals selection each provider offers. If there are any specific coins or bars that you'd like to purchase, you can confirm that they are available from the different providers.
❑ Select an IRA Custodian
You will also need to work with an IRA custodian company to initiate a transfer to set up your new Gold IRA. The precious metals provider you choose may have a list of preferred custodians, or they may be able to point you in the right direction to find a company to work with. You can also do your own research and choose your own preferred IRA custodian company you'd like to work with.
❑ Open Your New IRA Account
Next, you'll need to complete the paperwork that is required by your precious metals provider to open your new account. Many providers keep this step as simple as possible and are available to answer any questions you may have or help you complete the necessary documents.
❑ Initiate the Transfer Process and Fund Your IRA
After your new IRA account has been set up, you will need to work with the IRA custodian to initiate the transfer of the funds from your existing retirement account into your new Gold IRA. Again, this process should be relatively straightforward with the assistance of the IRA custodian and your precious metals provider.
❑ Select and Purchase Gold Bullion for Your Account
Once the money from your old retirement account has been transferred to your new account, you can choose which precious metals you'd like to invest in. If you are unsure which metals are best for your financial position and future goals, talk with the representative from the precious metals company and ask for some suggestions.
Not all gold coins and bars are allowed to be held in an IRA. The IRS developed regulations related to the minimum purity levels of gold, silver, platinum, and palladium coins and bars in order for them to be held in an IRA.
Gold coins or bars must have a minimum purity level of 99.5% (with the Gold American Eagle Coin being an exception to this rule). Silver coins or bars must be at least 99.9% pure, and platinum and palladium coins and bars must be at least 99.95% pure.
Even with these regulations, there are still many coins and bars that qualify to be held in your IRA. After you've completed the transfer process and are ready to select the precious metals you'd like to hold in your account, below are some of the different gold, silver, platinum, and palladium coins and bars that you could decide to add.
☐ Gold Coins
☐ Gold Bars
☐ Silver Coins
☐ Silver Bars
☐ Platinum Coins
☐ Platinum Bars
☐ Palladium Coins
☐ Palladium Bars
Final Thoughts: Gold IRA Transfers
A Gold IRA transfer can help you add precious metals to your retirement account and prepare you for future financial security. The Gold IRA process is not to complicated, and if you choose a trusted precious metals provider, they can help you along each step of the way and make it even easier. Do you think a Gold IRA transfer is right for you? Are you ready to begin diversifying your portfolio now?
Father, Husband, Investor, Entrepreneur.