Rolling over your 401k retirement account into a precious metals IRA may be one way to improve your investment portfolio. The performance of most 401k plans is usually heavily dependent on stock market performance, as investments are typically limited to mutual funds. With the stock market down significantly and with continuing economic uncertainty likely, gold and silver may be a better investment. Precious metals have historically been strong investments during periods of high inflation.
Holding investments in alternative assets such as gold, silver, or Bitcoin offers an easy means of diversifying your overall investment portfolio, thereby reducing risk.
Benefits of a Gold IRA
A Gold or Silver IRA is a self-directed IRA that offers investors many potential benefits:
- Protection against inflation or other currency devaluation
- Tax benefits accorded to IRAs
- Investment portfolio hedge/diversification
- Having investment assets that are less susceptible to government seizure
- Having the option to invest through a Roth IRA
These benefits are the reason that many financial advisors suggest to their clients the idea of investing in gold and silver bullion or coins as part of their retirement investment portfolio by setting up a Gold IRA.
How to Rollover Your 401k into a Gold IRA
Rolling over your 401k into a precious metals IRA is a simple process, requiring just a few easy steps. The Internal Revenue Service (IRS) ruled that governing tax-advantaged accounts such as an IRA does require that you take care to handle the rollover process properly. Fortunately, there are dozens of Gold IRA companies that can guide you through the steps.
There are two types of 401k to Gold or Silver IRA rollovers. A direct rollover is the easiest method – you just instruct the custodian of your 401k plan to transfer funds to the custodian of your newly established Gold IRA account. With an indirect rollover, your 401k custodian disburses your 401k funds to you, and then you deposit the funds into your Gold IRA.
If you opt for the indirect rollover path, it’s important to keep in mind that – to avoid tax penalties – you must deposit your 401k funds into your Gold IRA within 60 days of the withdrawal from your 401k account.
Step 1 – Check Your Rollover Eligibility
You can always roll over funds from a 401k when they’re disbursed to you after leaving an employer. However, while you’re still working for the employer there may be some restrictions on transferring funds. Check with your plan administrator about eligibility and the proper process for initiating a rollover.
Step 2 – Open a Gold IRA
Although you can set up a Gold IRA on your own, it’s advisable to do so through a company that specializes in offering precious metals IRAs. This is because there are strict IRS rules governing Gold IRAs:
- Requirement for a custodian trustee to manage the account for you
- Restrictions on the types of gold or silver coins or bullion that can be held in the account
- Specific storage facility requirements
Therefore, step 2 is best accomplished by contacting a Gold IRA company to establish a Gold IRA account.
Step 3 – Execute the Rollover
The next step, once you have a Gold IRA established, is to execute the transfer of funds from your 401k account to your Gold IRA – using either the direct or indirect rollover method.
Step 4 – Purchase Precious Metals for Your Account
The final step is buying gold and/or silver bullion or coins for your Gold IRA. Your chosen Gold IRA company can provide you with a list of IRS-approved gold coins or bullion bars.
Best Gold IRA Companies
The companies that offer Gold IRA services differ in cost and also in the number of services that they offer directly. The following three of the most widely-used Gold IRA firms:
#1 Regal Assets Best Overall Gold IRA Provider
Regal Assets provides comprehensive precious metals IRA services, including custodian trustees, approved Gold IRA coins and bullion for purchase, and IRS-approved storage. (They also don’t charge anything for rollovers.)
#2 JM Bullion – Fast-growing US Precious Metals Dealer
JM Bullion is principally a precious metals retailer, but can assist you in setting up a Gold IRA and connect you with Gold IRA trustee and storage firms. It offers a very wide selection of precious metals bullion and coins.
#3 Kitco – Best for Market News
Kitco’s website is widely respected as a source for precious metals market news and analysis. Kitco offers gold and silver bullion and coins for sale but, like JM Bullion, doesn’t directly handle setting up custodian trustee or IRS-approved storage services.
Extended Summary Table: Top 3 Precious Metal IRA companies
Rollover Your 401k to a Precious Metals IRA – Summary
Rolling over funds from your 401k into a precious metals IRA is a fairly simple process. You can get started by contacting a Gold IRA company such as Regal Assets, which provides complete precious metals IRA services.
Learn more about IRAs (including Silver IRAs, Crypto IRAs, and Bitcoin IRAs) from Regal Assets. Find out if a Gold IRA is right for your investment strategy on the official Regal Assets website.
Click here for your FREE investment kit. For more info call Regal Assets at 1-877-962-1133.
Written By: J.B. Maverick – An active investor who has written hundreds of articles, blogs, and eBooks on personal finance and investing for dozens of different investor information websites, including Investopedia.com, and acted as an advisor and editor for the Financial Educators Council.