If you’re at least 59 and a half years old — or if you’re at least 55 and no longer work for the employer that provided your 401k plan — then transferring your 401k balance to a Gold IRA shouldn’t be a problem. With an indirect rollover, you have 60 days from the date you receive the money to transfer the money to your custodian bank or Gold IRA company. The money becomes a taxable payout if you don’t complete the transfer within 60 days. If you are 59.5 years of age or younger, there is also a 10% upfront withdrawal fee.
If you already have a 401 (k) plan, you must first determine whether it is eligible for an “in-service rollover.”. If so, this may allow you to transfer some of the funds from your current 401 (k) employer into a self-governing IRA. If you ever part ways with the employer that provided your 401 (k), you also have the option to convert your savings into an IRA. If you have an eligible amount of $401,000 and are ready to make a $401 thousand transfer to precious metals, you have two options.
You can either rollover or transfer. To use the funds in your active 401 (k) account for a penalty-free purchase of physical gold, you would need to change employers, making the currently active 401 (k) eligible for a Gold IRA rollover. Some also invest in gold because they believe that there may come a day when paper money and other investments lose their value due to a natural or geopolitical disaster, leaving gold one of the remaining valuable assets. While you can invest in precious metals funds, gold and silver mining stocks, and other similar paper products, the 401 (k) standard plans don’t include an option to invest in physical gold or silver.
If you’re looking for a new destination for the funds in your 401 (k) and you’re looking for something that doesn’t exactly follow the stock market or the economy, then an IRA rollover of 401 (k) on gold could be a good option. Gold is gold, whether it’s an American Eagle coin in proof or a broken Krugerrand from the trash can with scratches and dents. A gold IRA isn’t the ideal way to own physical precious metals, but it’s the only way to buy and hold those metals with a tax-deferred retirement plan. Since it’s illegal for you to keep the gold yourself, you need a custodian that stores the gold you buy through your IRA.
Some gold IRA companies will encourage you to buy these overpriced coins by telling you that they are in greater demand from investors when it’s time to sell them. Make sure you do your research and find a company that has a strong track record of gold IRAS. Once you’ve opened your Gold IRA, you can contact the company that manages your 401 (k) account to begin the rollover process. Augusta Precious Metals has more educational resources on its website than any other Gold IRA company.
If your new employer’s plan charges high fees or only offers a small selection of expensive mutual funds, you can opt for a 401 (k) rollover to an individual retirement account (IRA) instead. If you like your current plan and it’s working well, there’s no reason to roll over. If you decide to extend your retirement savings, it might make sense to choose an IRA over another 401 (k). If your 401 (k) plan doesn’t include a Roth 401 (k) option, you could opt to convert your retirement savings to a Roth IRA.
You can buy gold coins and gold bars, as well as other precious metals, in a self-managed IRA or 401 (k) set up with an escrow company.