Most people working a day job are highly sentimental about their retirement, and they put all their efforts into making sure the period is as comfortable as their means permits. This is the reason for the various retirement plans in the first place; to create a safety net for people after their productive years. But the old system of investing retirement funds poses a significant danger to that security.
Traditional retirement plans such as the 401Ks and classic Individual Retirement Accounts are tied to the stocks market. As we all know, the financial markets are prone to the behaviour of government policies, and investing in the wrong company could mean the loss of all your retirement savings. Laws were put in place to allow people to own Self Directed IRAs or Precious Metals IRAs to provide more flexibility for retirement investments.
Unlike their traditional counterparts that limit holdings to the stock markets, Precious Metals IRAs offer greater flexibility, allowing investors to diversify their retirement funds into other holdings such as gold and silver which are tangible assets as well as many other assets not allowed in the older retirement plans.
This is what gave birth to rollovers. With a precious metals IRA rollover, investors can transfer funds from a compatible retirement account into their Self Directed IRA to invest in gold, silver, platinum, palladium, as well as many other assets. This strategy is geared towards protecting their retirement funds from the uncertainties of the stocks market.
Bear in mind that the world and the United States in particular experiences catastrophic financial meltdowns almost every ten years, and the aftermath of these crises have always been gloomy for people who had a larger percentage of their investments in the stocks market.
Physical assets such as gold and silver don’t obey the laws of the stocks market, except where you invested in gold-backed stocks, but even these have a separate set of rules and distinct markets apart from the larger money markets. This does not imply that the assets in a Precious Metals IRA are 100% safe. No, but they are more immune to the deleterious effects of inflation and other monetary policy issues that arise during times of economic upheavals.
Historically, gold and other precious metals have been known to retain their value during times of financial crises, and experts believe the value of these precious metals is set to rise, in spite of growing economic instability. If you are thinking of rolling over your current retirement funds into a Precious Metals IRA, these are the steps to follow.
Which Retirement Plans Qualify For A Precious Metals Rollover?
Several traditional retirement accounts are eligible for a precious metals IRA rollover. Such plans include the old 401(K) accounts, 403(B), 457(B), Thrift Savings Plan (TSP), pension plans, annuities, and others. All of these plans can be rolled over or converted tax-free into a Precious Metals IRA such as a Gold IRA.
What Is A Precious Metals IRA Rollover?
A Precious Metals IRA rollover involves the transfer of a part or all your holdings in an old retirement account such as a 401K into a self-directed IRA such as a Gold IRA. If your current employer backs your old retirement account, it may not be possible to do a rollover of the account into a Precious Metals IRA. Be sure to ask your current employer if you can roll over funds from your old retirement account to a Self-directed IRA.
The rollover is tax-free and attracts no penalties, but you have to complete the process within 60 days. You are allowed to roll over the same funds once every 12 months to maintain the tax-deferred status of your retirement holdings.
The alternative to this is known as a Direct Transfer in which you transfer funds from your old retirement account to your new Self-directed IRA. The process is also tax-deferred, and you won’t be penalized since you are only moving your funds from one custodian to another.
How To Do A Precious Metals IRA Rollover
The first step towards a Precious Metals IRA rollover is to open a new Self Directed IRA, i.e., a Gold IRA or Silver IRA. Many financial institutions offer Self Directed IRA services. Do your research and choose the organization that offers quality service at a modest price. One way to know how the company is doing is to check customer reviews and BBB ratings.
Before choosing any IRA company, be sure to ask about the types of assets they support in their precious metals IRA. Different IRA companies offer different levels of flexibility, and your chances of diversifying your investment may be limited to the holdings permitted by your IRA company.
After opening your Self Directed IRA, it’s now time to choose a custodian. A custodian is responsible for managing your precious metals IRA on your behalf. The custodian will be responsible for processing the transfer of funds into the account via a rollover from another retirement account, buying and selling assets, writing reports, and sending regular account statements in regard to your precious metals account.
When choosing a custodian, be sure to check for the history of the company, how they treat customers, years of experience, and most importantly, their fees. You want an IRA custodian that delivers value without losing all your retirement funds as charges.
You also need an IRS-sanctioned depository to keep your precious metals when you eventually start investing with the funds in your precious metals IRA. Be sure to choose a depository with modest fees, high level of security and a proven track record of excellent customer service.
When all of these have been settled, you can now fund your new precious metals IRA with a rollover from your old retirement account.
Ready To Do A Rollover?
When you are ready to roll over your retirement funds into your new gold or silver IRA, head to your custodian and request for a rollover from your old account. You will be provided with forms to complete, stating the amount you wish to transfer to your new account.
The custodian collects the paperwork and takes it from there. You will be informed by your custodian whenever the funds land in your Self Directed IRA. Once you have funds in your precious metals account, it’s now time to start investing in precious metals and other asset types allowed in your IRA account.
Remember that you won’t be doing the buying yourself-your custodian will do that for you and the precious metals that you buy will also be kept at an IRS-approved third-party depository, except where your custodian also operates such facilities.
Before investing in any precious metals, be sure to check out the IRS rules regarding the types of precious metal products that can go into a self-directed IRA. According to the IRS, only 24 Karat gold products can be held in the Self Directed IRA except for the 22 Karats American Eagle Coins. There are many other precious metals from select countries and refiners that can be bought with your Self Directed IRAs.
Precious Metals IRA rollover is an easy way of funding your self-directed IRA. It allows you to diversify your retirement portfolio to take advantage of the stability of precious metals in times of economic and political crises as well as enjoy the rewards of investing in a diverse range of other assets apart from stock markets.
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