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Job changes for non-retirement reasons such as when moving to a new employer, into entrepreneurship or for retirement, can potentially complicate your employer-sponsored retirement plan. Of such qualified employer-sponsored plans, the 401k is the most common. So what should you do with it? If you are feeling a little nervous, that is a rational reaction. This process is governed by IRS regulations so it is only natural you would want some certainty that you are doing the right thing.
Typically, you have four options for your 401k when you exit your current employer.
Finance & Investment Tips : 401k & IRA Differences
While each of the four propsoective paths listed in the previous section do have their merits and demerits, there are compelling reasons why rolling over your 401k to an IRA is the way to go.
For many investors, the allure of precious metals–especially gold–is hard to resist. With a 401k, the closest you can come to investing in precious metals is holding mining stocks, precious metal ETFs, precious metal mutual funds and precious metal futures.
The opportunity to invest in the actual physical metal is one of the main reasons why you should consider rolling over your 401k into a precious metal IRA. Precious metal IRAs are self-directed accounts with a precious metal broker/dealer as the trustee. They tie the benefits of gold bullion with the convenience of a modern IRA.
A precious metal IRA has a number of advantages.
Your choice of the precious metal IRA company you are going to be working with is one of the most important you will make when rolling over your 401k. Precious metal IRA companies are not the same.
Do not take a company’s word for it. To improve your odds of making the right choice, compare different companies across a number of factors. That includes length of operation, customer reviews, fees and any insurance they provide.
There is no scarcity of precious metal IRA reviews online as well as lists of the top precious metal IRA companies. You cannot trust everything you read online but it is unlikely that a business is falsifying thousands of reviews. The prevailing sentiment whether positive or negative is probably fairly representative of the actual customer experience.
Depending on what your investment objectives are, I consider Goldco, Augusta Precious Metals and Birch Gold as three of the best choices you have out there. Of the three companies, Goldco is our prime recommendation when you are looking to roll over $25,000 or more.
Goldco is our prime recommendation if you are looking to roll over $25,000 or more. The company recently received an emphatic endorsement from former presidential candidate Dr. Ron Paul.
Goldco has built a reputation for personalizing products to meet customer needs. It is known for professionalism, customer service and a collaborative approach with customers to realize retirement goals. With a new ultra-modern storage facility and a capacity to keep your precious metals separated from those of other investors, Goldco strives to provide an accessible and accountable service.
While the minimum $175 annual fee is higher than many other brokers, you have the benefit of accessing your assets whenever you want to. Goldco will reimburse your storage fees. This reimbursement is shipped to you in the form of like-value silver. Note that this is not part of the IRA and you must pay the storage fees in advance.
The minimum purchase is $25,000. so that could lock out investors looking to roll over a smaller amount.
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For about two decades, Birch Gold Group has been selling precious metals to be placed in an IRA. A leading company in precious metals IRAs, Birch stands out for going out of their way to educate investors on how they can transform their interest in gold, silver, platinum and palladium, into a long-term investment.
So if you are new to precious metals IRAs and need a broker who will hold your hand, Birch will probably be your best option.
There are no fees during the first year on transfers exceeding $50,000. Birch has an annual fee of $75 as well as a $1 billion insurance policy that reimburses the unlikely theft of your investment. The broker has a promotion that offers $10,000 in free precious metals depending on how much gold you purchase.
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With Hall of Fame quarterback Joe Montana as its corporate ambassador, Augusta Precious Metals is one of the more prominent gold IRA companies. It partners with the Royal Canadian Mint to bring purer coins to the American public.
From the start, the broker dedicates a specialist to your account. You enjoy lifetime customer support. One of the key drawbacks with Augusta Precious Metals is that you cannot place an online order.
The broker offers an impressive array of informational material covering effective diversification, inflation protection and the benefits of owning precious metals.
You need to invest a minimum of $5,000 to buy gold or silver from the broker. It costs $50 to establish a gold IRA with August Precious Metals. Annual fees comprise a $100 storage fee and $80 custodian maintenance fee.
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Now, to the most exciting part. The process of rolling over your 401k into an IRA is actually simple and can be completed within a short time frame. Here goes.
Gold in a retirement account must fulfil the requirements set out in Chapter 26, Section 408(m) of the tax code. You can hold gold as slabs or coins in your retirement account as long as it satisfies the requisite parameters for size and purity as defined in 51 US code 5112(a).
That said, whereas you may hold gold in physical bars, these are harder to liquidate when compared to coins. It may therefore be prudent to hold your investment in coins as much as possible. Not all precious metal coins are permitted by the IRS. Approved coins for a gold IRA include American Eagle Gold coin and Canadian Gold Maple Leaf coin.
Many retirement experts recommend that you can have anywhere from 5-20% of your portfolio in precious metals. You may opt to have that entire precious metals allocation in gold, or you could decide to mix it with silver, platinum and palladium.
Looking to diversify your retirement savings? Do you want a retirement plan that is not exposed to the volatility of the stock market or paper currency? Roll over your 401k to a gold IRA.
This guide is a brief introduction into the process of rolling over a 401k account from a former employer into a precious metal IRA. Nevertheless, you must adhere to specific guidelines. It is important that you discuss your intention for physical gold and silver ownership with the plan’s sponsor to explore what options are available to you.
Consult your tax professional to ensure you comply with all relevant tax regulations.
This guide is for informational purposes. No investment advice is being implied or given.
To find out your option for your 401k when you quit your job click this link
Yes you can perform a 401k to gold IRA rollover see this page for more details