Disclosure: This article contains references to products from our partners. We may receive compensation if you apply or shop through links in our content. This compensation is how we fund our in-depth research. (read more)
Our readers frequently ask, “Can I rollover a governmental 457(b) Retirement Plan to a gold IRA Retirement Plan and enjoy tax savings?” If the government provides your plan, the answer to this question is almost certainly yes. If your plan is non-governmental, the answer is almost certainly no. Still, it’s always worth checking the plan rules with your employers.
Government employees generally stay in their jobs for longer than non-government employees, and they’re less likely to have many different governmental retirement savings tax programs such as 401k, 457(b), and 403(b) plans. The typical American citizen may end up with as many as fifteen different retirement savings programs unless they consolidate the number of plans down. Consolidating the number of plans can help streamline and manage their governmental retirement account effectively.
If you're an employee below 50, you can contribute up to $19,500 into your 457(b) savings account in 2021. For those over 50, you have the option to add another $6,500 per year, allowing you to contribute a total of $26,000 annually to your 457(b) savings account.
If you have a 457(b) plan and want to invest some of it into a gold IRA, the best way to achieve this is via a direct rollover into a gold Individual Retirement Account. Many programs offer this option.
You could also take the opportunity to consolidate other retirement savings by setting up other IRA plans to handle all your different investments. You shouldn’t need more than two IRA plans—one for precious metals and one for everything else.
Suppose you have more than one employer-based retirement plan and wish to consolidate the plans into one or two IRA plans; this is called retirement plan consolidation. By consolidating multiple plans into a single plan, you make the burden of administration easier, and, in some cases, this can reduce the fees you have to pay.
For example, you may invest in one gold IRA and one more general IRA plan. By having two plans—one that allows you to invest in precious metals and another that allows you to invest in a wider portfolio of assets, such as stock market bonds and property—you will secure the best of both worlds, allowing for a truly diverse range of assets to help ensure your retirement funds are secure.
Earlier in this article, we stated that the best way to roll over your 457(b) or 401k to a gold IRA plan was by utilizing the direct rollover mechanism. A direct rollover will ensure your funds are transferred without unnecessary tax.
It’s likely that in your current 457(b) retirement plan, all of the assets are stocks. If you have a good financial advisor who is looking out for your best interests, they will help you assess the level of risk you’re prepared to accept and advise you to invest in stocks that have historically performed well, taking into account the level of risk you’re prepared to take. By rolling over some of your 457(b) into a gold IRA or, better still, a more diversified precious metals IRA, you’re setting up an additional level of risk reduction.
Broadly speaking, when the world’s stock markets crash, investors look for safer places to invest their money. For a long time, investors have turned to gold, silver, platinum, and palladium to find this safe haven.
You can see from the chart above that gold has fared reasonably well during every significant decline in the S&P 500. Even if you analyze some key historic dates where our country came under extreme physical threat, such as 9/11, gold opened at $273 per ounce and spiked at $290 that morning, a 6.2% gain in trading. This was a direct result of people looking for the safe haven that gold is known to provide.
Investing in gold is an excellent way of providing additional diversification for part of your retirement funds. If you invest in gold or other precious metals, you’re putting your money into physical assets that are already scarce and will only become rarer over time.
Earlier, we recommended that you don’t hold all of your 457(b) plan in stocks or bonds or in one type of asset. The same logic applies when considering rolling over your 457(b) plan to a gold IRA—only look to invest a portion of your retirement funds in a basket of precious metals. As a maximum, we suggest that no more than 30% of your retirement funds are invested in precious metals.
Further diversification of your gold IRA can be achieved by having some of your precious metals IRA plan invested in bullion and some in qualifying special metal coins. Precious metal coins will always retain their bullion value. Some will even increase in value beyond their melt worth as they become rarer and more sought after by coin collectors.
You can see from the chart above that gold has fared reasonably well during every significant decline in the S&P 500. Even if you analyze some key historic dates where our country came under extreme physical threat, such as 9/11, gold opened at $273 per ounce and spiked at $290 that morning, a 6.2% gain in trading. This was a direct result of people looking for the safe haven that gold is known to provide.
Investing in gold is an excellent way of providing additional diversification for part of your retirement funds. If you invest in gold or other precious metals, you’re putting your money into physical assets that are already scarce and will only become rarer over time.
Earlier, we recommended that you don’t hold all of your 457(b) plan in stocks or bonds or in one type of asset. The same logic applies when considering rolling over your 457(b) plan to a gold IRA—only look to invest a portion of your retirement funds in a basket of precious metals. As a maximum, we suggest that no more than 30% of your retirement funds are invested in precious metals.
Further diversification of your gold IRA can be achieved by having some of your precious metals IRA plan invested in bullion and some in qualifying special metal coins. Precious metal coins will always retain their bullion value. Some will even increase in value beyond their melt worth as they become rarer and more sought after by coin collectors.
Goldco is our prime recommendation if you want 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 separate your precious metals 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 can access your assets whenever you want. 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, which could lock out investors looking to roll over a smaller amount.
Ratings
BBB: A+
Business Consumer Alliance: AAA
TrustLink: 4.8 out of 5 stars based on 253 reviews
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 of Augusta Precious Metals is that you cannot place an online order.
The broker may not be as big on consumer education as the Birch Gold Group but it does offer 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.
Ratings:
BBB: A+
Business Consumer Alliance: AAA
TrustLink: 4.9 out of 5 Stars based on 256 reviews
