When it comes to safeguarding your retirement savings from future uncertainties, while also enjoying the benefits of a tax-deferred savings plan, rolling over your IRA into a gold investment account makes a lot of sense.
There are many reasons why you should consider a gold IRA rollover. For starters, through a gold IRA rollover, you get the opportunity to diversify your investment portfolio – in addition to being able to hold traditional financial assets and securities, you can also invest directly in gold or other precious metals.
To find out more about how you can use your IRA to invest in gold, read on below.
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What Is A Gold IRA?
You will need to use a gold IRA plan in order to invest your retirement savings in gold. Established by the Tax Payer Relief Act of 1997, a gold IRA can be defined as a long term retirement account in which a designated custodian can hold gold (or other precious metals including palladium, silver and platinum) on behalf of the owner of the account.
In their most basic form, Gold IRA plans are simply self-directed IRAs that allow holders to invest in a variety of precious metals.
When setting up a gold IRA, you can use funds drawn from a traditional or Roth IRA.
How To Rollover Your IRA Into A Gold Investment Account
- Open Self Directed IRA
To invest your retirement savings in gold, you will need to open a self-directed IRA account; if you do not already have one. With such an account, you have the freedom to invest in a wider variety of assets – including precious metals.
If you intend to invest in physical gold, be sure to open an account with a custodian that allows it. You are not allowed to take physical possession of the gold you purchase using your retirement funds if you want to continue enjoying the tax advantages of investing through an IRA plan. As such, it’s important to choose a custodian that is also allowed to take possession of the gold, and store it, on your behalf.
To finalize the opening of a self-directed IRA, be sure to complete all the necessary paperwork before handing it to the relevant custodian for approval.
- Rollover The Applicable Funds
Now that you have opened the necessary IRA account, you can move on to the next step, funding your investment in gold through an IRA rollover. Simply put, you will need to move funds from your current IRA plan to the newly opened self-directed plan. The applicable funds can be moved in two ways i.e. through a direct or indirect transfer.
In a direct transfer, you are simply required to direct the custodian of your current plan to transfer the necessary funds to the custodian of your newly opened gold IRA plan. This can be done in the form of a direct wire transfer or check sent directly to the custodian of your self-directed IRA account. In addition to being effortless, a direct transfer also ensures that the rollover complies with all applicable IRS rules.
In an indirect transfer, you are required to withdraw funds from your current plan, and subsequently deposit the money in your new plan within 60 days. Otherwise, the transaction will be treated as a taxable withdrawal. Furthermore, you may be liable to pay a 10 per cent early withdrawal fee if you are under 59½ years old.
- Buy Gold Coins Or Bullion
Once the funds are in your account, you will be ready to start investing in gold. To buy gold (or any other permitted precious metals) you will need to contact a precious metals dealer. It is important to note that you can only purchase gold bullion or coins that meet the standards set forth by the IRS – i.e. IRS approved gold coins or gold bars with 99.5% purity.
To make a purchase, just get in touch with your chosen gold dealer – and strike a purchase deal – and then instruct the custodian of your gold IRA to make the necessary payment.
After the payment is made, the dealer will then transport the gold to an approved depository (storage facility) managed by your custodian. Remember to ask for a receipt of the purchase and verification from your dealer as well as the custodian of delivery of the goods in question.
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- Track Your Gold Investment
Once the purchase is complete, and you are done with your initial investment in gold, all that remains is for you to track the performance of your investment from time to time.
To ensure that you have all the information you need, your custodian will furnish you with detailed periodic reports of your gold holdings. Depending on your retirement investment strategy, you can buy or sell your gold holdings depending on market performance.
If you have a retirement savings plan, you can invest in gold or any other precious metals through a gold IRA rollover. This way, you can continue enjoying the benefits of a tax-deferred savings plan.
By investing part of your retirement savings in physical gold, you get to diversify your investment portfolio, safeguard your savings against inflation and also own a physical asset that can be passed on to future generations.
To rollover your IRA into a gold investment account, you will need to follow a simple but specific process as described above or learn more by visiting oatmangold.net.