If you have spent any time at all considering your future retirement then you have probably looked at an individual retirement account [IRA] at some point, you may have even thought of a gold IRA rollover. You will probably also realize that when considering investing for your retirement there are many factors that you need to take into account.
An IRA might be a retirement account, but it is also considered an investment tool. You can say that it is pretty similar to a 401(k) retirement plan, but there are a few differences.
The 401(k) retirement plan is known as an arrangement that allows the employees to take compensation in cash or defer a percentage of this compensation to a 401(k) account. Usually, the amount that is deferred to the account is not taxable unless the money is withdrawn, but there are instances where an employee can make 401(k) contributions on an after-tax basis and the money withdrawn will be tax-free immediately.
It doesn’t really matter if you have a 401(k) or you have an IRA account because they are both great investment tools. However, some of you may have seen a gold IRA rollover guide before and wondered how that fits into the picture.
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WHAT IS A GOLD IRA ROLLOVER?
A gold IRA rollover is simply the process of transferring a portion of your IRA investment fund into gold. Most of you have probably heard about gold investment before and many people are taking advantage of this because gold can provide protection against currency debasement, economic uncertainty and inflation.
A gold IRA rollover is not only limited to IRA account holders because if you have a 401(k) retirement plan, you would also be entitled to rollover some or all of your funds to gold. If you are currently a holder of a 401(k) account, rollovers are usually permitted when you switch jobs or when you retire. If you are going to use an IRA, you can freely switch to a different custodian.
Is It a Good Idea to Opt for a Gold IRA Rollover?
Some of you are probably asking why you should consider rolling over your 401k into a gold IRA. The answer is very simple. Bonds, stocks or other assets that are bound to the dollar are susceptible to inflation, currency debasement and more. They are more likely to be affected by a volatile market and there is a possibility that your investment could be adversely affected. This is a risk that some people do not want to take, especially when it comes to retirement planning.
The best possible way to make sure that a part of your retirement plan is protected, is through a gold IRA rollover. Please be clear that there is no guarantee that the value of gold will continue to rise and not fall, but for many years its value has returned a constant appreciation. Gold investment has shown to be a sensible method to help protect your investment funds against inflation and other changes in the market.
It is true that whatever you rollover into gold, it is likely to show a small but steady growth and not the dazzling returns that some riskier investments can provide. But this is the reason why usually you only rollover a part of your retirement plan. Safe in the knowledge that the majority of your retirement investment fund is safely protected in gold, some investors are happy to let the balance of their retirement fund be placed in riskier investment vehicles.
You can of course choose to rollover all your assets into gold, it depends on your situation and your tolerance of risk when it comes to your retirement account. So basically, rolling over 401k to gold might be a great idea if you want a more cautious approach and are averse to taking risks with any of your assets.
THE DIFFERENT BENEFITS & DOWNFALLS OF TRANSFERRING IRA TO GOLD
If you have an IRA account and you want to transfer some or all of your assets to gold, it is better to know the possible benefits and downfalls (or pros and cons) that you can get from this. You cannot simply transfer your IRA to gold without knowing anything about this. Before you rollover your assets to gold, here are some of the known benefits of gold IRA rollover.
One of the main reasons to transfer your assets to gold is to help preserve wealth, especially if you want to make sure that the value of your investment will not drop in the years to come. There is no guarantee that gold prices will remain the same and it will not go down in the following years, but based on the current trend, values will continue to grow.
Gold is always in demand and since the mining and production of gold has slowed down, we can expect the value of the metal will increase still further in the future.
Basically, liquidity is also one of the reasons why most people are transferring their assets to gold. It means that you can always sell it with relative ease if you want to cash in your investment. Since gold is always in demand, if you will put it on sale, it is extremely likely to be disposed of quickly. This will ensure that you can monetize your investment anytime you feel like it. As a matter of fact, there are gold investment firms with a buy-back program that will allow you to sell back the gold that you’ve bought from them for a fair price.
You have to remember that a diverse investment portfolio will always be a good thing. It means that you should have different investment types and you are not only focusing on a single one. Spreading your risk is a prudent investment strategy.
You are allowed to mix standard paper-based portfolios like stocks and mutual funds with gold based investments. Also, you can invest in other precious metals like silver and platinum for example.
We are always looking for protection when it comes to investment. The only thing is that you cannot usually make profits if you are not willing to take a risk. However, if you only need protection and you don’t have any plans on making huge profits for a shorter period, a gold IRA rollover will be a great, safe choice.
Gold is protected from hyperinflation, its value is immune to economic influences and it does not depreciate often like other types of investment. This is one of the most stable investments that you can make so you can be assured that your money is as well-protected as it can be.
A gold IRA rollover is definitely a good move if you want to protect your assets, but it is not applicable in all circumstances. It is better to check your current circumstances and see if a rollover will benefit you or not.
If you have a 401(k) retirement plan, it is not a bad idea to switch to gold IRA and it is already proven to offer a wide range of benefits. You can ask for professional advice to help you with this or you can do your own research. The main thing that you have to remember is that a gold IRA rollover can provide the best benefits if used correctly in the right circumstances.
BELOW ARE A FEW OF THE DOWNFALLS/CONS ASSOCIATED TO GOLD IRA ROLLOVERS:
•The gold IRAs are not designed for a quick profit of short term investment
•They fail to offer interest payments, dividends or yields
Here are a few of the disadvantages in more detail:
MOST ACCOUNT ADMINISTRATORS WILL NOT PERMIT THE INVESTORS TO PHYSICALLY INVENTORY THEIR GOLD HOLDINGS
The investor may be given information on where the Gold IRA holdings will be stored in a particular depository. However, with a bit of persistence the investor may be able to obtain, the website, address and phone number for the vault, but this information will still not allow for the investor to go inside the actual vault to examine their physical inventory. What this means is that the investor will need to place their trust in their IRA precious metals administrator.
Today, there are a few of the self-directed IRA depositories and managers who do allow their investors to schedule an appointment and then the investor is required to pay a set fee to view their physical gold holdings. For those investors who may be concerned or want the peace-of-mind to know exactly where their gold is held, this may be the more viable option to choose.
THE GOLD IRAS ARE A LONG TERM INVESTMENT AND NOT FOR INDIVIDUALS IN SEARCH OF A WAY TO MAKE A QUICK PROFIT
The process of holding a Gold IRA is for long-term purposes. If you are looking for away to gain quick scores associated with fast moves in the gold prices, then you are better served to purchase a major gold ETF opposed to opening a Gold IRA account. The Gold IRA accounts are not designed to provide quick returns, In fact, the fees associated with selling and buying gold are already high enough, which means they would in reality in most cases fail to offer a profit on the relatively small moves.
THE GOLD IRAS DO NOT PAY OUT-YIELDS, INTERESTS OR DIVIDENDS
Many of the investors often become fixated on the interest payments which bonds can potentially provide or dividends that the stocks are predicted to one-day payout. Investors will not receive interests or dividends with gold that is held physically. The most investors can be hopeful for in association to these retirement account types will be to gain values on the capital appreciation of the holdings associated with the actual gold price. However, with a bit of patience, these strategies are more than likely to pay the investor off in a profitable way in regards to the long-term.
CAN DIFFERENT RETIREMENT ACCOUNT TYPES BE ROLLED OVER INTO GOLD IRAS?
Today there are some retirement accounts that qualify in association to the process of rolling them over into the gold IRAs:
However, a few restrictions will be applicable. An example of this would be investors that would like to complete a 401 (k) into one of the gold rollovers have to be 59 years and six months of age or older or have stopped working for an employer who was the first entity to initiate the individual’s retirement account.
THE BASIC STEPS INVOLVED IN A GOLD IRA ROLLOVER
To perform a Gold IRA rollover successfully, the investor needs to first consult with the types of companies that specialize and handle gold IRAs as well as complete the required forms from the IRS. The various options that can include percentages of the total 401 (k) that will be converted into gold will also need to be decided on. The next step will involve the investor making a decision on the types of metals that they would like to include and feature in their own personal precious metal IRA. The final step involves that the selected metals are then sent onto a custodian who was chosen by this investor.
SHOULD INVESTORS DO GOLD IRA ROLLOVERS NOW OR SHOULD THEY WAIT?
It is always important for investors to keep in mind that a metal such as gold is always recognized as a compelling investment choice due to its extremely stable value as well as that these assets are tangible. For investors who may not be planning to retire anytime soon, it is highly suggested to roll over a portion of their retirement accounts into gold. For those that are coming closer to their retirement years, these investors can benefit from analyzing their finances carefully to make a decision on some investments they have available to roll them over into the form of gold. The reason for this is that the stability associated with the value of the gold becomes more apparent when it is measured over a longer period.
WHAT TO DO NEXT?
If you are interested in rolling over all or part of your ira or 401(k) in to gold investment, then the first thing you want to do is speak to a gold IRA specialist. We have drawn up a comprehensive list of the top gold ira companies on the market, for you to compare and contrast against each other, to find the right one for you. We do recommend Regal Assets and give our full reasoning behind this choice. You can also request a free, no obligation gold ira rollover kit, by simply clicking on the image below and telling us where you want your kit sent to.