Understanding Gold IRA Rollover
What is a Gold IRA?
A Gold IRA is an individual retirement account that enables investors to hold physical assets as their retirement portfolios. Usually, both Roth IRAs and traditional accounts can only hold bonds, cash, and stock. The Taxpayer Relief Act of 1997 expanded the investment types allowed in IRAs to include some valuable metals. However, all precious metals are not allowed to date. Typically, the metals that are allowed are silver, gold, palladium, and platinum. Moreover, tax law further specifies the standard of purity for each metal.
What is a Rollover?
If your retirement plan is through your employer and you are thinking of switching your job, you can roll the money from your current IRA into another IRA. You can also do this if a different IRA is offering better investment opportunities. However, you would still be required to follow certain rules and regulations. The same applies to a Gold IRA but with stricter rules to follow. The three basic conditions for a rollover to occur are:
- The sponsoring company has changed its retirement plan
- The sponsoring company has changed the custodians for the retirement plan
- Termination of employment with the sponsor company.
The IRA stipulates only three ways for the completion of a rollover :
- Direct Rollover: in this method, your plan administrator directly issues a check to the IRA of your choice. This method assures zero tax withholding from your rollover.
- Trustee-to-Trustee Rollover: The trustee of your previous IRA can facilitate a rollover to your current IRA trustee. This method also ensures zero tax withheld.
- 60 Day Rollover: A check for the amount of your current rollover is issued in your name. No taxes are withheld if you invest this amount in another IRA within 60 days.
How Are Gold IRA Rollovers Different?
The primary things that an investor should decide are whether to invest in gold company stock, actual gold, an exchange-traded gold fund, or a mutual gold fund. Keep in mind that it is a requirement that your gold must be kept by an IRS- approved custodian and shouldn’t be kept in-home storage.
Rolling retirement funds into a gold IRA can be expensive and complicated. You will be required to establish a self-directed IRA. This will enable you to invest in a broader range of assets. You will also have to choose a custodian for the administration and creation of your self-directed account. It is a must that your chosen custodian has the facilities to hold physical gold and approvals by state and federal agencies for providing asset custody services.
You will require a broker after that to purchase physical gold. A reliable broker is tasked with purchasing the gold according to the federal government’s standards. Only after buying the gold, your new IRA can be stored with the custodian.
Rolling your investment in a gold IRA is a great option for individuals who want to keep themselves from the uncertainty of the stock market. If you think a gold IRA suits you, contact us at Orion Metal Exchange and let us help you get going. We are not just your financial planners. Think of us as your financial partner!