If you are looking to get better returns from your 401k plan you should consider transferring it into a Gold Investment Retirement Account (IRA). A Gold IRA functions in the exact way a traditional IRA does with the only difference being that you are allowed to hold precious metals such as gold, platinum, and silver, as opposed to bonds or stocks.
- 1 How to Convert a 401k into a Gold IRA
- 2 Final Thoughts
How to Convert a 401k into a Gold IRA
Converting a 401 (k) plan into a Gold IRA might sound or even appear complicated, but it is relatively easy to do. To do that, you must first have funds in your 401(k) that are eligible for rollover. Once you roll over the funds into your self-directed individual retirement account, you can use the funds to purchase gold bullion.
Step 1: Pick a Self-Directed IRA Custodian
IRA custodians usually limit you to the purchase of traditional investments, but self-directed account trustees will allow you to choose from other investments that are allowed by the IRS such as gold, silver, and other precious metals. To purchase gold for your IRA, you should first open an account with a custodian that allows you to hold precious metals and arranges storage.
Step 2: Roll Over the Eligible Funds
You can rollover the eligible funds from your 401k plan after selecting a custodian and submitting all the relevant paperwork to them. To get started, just get in touch with the plan administrator and let them know that you wish to rollover funds to your self-directed IRA. It is important to put the money in the self-directed IRA within 60 days of receiving it.
Step 3: Purchase Gold with Your Gold IRA
Once the funds have been added to your self-directed account, you can shop for gold and other precious metals. The gold purchased for the IRA must be at least 99.5% pure and in the form of bullion or IRS-approved and non-collectible coins. Let the precious metal dealer know that you are purchasing the gold for a self-directed IRA and then request the custodian to pay the precious metals dealer using the funds in your IRA.
Step 4: Arrange Shipment to an Authorized Depository
Once you have decided on a purchase and settled on a price with the dealer, the dealer will invoice the IRA custodian for payment. Upon receiving the funds, the dealer will ship the gold to the storage facility provided by the custodian. Verify with both the dealer and custodian that the gold has arrived and don’t forget to ask for a receipt to keep a personal record.
Step 5: Check Account Statements on Your Holdings Regularly
The gold IRA rollover is now complete and you have already secured your first purchase and can now start looking forward to regular statements about your investments and holdings from your custodian. Tracking investments will help you know exactly when to either add more or sell a portion of your portfolio as you navigate the market while preparing for retirement.
If you are looking to convert your 401k to a Gold IRA, you should follow the steps provided here. Still, you need to ensure that you partner with a trusted partner to help you along the way as you make gold, silver, and other precious metals part of your retirement investment.