Can I Buy Gold With My TSP?
As a federal employee, you have access to the Thrift Savings Plan (TSP), an employee retirement savings account similar to private employer 401(k) plans that offers retirement savings plans with limited investment choices such as precious metals.
One option for expanding your investment options is transferring your TSP into a self-directed IRA that permits investments such as physical gold. Unfortunately, this method can be complex, leading to tax payments and stripping away tax-deferred retirement savings altogether.
How to Buy Gold With Your TSP
Thrift Savings Plan offers only five investment options at present, prompting many investors to move away from it in favor of gold IRAs – providing diversification via physical precious metals that protect against inflation and global economic collapse.
Gold and silver can provide protection from these threats more effectively than paper assets can. While your TSP does offer investments in “paper gold”, such as shares in gold mining companies or exchange-traded funds (ETFs), their prices don’t always correspond directly with physical gold prices.
However, the Thrift Savings Plan’s (TSP) restrictions on precious metals can be overcome in several ways. Once you retire or leave federal service, once your TSP account has been converted to either an individual 401(k) plan for self-employed investors or Gold IRA plan for individuals who wish to invest in physical gold bullion coins and bars tax-free. Augusta Precious Metals offers FREE Investor Kits that make this easy – request one now!
An Individual Retirement Account, or IRA, provides investors with an opportunity to invest in physical precious metals without exposure to counterparty risk or inflation over millennia.
Are You Looking To Add Precious Metals To Your Retirement Portfolio? Consider Rolling Over Your TSP into an Asset Protection Trust Account (ATP). However, it is essential that you fully understand all applicable rules and fees associated with an ATP rollover as it requires following certain procedures within 60 days or else the IRS will treat it as a withdrawal and assess applicable taxes and penalties accordingly.
The trustee-to-trustee transfer method is one of the easiest and fastest ways to transform your TSP into a gold IRA, enabling you to avoid the 60-day rollover deadline. However, you will likely require finding a trustworthy self-directed IRA custodian that can suggest third-party vaulting and storage providers at competitive fees – some charge a percentage or flat rates for transactions performed while others use an asset valuation approach.
Gold provides an effective hedge against volatile stock markets or rising interest rates; and once you leave federal service, your Thrift Savings Plan funds can be converted to an individual Retirement Account (IRA).
Before rolling over any TSP money into a precious metals IRA, however, it is essential to carefully consider fees. Some IRA companies charge flat fees per transaction while others take a percentage of assets under management as management fees. Furthermore, you should account for third-party storage or insurance premiums which may apply.
Keep in mind that gold doesn’t generate income on its own – its price is solely determined by speculation, and it does not produce interest or dividends like bonds and real estate do. So while investing in precious metals could protect retirement funds against inflation, it will not generate additional funds on its own. Most investment gurus recommend adding some precious metals to your retirement portfolio but make sure you find a reputable dealer when adding this asset class.
As pre-retirees saw their retirement savings decrease during the 2007-2008 financial collapse, they sought ways to protect and diversify their investments by rolling over their TSP into a Gold IRA – which allows them to invest in precious metals such as gold and silver.
To do so, they must locate a self-directed IRA administrator who can recommend a third-party vaulting and storage provider who adheres to stringent regulations that ensure coins and bars are of exact weight and purity.
Thrift Savings Plan does not currently permit investors to hold physical precious metals like gold and silver bullion or real estate as assets in their accounts, leaving them dangerously overexposed to stocks and bonds in an event of stock market crash or debt-induced economic crisis. Paper stocks which represent precious metal mining companies could offer indirect exposure.