Nowadays, it is very easy to convert your 401(k) to a Gold IRA. Today, many investors prefer to take care of their own investments rather than depending on financial institutions or governments. In addition, many people across the world are now considering investing in gold rather than currencies. This is because currencies lose value over time as a result of uncertainty in the markets. On the other hand, gold keeps on appreciating and increasing in value over time.
In order for you to transfer your 401(k) plan to gold IRA; you have to understand the various investments plans available. There is a certain procedure that you must follow. Here are top three ways of transferring your 401(k) to a Gold IRA also known as a gold IRA rollover (as you may have seen in the TV commercials from Lear Capital or the commercials for Rosland Capital)
Direct 401(k) Rollover
Direct 401(k) is the simplest way to convert your 401(k) to a Gold IRA. The process involves opening a new gold account and transferring your present account balance to that account. The main advantage of this procedure is that you get to enjoy all the tax benefits. What’s more, your previous employer will not have any rights to hold anything from your account. You will transfer everything from your previous account and you will not pay any taxes. Many people prefer this option of converting 401(k) to a Gold IRA because it is easy and has many advantages. You just need to fill a few forms and your transaction is done.
Indirect 401(k) Rollover
When it comes to indirect 401(k) rollover, the process is somewhat similar to the direct approach though a little bit complicated. The good news is that you are still going to enjoy all the tax benefits. The only difference here is that instead of you transferring your money to your new gold account, your employer will send the cash directly in check form, and then you will use the money to buy the gold. Once you receive the check from your employer, you are supposed to buy the gold within a period of 60 days. If you fail to bank the check on time, some money may be deducted from your retirement account. It is therefore advisable that you bank the check on time to avoid such unnecessary deductions.
Seeking the Help of a Broker
If you are not sure about where to start, you can seek the help of a broker. A Gold IRA company or custodian will help you in converting your 401(k) to a Gold IRA. These people are usually familiar with all the rules and regulations that are involved in this process. In addition, they will tell you everything that you need to know and give you all your options. They will also fill the form and do all the paperwork for you; your work will be only to sign them.
Although a good gold IRA custodian would provide you complete guidance, it’s very important that you are personally aware of the laws and rules involved in this process. For example, the gold that you purchase must meet the minimum required purity level of 99.5 percent and you must transfer your 401(k) to your new gold account within a period of 60 days in order to avoid unnecessary taxes.