If you want to rollover your 401k to an IRA, you have probably been presented with the option of rolling over a 401k to a Gold IRA. When you rollover to a Gold IRA, you simply have an account backed by gold instead of the US Dollar. Even though there are many investors who do no support this choice arguing that gold is volatile and can easily be affected by political and financial issues, gold as a long term investment option is much reliable than other types of investments. When you take a closer look at the performance of gold, it is the best option for 401k rollover.
Important Fact That You Need To Know About Rolling Over a 401k to a Gold IRA
There are two types of Gold-IRA that you can decide to rollover a 401k into. Each of them has good returns. The two option are Gold IRA based on gold mining stock and Gold IRA backed by physical gold. Gold mining stocks are much cheaper and have better returns. However, if the mine fails, the stock will fail too. Physical gold on the other hand is more expensive and does not have a stable value. The advantage of physical gold is that it can never completely lose its value even when there is a market dip or financial crisis.
There are rules that govern 401k to gold IRA rollover. Your professional custodian should know all the rules. One important rule that you should know as the investor is that it is possible to add the 401k amount that you re rolling over to a gold IRA using any of your assets. However, you cannot be allowed to add physical gold to increase the purchasing power of your Gold IRA. You allowed to use gold mining stocks, bullion or any other physical form of gold.
You need a custodian to handle your Gold IRA. The responsibility of the custodian is to roll over funds from 401k to Gold IRA. During this process, the custodian must ensure that all regulations and tax laws are adhered to.
You will also have to know whether your custodian is passive or active. If your custodian is passive, they will always wait on your instructions before doing anything. A passive custodian can never do anything on your behalf. If your custodian is active, they will constantly give you insight and advice based on market trends so that you can maximize on your retirement investments.
There are few risks involved when you opt for a 401k to gold IRA rollover. Gold has been a good form of investment for many years and is still expected to remain so in the foreseeable future. If you still have second thoughts, the best way is to rollover a small part of your 401k in a Gold-IRA.
These fact will help you make better choices when deciding whether you should opt for a 401k to gold IRA rollover. Generally, 401K to gold rollover has been a good option for many people to date.The key is to work with a professional and reputable Gold IRA company.