How To Rollover Your IRA To Gold? (2022)

March 9, 2022

How To Rollover Your IRA To Gold

Hello! Welcome to my "How To Rollover Your IRA To Gold?" guide and article!

Whatever your investment is today, it is very important that you take precautionary measures to safeguard your wealth.

There are lot of markets out there that can be volatile and are susceptible to inflation, uncertainty and currency debasement. That is why most investors are smart enough to convert some of their investment portfolios into precious metals.

This process is called Gold IRA rollover, which makes an investor to own physical precious metals in his/her retirement account, tax-free.

I have compiled all of the information regarding Gold IRA rollovers in this guide for you. So without any further ado, let's get started.

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What is a Gold IRA Rollover?

Let's start this "How To Rollover Your IRA To Gold" guide by defining what a Gold IRA Rollover is.

It is the process of converting a portion of an existing investment portfolio or a retirement account into physical gold (bullion bars or coins).

A Gold IRA Rollover is done as a way to protect investments from inflation and other economic uncertainties.

During the process, the funds and/or assets are withdrawn from the said existing account and can only be held for no longer than 60 days up until they should be redeposited into the newly created IRA under a Gold IRA custodian.

Difference between a Rollover and Transfer

Rollover and Transfer are the two options that investors must choose from when funding their Gold IRAs.

For a quick comparison, a Gold IRA Transfer is the safer and risk-managed strategy of transferring assets between retirement accounts.

Take note that there are a lot of rules and conditions in a Gold IRA Rollover. Violation of these rules will subject the account holder to several IRS-imposed sanctions.

However, between a transfer and rollover, only a few of these rules apply to a Gold IRA transfer, which is another factor that makes it a bit better.

Below, you can see a comparison table between a Gold IRA Rollover and a Gold IRA Transfer.

Gold IRA Rollover Rules

Gold IRA Transfer Rules

60-day transfer rule applies. The investor must transfer the assets into the gold IRA.

No 60-day rule

Violation of the 60-day transfer rule will make the deposited funds taxable as an ordinary income.

Not taxable

If the account holder is under the minimum withdrawal age of 59.5, then the transferred funds will be subjected to a 10% early withdrawal penalty.

No early withdrawal penalties

No withholding taxes if the rollover is done from a personal IRA to a new IRA.

No withholding taxes

Limited to one rollover for every 365-day calendar.

No annual limits

401 (k) to Gold IRA Rollover

Even though there are investors who would say otherwise, it is completely possible to rollover or transfer assets from an existing self-directed or employer-sponsored 401(k) to a Gold IRA.

However, the process can be tedious because of the different rules.

Performing a rollover of your 401(k) account that was sponsored by your former employer to a new Gold IRA  is quite easy. You only need to look for a Gold IRA custodian and they shall take care of the rollover process.

On the other hand, rolling over a 401(k) account that is sponsored by your current employer into a self-directed IRA can be quite difficult. When you do this, you always have to check the terms of your policy.

There are cases wherein an employer-sponsored 401(k) does not allow gold investments while you are still employed. So be sure to talk with your employer and ask about your 401(k) rules and if you can perform a rollover to your Gold IRA.

Determining your Gold IRA Rollover Strategy

To tell you the truth, there is no exact strategies out there that you can follow when rolling over your Gold IRA. In fact, your financial plans are the ones that will decide your strategy.

The most common question regarding Gold IRAs is the percentage of an investor's portfolio that should be allotted to precious metals.

The answer entirely depends on the investor's willingness to take risks and his/her closeness to retirement.

So if you are not a fan of taking too much risks and maybe you are 10 years away from your retirement age, you are better off allocating your investment portfolio to precious metals (e.g. 15% - 20%).

Selecting your Gold IRA Allocation

A lot of investors today follow the 5-10% rule. However, other investors are willing to go beyond that limit. According to GoldIRAGuide, the factors below can serve as your guide in your decision-making process when it comes to Gold IRAs.

  • Proximity to your retirement age
  • Perspective on the economy over the next 5 to 10 years
  • Performance of your investment portfolio over the past 5 years
  • True purpose for precious metals investments

Physical Gold Rollover and "Paper Gold" Rollover

When we talk about gold investments, there are two options that you can choose from.

The first one is of course, the physical gold, wherein you will invest in real gold and have them stored in secure vaults through a third-party custodian.

The second one is the "paper gold" in which you invest in various gold-based security, like ETF or a gold mining stock.

There are investors out there that believe that investing in gold stocks is better due to the added liquidity. However, this can be equivocal because this means that it is a lot easier to buy and sell the assets.

With this said, "paper gold" is more volatile compared to physical gold. Physical gold on the other hand is more advantageous because of it gives physical ownership, it is transferrable, it can serve as a safe store of value and it is safe from various counterparty risks.

Invest in IRS-Approved Bullion Bars

The IRS has strict rules when it comes to having gold assets in a tax-advantaged retirement account.

That is why you should invest in IRS-approved bullion bars. The following are some of the examples that you can invest in.

  • Johnson Matthey Gold Bars
  • American Eagle Gold Coins
  • Canadian Gold Maple Leaf Coins
  • Credit Suisse Gold Bars
  • Valcambi Gold CombiBar

In terms of collectibles, investors can't invest them on any 401(k) or IRA per IRS regulations. Moreover, coins and precious metals that are listed under IRC Section 401(a) are also not allowed in any IRAs.

However, gold bullion bars are not considered as collectibles. So they can be added to your IRAs. Coins on the other hand, there are exceptions to when they can be invested on for IRAs:

  1. Coins and/or bullion that are kept under a non-bank trustee or a bank.
  2. Various coins listed in 31 USC Section 5112
  3. Coins that are minted and issued under the laws of sovereign states.

Always remember that investing in assets that are not approved can lead to fines and penalties. So to be sure that your investments are safe, invest in gold bullion rather than rare coins.

The Search For The Best Gold IRA Custodian

When you start your Gold IRA Rollover, it is crucial that you find a trustworthy and excellent gold IRA custodian. The best ones out there always take care of the whole process and are very transparent.

In my opinion, these are the two things to look out for if you are searching for a good IRA custodian.

Rollover Limits

Remember that the IRS permit only one penalty-free rollover for ever 365-day period.

So you better make inquire your gold IRA custodian regarding their rollover limits. 

For example, if you wish to change your custodian before your 365-day period ends, then you will be subjected to an early distribution penalty once you roll over your assets again.

Reputation

Of course, one of the most important things to consider is the custodian's reputation.

One of the best ways to check its reputation and whether it is good or not, is by check out its reviews and ratings online.

There are several authority websites that you can trust. Some of them are Better Business Bureau (BBB), Google My Business, Business Consumer Alliance (BCA), and Trustpilot.

Top Gold IRA Companies Today

Below are some of the top Gold IRA companies today. You can click on them to check out my reviews on these companies.

Personally, Augusta Precious Metals is one of the best precious metals companies out there because it is specialized in providing IRA services.

Investors trust its services and products. In fact, Augusta Precious Metals brought home awards that recognize its reputation and services.

Click here to know more about it.

Eligible Accounts For Gold IRA Rollover

I have listed below the various tax-advantaged retirement accounts that you can transfer funds and assets from.

  • Self-directed 401(k)
  • Employer-sponsored 401(k)
  • 403(b)
  • 457(b)
  • Roth or Traditional IRA
  • TSP
  • SEP IRA

Take note that for employer-sponsored accounts, you have to make sure that you will do the rollover after you conclude your employment.

Moreover, there can be cases while you are employed wherein you can do a partial rollover up until you can reach 59.5 years old.

The transfer of funds from your existing account to a new gold IRA account is simply about creating a self-directed IRA through a Gold IRA custodian. Usually, it will only take 2 weeks for your funds to be successfully transferred to your new gold IRA.

Conclusion

Thank you so much for reading my "How To Rollover Your IRA To Gold?" guide!

For a recap, before performing a gold rollover, you have to plan out your strategy and of course, find a good gold IRA custodian.

After all, we are talking about our investments that will secure our retirement, right? So we should be knowledgeable in this industry before acting.

If you have any comments or questions regarding on how to rollover your IRA to gold, feel free to leave them in the comments section below and I would gladly help you out!

Check out my other reviews here!

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