Gold IRA Rollover: Decisions, Rules, and Strategy

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The stability of the more traditional retirement funding instruments has, as of late, come under some scrutiny regard their stability and long-term viability. Having a retirement portfolio that leans heavily towards bonds, stocks, and other mutual fund investments, relying mainly on the strength and bargaining power of the US dollar, it may be time to diversify your investments a little. Have you ever considered a shift to gold bullion or coins as an added portfolio protection measure against inflation, the current economic degradation, and future economic uncertainties? Perhaps now is that time?

Of course, the simple transfer of funds from an IRA to a Gold IRA is an option, rollover is a safer, and more tax-advantageous strategy when it comes to shifting around your retirement funding. Let’s take a closer look at some of the steps and decisions involved in a Gold IRA rollover.

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Gold IRA Rollover: Decisions, Rules, and Strategy

Rollover and Transfer Rules and Differences

The most important point to note here is how the Internal Revenue Services (IRS) make the distinction between a rollover and a transfer, and the possible effects that it may have on you and your decision.

Rollover: In a rollover, the money being moved or shifted, is first paid out to you, and is only then deposited into another account.

Funds Transfer: During a funds transfer, the original custodian of the IRA transfers the money directly to your newly appointed IRA custodian, without you ever actually seeing the money.

Want to learn more about what options you have for this kind of investment? View The Collection here.

Rules for Gold IRA Rollover

In a Gold IRA Rollover, the funds received by the investor must be deposited into the new custodian or Gold IRA Company within 60 days of being received. If this is not done within the specified time frame, a 10% early withdrawal penalty is enforced on the money and is seen as a taxable withdrawal, and only if the person withdrawing the funds is younger than 59 1/2 years old. A Gold IRA Rollover is limited to one per year (12 month period).

Rules for Gold IRA Transfer

With a direct custodian-to-custodian IRA transfer, there is no 60-day transfer window rule since the money is never received, merely transferred. Transfers are usually made directly between the respective IRA custodians, with the original custodian issuing a check to accomplish the transfer, and sending it out via mail.

Check Your Employers 401K

401k’s come with slightly different rules regarding rollover’s and transfers and should be checked first. Some employers not allowing investments in gold as part of their 401k, so make sure that you understand your employer’s 401k plan. Knowing what these restrictions are early on is going to help you to plan better.

Gold IRA Investment Strategy Decisions

Once you decide to invest in a Gold IRA Rollover, there are a few important things that you need to understand regarding making effective strategic decisions that affect your long, and short-term planning needs. One question that you must ask yourself is: “What is my main reason for wanting to invest in gold bullion?”

Protection and Diversification

You may feel that your current portfolio leans a little bit heavy on the sides of stocks, bonds, and other mutual fund options, and if you do, think about this. An allocation of merely 5-10% of your entire portfolio into precious metals will help you to effectively protect and diversify your portfolio.

Loss of Trust in the USD

Paper currencies have of late, not been the backbone of investor confidence, and a broader allocation of one’s portfolio is a common strategy to hedge these inherent risks.

Future Profits

Following the movements of strong net worth investors has the potential to generate large profits in the foreseeable future, generating additional investor confidence and the potential for unlimited growth.

Notable Restrictions

When it comes to the purchase and investment in types of gold bullion, the IRS has put some strict rules in place to govern and control these transactions. Coins need to be minted to a minimum level of purity, 99.9% or better and includes the American gold and silver eagle, the Canadian Gold Maple Leaf, The Australian Philharmonic, the American gold and silver buffalo, and other similar coins, including the Credit Suisse gold bar.