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Gold-Backed IRAs & Everything You Need to Know

Protect Your Retirement Investments Through a Gold IRA Rollover. 

Physical Gold Bullion to Diversify Your 401k

Imagine working your entire life, carefully planning and saving for the day you're able to retire and comfortably live off of your hard-earned investments. Taking the vacations you’ve been waiting to have the time and resources to take, visiting your grandchildren whenever you’d like, or maybe having the time and money to work on projects you have so long put off. 

Maybe these scenarios are easy to imagine because you are close to retirement or have just recently retired. Maybe retirement is in the not-so-distant future and you’re assessing your finances for when the day finally comes.

In this uncertain time, protecting you and your family’s financial legacy against the next stock market crash is a must. You’ve worked hard for your wealth and retirement nest egg. 

Diversify Your Retirement Nest Egg With Gold IRA Rollovers

Homes and cars have insurance. What about your retirement savings? What insurance do you have in place to make sure your retirement is recession-proof? Having a gold-backed Individual Retirement Account gives you the insurance and peace of mind you need to be set for retirement. 

When it comes to investing in precious metals, individual retirement accounts, and Gold IRA rollovers- where do you start? In this article, you will learn how physical bullion protects your retirement savings from being wiped out during stock market crashes caused by economic uncertainties and political transitions, and unrest. 

We will walk you through step-by-step and explain everything you need to know about a gold IRA investment, making an informed decision, and how easy it is to diversify your retirement account with bullion and other precious metals.
Diversifying your assets - Learn how to move 401k to gold without penalty

How Does a Gold-Backed IRA Work and Act as Portfolio Insurance?

Physical gold or other IRA-approved precious metals such as silver, palladium, and platinum are held in what is commonly called a Gold IRA. The purpose and function are the same as a regular Individual Retirement Account, except it holds IRA-approved bullion rather than paper assets. 

Being able to invest without the worry of inflation and how inflation erodes the value of the dollar, a precious metals-backed account offers security and is the ideal safeguard against inflation.

Protecting your portfolio from market shocks and the next stock market crash is the name of the game when it comes to a gold-backed retirement account. Insurance for your portfolio, if you will. This isn’t a strategy for getting rich, but rather, staying rich.  

Take a look at the most recent stock market crash of 2020. Various sectors of the market took a sharp decline: entertainment, hospitality, petroleum, to name a few. In anticipation of recession fears, investors started selling their shares and stock prices fell. When stock prices fell, we’re talking about a significant loss in paper wealth and your investments lost value. How much loss in value? During a two-week window of March 2020, the S&P500 lost 34% of its value.        

What are the Benefits of Gold IRA?

The Increasing Value

Analyzing the trend of gold value from the period of 1999 until 2011, the price per ounce went from $255 to surpassing $1,800. That kind of growth rate over a decade was remarkable. Even more remarkable? The value wasn’t negatively affected during several significant stock market crashes during that same period. Notably, the bear market of 2007-2009 where the S&P 500 lost over 50% of its value, bringing back a Great Depression-era scale collapse of the stock market. And we can’t forget the financial crisis of 2008. 

The chart below shows the price per ounce over the last 10 years. At the start of the COVID19 pandemic in March 2020 the price per ounce was just shy of $1,700. It increased from there and peaked at over $1,900 in July 2020. It is currently just under 1,800 an ounce. Based on these trends and once the long-term economic effects from the pandemic level off and the stock markets respond accordingly, further growth is inevitable.
Price Per Ounce of Gold Over The Past 10 Years

A Gold-Backed IRA is a Sustainable Safeguard and Protection

Based on some of the history of stock market crashes explained above, it is evident that the price of bullion acts oppositely to paper assets when facing a crash or recession. When you choose to invest in bars and bullion, your investment is safe in the event of another economic downturn and helps diversify your paper assets. 

Diversifying investment portfolios is sound advice for minimizing risk to avoid a negative return in the long run. There are many ways to diversify and investing in precious metals is a preferred method among risk-averse investors. Investors convert a portion of their investment funds into gold bullion through precious metal IRAs.

The traditional rule of thumb for the amount of precious metals allocated to help diversify your investment funds is 5-10%. When you add up all of your investable assets including mutual funds, bonds, or stocks, 5-10% of that total will help to effectively diversify your investments. Everyone has a different level of risk they’re comfortable with. Generally, as you approach retirement, precious metals are a preferred investment instead of equities. 

Disclaimer: This website functions to provide our readers with as much information as possible and is intended for informational purposes only. Ultimately, you want to consult with your financial advisor before making an investment decision.
Holding Gold in an IRA


Tax Benefit of a Precious Metals IRA

All Individual Retirement Accounts offer tax benefits. As long as the precious metals stay in the Individual Retirement Account and you do not take possession of them, you will not incur taxes or duties. 

Converting an existing IRA to a precious metals IRA, also known as a gold IRA rollover, will not incur taxes since you’re moving funds between qualified, tax-deferred accounts. A precious metals IRA rollover from a TSP, 401(k), 457(b), or 403(b) also has the same tax benefits. More on gold IRA rollovers below.

 

How to Own Gold in an IRA

Traditional IRAs have restrictions on what investment products can be held within the account. Establishing a self-directed Individual Retirement Account will allow you to own a wider range of investment products within the account. For precious metal IRAs, you’ll need a broker to buy the precious metals and a custodian to create and administer the account. This company will store or hold your actual bars or coins.

Is Home Storage an Option?

The IRS makes it very clear that they do not want you storing precious metals in your home or safety deposit box that’s supposed to be held in a self-directed Individual Retirement Account. The IRS will likely view that as an IRA distribution and is subject to taxation. And worse, if you’re younger than 59 1/2 years old, an additional 10% penalty for early withdrawal will be applied. Read more on IRS rules if you’re so inclined. You will need to store your physical gold in a depository or bank to store the metals for you. A custodian will handle all of this for you.


What are Gold IRA Rollovers and How do They Work?

Moving funds from an existing retirement account into an Individual Retirement Account that holds precious metals such as silver, gold, palladium, or platinum are known as gold IRA rollovers. These are Self Directed accounts that act like traditional individual retirement accounts except they are meant to hold alternative assets such as these precious metals.

What Types of Retirement Accounts Qualify for Gold IRA Rollovers?

401(k)s. You have a few options here. If you’re currently employed with the same company that created the 401k for you or if you are no longer with that employer and the 401k is no longer active. If you’re no longer employed with the company that created it, you can execute a gold IRA rollover. If you’re still with that current employer, you may be able to do a partial rollover if you are over 59 1/2 years old. This is called an in-service withdrawal. 

IRAs You can transfer any existing Traditional, Roth, SEP, Simple, or Self Directed to a precious metals IRA.

403(b) Thisplan is a retirement account available to tax-exempt organizations and public school employees. A gold IRA rollover can be completed with a 403(b) plan after you are no longer an employee. If still employed, a partial rollover can be done after you’ve turned 59 1/2 via an in-service withdrawal in some cases. 

457(b) plan is a retirement account offered to civil servant employees of state and local government. A rollover is permitted once no longer employed at the institution or in some cases at 70.5 years of age if still employed.

TSPs are retirement accounts for federal government employees and military personnel are called Thrift Savings Plans. Gold IRA rollovers can take place after you are no longer employed with the institution. If you’ve reached 59.5 years of age and still employed with the institution, a partial rollover via an in-service withdrawal may be done. 

 

I Want to Rollover My Current Retirement Account Into a Gold IRA 

You'll need to establish a self-directed Individual Retirement Account first if you're looking to do a rollover. A reputable custodian will walk you through each step of this process to ultimately rollover part of your retirement account into a gold-backed retirement account.

The custodians that we’ve reviewed below assist with all paperwork and transfers for precious metal IRA rollovers to ensure a seamless transfer. After transactions were completed, customer’s reviewed their experiences and highlighted this benefit, and appreciated the smooth customer service experience from start to finish.


Moving a 401k to Gold Without Penalty

One rollover is permitted from an IRA or 401k each year when rolling over your 401k to a gold IRA.  You have a sixty-day window to rollover the funds from your 401k into your Self Directed IRA to avoid penalty. As long as this process is completed within the specified time-frame, you will not incur a penalty for doing so.

 The IRS only permits 1 rollover (per account) during a 12 month period. However, you are allowed unlimited custodian to custodian transfers.

401k to Gold IRA Rollover Guide    

Here we’ll guide you through the next steps to take if you’re considering Gold IRA rollovers. The process and timeline, choosing the best custodian based on 4 key factors to evaluate and side-by-side comparison on the top companies we found in the business that had the best reviews.

Gold IRA Rollover Process and Timeline for Completion

The timeline is dependent on the type of rollover you’re doing. For an indirect rollover, your existing 401k provider mails you a check with the funds that you deposit into your bank account. You then have sixty days to re-deposit those funds into your new account. If this does not take place within the sixty-day window, penalties and tax implications will occur.  

Direct rollovers are preferred and is easier for you, the investor. Your 401(k) provider will issue a check payable to your new custodian which will be mailed directly to them or mailed to you and you’ll then forward on to them. 

For most 401(k) providers, usually, a phone call can initiate gold IRA rollovers. TSP and 457(b) accounts require documents to be completed per government protocol. The rollover process can take anywhere from two and six weeks to be completed.

 

Top gold IRA Companies Have 4 Major Factors to Evaluate

Transparency: Making sure all costs are known upfront is a must when choosing the best gold IRA rollover company.  

Flexibility: There is no one-size-fits-all approach to investing. Each investor has different needs and goals. Make sure you choose the best precious metals IRA custodian that will cater to you.

Qualifications: Top companies will have appropriate and required licenses, insurance, and bonds to protect your investment. 

Reputation: A reputable custodian will have a track record verified by objective third parties such as: 

Gold IRA Rollover Reviews

After researching hundreds of reviews across multiple third-party authoritative review sites such as Trust Pilot, Better Business Bureau, Consumer Affairs, and Google Reviews, our list of best goldIRA custodians was compiled based on these consistent qualities highlighted in customer reviews. After their seamless Gold IRA rollover, they had this to say:

“The details of the transaction were explained and everything was handled in a professional and timely way.” – BBB Customer Review

“As a novice investor, I feel very fortunate to have chosen to invest with this company. All of the staff made what could have been a very stressful experience, into an easy process. This is the kind of company that everyone would choose to experience; knowledgeable and trustworthy; where the honesty shines through.” – BBB Customer Review

“They speak very intelligently and answered our questions thoroughly. We feel very confident in making the decision to invest.” – BBB Customer Review

“I've been buying precious metals since 2016 and have been extremely pleased with their service. They always process the paperwork quickly and efficiently.” – BBB Customer Review

Best Gold IRA Companies  

Goldco

Pros:

  • Goldco specializes in Precious Metals-backed Individual Retirement Accounts
  • The company has over a decade of experience 
  • Has an A+ rating from the Better Business Bureau with a 4.73 out of 5 stars

Cons:

  • Any existing precious metals you own cannot be added to your Goldco transaction. Any assets you add must be purchased through Goldco.


Augusta

  • Simple process and well-executed educational materials for the investor.
  • Doesn’t charge investment management fees

Cons:

  • High investment minimums. Ex: $50,000 in savings minimum
  • Doesn’t offer platinum or palladium bullion only gold and silver

Birch

Pros:

  • Great customer service
  • A+ ratings with third party review sites. Ex: Better Business Bureau

Cons:

  • USA deposits only


Regal Assets

Pros:

  • Over a decade of experience- specializing in Gold IRA Rollovers
  • IRA Rollovers and transfers incur zero fees

Cons:

  • Of you like to conduct business online to make purchases, this is not an option.

Noble Gold

Pros:

  • Flat storage and service fees
  • Reasonably low minimum investment

Cons:

  • Depending on your account balance, the annual fees can be high if you have a low account balance