Although it seems like there’s a lot of jargon associated with making the move, with a little bit of know-how and the help of a company besides, going from a 401(k) to a silver IRA might be easier than you think.
Since gold and silver react differently to the market than the mutual funds and equities typically provided by employers, bullions can bring balance to your portfolio. The bullish trend of these precious metals has left people rushing to increase their exposure to gold and silver. Do you have a 401 (k) retirement account? If your answer to that question is “yes”, you may be able to add gold and silver bullions to your portfolio with ease.
Converting Your 401(k)
The right strategy for converting your 401 (k) into a gold 401(k) or a silver 401(k) is ultimately dictated by your circumstances.
Is This a Former Employer?
If you’re no longer at the company your 401(k) is from, then a Traditional IRA will do the trick. Just wait for the funds to be deposited and then purchase the silver or gold. More on this in the Harvard Silver IRA Training. Click Here, to get this FREE training
Consider an In-Service Distribution
Even if the company offering your 401(k) is still your employer, a rollover may still be possible via “in-service distributions”. With this approach, you have 60 days to place the funds into a self-directed IRA without facing tax penalties.
Negotiate With Your Employer
In the event that your company doesn’t allow for in-service distribution, your next option is to sit down with your employer and ask for the addition of gold or silver to your plan.
How Gold 401(k)s and Silver 401(k)s Put Owners In the Driver’s Seat
Decision-makers also benefit from the use of silver 401(k) and gold 401(k) plans. Employees and company owners alike have the option of rolling any current funds directly into the new precious metals-based plan.
What Is an IRA Anyway? And Silver IRA?
IRA stands for “Individual Retirement Account”. When silver or precious metals are mentioned within the context of IRAs, it means that the account deals in bullion as opposed to stock shares or fiat currency. Generally, a precious metals IRA will also be a self-directed IRA simply because the flexibility of being self-directed allows for greater portfolio diversity. That being said, there are other accounts that do the same level of work.
Individual Retirement Accounts are allowed a total of four precious metal types:
Subject to the approval of the IRS with respect to form, these coins and bars are allowed for IRAs. Although it seems like any IRA with precious metals is called a “gold IRA”, don’t be surprised to hear terms like “Palladium IRA” and “Silver IRA” being thrown around to more accurately describe a portfolio.
Why Gold and Silver?
Truthfully, the appeal of precious metals to investors is in their ability to protect a portfolio from inflation over the long haul. Creating a precious metal IRA involves transferring funds from the old retirement plan in accordance with the regulations set out by the IRS. Once that is done, the investor has the option of storing the newly formed tax free silver or gold IRA in a depository. The choice from there is between having the bullion physically shipped versus taking the value of the precious metal for cash. Learn more on Silver IRA as part of Harvard Silver IRA Training. Click Here, to get this FREE training
A Quick History Lesson
The success of gold IRAs can be traced directly back to the Taxpayer Relief Act of 1997, which was an act of legislation that served to allow a wider range of investments in IRAs.
Even so, the IRS continues to approve the metals investors can use in an IRA.
The Benefits and Disadvantages
There are pros and cons to storing silver in either bar or coin form. Coins are easier to store but it’s not unusual for unscrupulous dealers to take advantage of customers and selling unapproved coins instead of the bullion that was promised. At the same time, bars are significantly more expensive to ship and buy.
Logistics aside, however, the ability of silver bars and coins to accurately reflect the value of silver makes them a sound investment option.
Approved Silver Assets
Canadian Silver Maple Leaf coins
Australian Silver Kookaburra coins
Silver bars and rounds that were produced via government mint or at a refinery approved by NYMEX or COMEX
Austrian Silver Philharmonic coins
American Silver Eagle bullion coins
Chinese Silver Panda coins
American Silver Eagle proof coins
Mexican Libertad coins
Getting Those Distributions
Interestingly enough, the rules for taking distributions from a precious metals IRA and a normal IRA are exactly the same. The owner can opt to have possession but also has the option of liquidating the metals and taking the cash value. Just keep in mind that the IRS taxes both approaches as IRA distributions. You can learn everything about distribution in the Harvard Gold and economy training. Enrol today, it’s FREE. Click here
Storing a Gold or Silver IRA
In order to stay on the good side of the IRS, it’s worth noting that all IRAs need to be under the care of a custodian or trustee. Gold and precious metals IRAs are no exception to this general rule. The good news, however, is that as long as the custodian is a savings and loan association, a bank, a credit union, or otherwise IRS-approved, the arrangement should be in the clear.
As for the nitty-gritty aspects of storage, most trustees use depositories that are private and approved by exchanges. The reason for this is because of the enhanced security features. Measures taken by these depositories include motion and sound detectors, around the clock guarding, and specialized locks among other approaches.
Generally, depositories will store precious metals in one of two ways: segregated and non-segregated. What these terms basically mean is that once at the facility, the assets will either be pooled with others (non-segregated) or kept separately (segregated). In Module One of Harvard Gold and Silver Investing training you will learn about
Frequently Asked Questions
Question: Is purchasing physical gold for my 401(k) or IRA an option?
Answer: With the support of an established company, purchasing gold or silver coins and bullion for the purpose of placing the precious metals into a 401(k) or an IRA is more than possible. Look at this way. More often than not, most people on conventional retirement plans are typically with a firm or bank that deals in mutual funds, bank deposits, and stocks among other financial assets. In these circumstances, despite ultimately being the one who has to live off of the portfolio, the individual has practically no decision-making power when it comes to these investments. With a self-directed IRA, you have the ability to explore your options as an investor. Precious metals are just the tip of the iceberg. Learn the five Key factors to select IRA custodian as part of our thorough gold training. Enrol here
Question: Is it possible to rollover funds from the 401(k) or IRA I’m currently on?
Answer: Absolutely. It’s worth pointing out here that probably the majority of precious metal-based plans are initiated by a rollover. Under current regulations, it isn’t just IRAs that allow for rollovers, but also 401(a), 401(k), and a host of other annuities doing the trick. Look for a combination of know-how and hands-on experience that our custodians have when it comes to handling rollovers. Simply because of the costs associated with managing, storing, and insuring the gold or silver, you generally want to wait until the underlying precious metal is trading higher to rollover your funds. At the outset, it takes time to build up a precious metal IRA.
Question: Is purchasing silver and putting it in my 401(k) or IRA a good idea?
Answer: Whether you’re retiring or merely balancing your portfolio a little bit, the purpose of buying gold is to protect your assets. Every time you turn on the news, you’re treated to a report on a wasteful bill that was just approved by congress, you hear about Federal Reserve policies that leave conservative spenders feeling uneasy, and entire segments that point to economic unrest in the near future. If for no reason than for peace of mind, investors who aren’t into risk-taking have every reason to make gold a part of their retirement plans. As an asset that always retains value, this is a uniquely good fit.
Question: Is there a difference between a self-directed 401(k) or IRA and the retirement plan I’m currently on?
Answer: As far as IRS and the law are concerned, the rules and regulations you would expect to see with regular IRAs are the same when you move into self-directed plans. However, the key difference is that a conventional IRA doesn’t allow the individual investor to opt for physical gold. The expenses and precautions that have to be taken with gold in particular are difficult to overcome. Consequently, if you’ve got your heart set on the physical ownership of a precious metal, you’ll probably have to open a self-directed IRA with a trustee or custodian who is accustomed to handling such plans. Once the funds have been rolled over into the new account, the individual is then able to initiate transactions with the help of a trustee.
Question: I don’t have a trustee or a custodian. What Shall I do?
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Question: What exactly does the trustee do when it comes to my self-directed IRA?
Answer: The trustee who looks after a self-directed IRA doesn’t give any investment advice. Rather, they provide reporting and administrative support while working with bullion providers. As always, double-check the costs before signing on to anything.
Question: Does the vendor make a difference with respect to the rollover?
Answer: Believe it or not, the company you buy gold from can make or break your portfolio. Depending on the particular vendor you choose, it’s even possible to find your goal of hedging your assets undermined. The simple reality that there are firms that market their products as “gold bullion” when in reality they may be selling shares, futures, and other financial instruments that are more speculative than what you’re prepared for. In addition, many minted coins are sold at such high prices that the costs may not be recoverable when all is said and done. This is just a small taste of the potential pitfalls that investors have to negotiate.
Question: So there are good and bad firms selling gold and silver. How does a regular person differentiate?
Answer: Ever heard of how “prevention is worth a pound of cure”? In the case of purchasing gold with an eye towards a stable long-term retirement plan, it all starts with research. Start with the Better Business Bureau to get a sense of what you’re up against with a company. If you go online only to be greeted with a stream of complaints, questions, and transparent reputation management that serves to pepper over these shenanigans, you have your answer where that particular company is concerned. Assuming the company’s online reputation checks out, the next thing to look for is a proven track record. Put simply, the longer the firm’s been in business, the more trustworthy they probably are. Finally, opt for a company that has your best interests at heart. If instead of reasonable answers to your questions, you’re being steered into a transaction that’s even more expensive than planned, you might have to find another vendor.
Even when the reasons to pursue a 401k to silver IRA rollover are all laid out, it goes without saying that going from a conventional retirement plan to a self-directed one is a substantial change. That’s why it’s so important to make sure that you’re working with the right company.
There’s no need to go into your retirement hoping and praying that you’ll have enough to scrape by. For those who are still a few years away from drawing a pension, you don’t have to spend sleepless nights wondering what will happen to you. Imagine a living situation where news of Congress’s latest questionable budget no longer affects you quite the same way. Picture yourself being able to shrug off concerns about “whether you have enough” with confidence.
That’s what a self-directed precious metal IRA can do for you.
If you like to learn more about silver IRA investing and take your knowledge to the next level. The Harvard Silver Team teamed up with the Harvard Gold team to put together the ultimate Precious metal investment training currently on the web to teach you about the investment and Silver ira. It is available for FREE to our readers.
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