Financial, legal and tax experts often suggest diversifying retirement savings by including physical precious metals in them – as this provides diversification when prices for other assets plummet.
To get started, contact a gold IRA company and ask them to facilitate a direct rollover according to IRS regulations. This involves an administrator-to-administrator transfer within 60 days to avoid penalties.
Eligibility
Rollovers of an IRA may take two forms. Direct rollovers occur when funds from an employer plan distribution are sent directly from its administrator to a gold IRA custodian without investor control or custody; instead, this custodian takes possession of them for safekeeping purposes. Conversely, indirect rollovers involve moving funds between accounts by redirecting an IRA account towards another investment account.
No matter if it is direct or indirect rollover, it is critical that all necessary paperwork is in order. Furthermore, you’ll need to carefully consider both the benefits and drawbacks of investing in precious metals IRAs while considering your financial goals – something a certified financial planner can assist with by offering ideas about how best to incorporate precious metals IRAs into your retirement strategy.
No matter your method for moving money, it is wise to act promptly in order to avoid penalties. For instance, the IRS could view failure to redeposit your 401(k) balance within 60 days as early withdrawal and tax it accordingly. In addition, when conducting direct rollovers make sure any scheduled employer contributions don’t appear before closing your old account.
Taxes
Rollovering 401k funds to gold IRAs may help diversify your retirement savings portfolio, but taxes still need to be paid on any such transfer. Unless exempted under one of the IRS’ hardship provisions, income tax must be withheld from both years that follow from this transition.
Direct IRA rollover is often the best and simplest choice, in which your current 401k trustee sends funds directly into a Gold IRA custodian without withdrawing them or incurring tax liability – usually this process can be finished within several weeks.
Another option for indirect IRA rollover is through indirect distribution, where your 401k plan trustee disburses 80% of your withdrawal amount withholding 20% for potential tax liabilities, with 60 days left for you to deposit it into a Gold IRA – otherwise it becomes taxable withdrawal. It can be more complex, however; coordination must occur with both custodian and Gold IRA company as it needs to happen correctly; Birch Gold Group offers competitive pricing as well as superior customer service for this process – we recommend working with them as we can assist both during setup as well as transfer.
Direct rollover
Direct Rollover is the easiest and simplest way to transfer funds from your 401k into a Gold IRA, whereby your trustee transfers them directly into the custodian of your new IRA account. Doing this also avoids incurring the 10% early distribution penalty that’s typically levied.
Your 401k trustee will issue you with a check that must be cashed within 60 days of withdrawing, otherwise additional taxes and penalties will apply on what’s left over.
Your IRA custodian may offer an incentive for switching platforms – an extra bonus could make switching an irresistible proposition! Switch now for greater options for your retirement savings account!
If you want to diversify your investment portfolio and add assets that don’t track closely with the economy or stock market, a Gold IRA might be right for you. We can assist in opening one with Augusta; our dedicated team are on hand 24/7 for any inquiries about it or the process in general. Reach out today or download our helpful Precious Metals IRA Information Kit as starting points.
