Gold IRA Rollover Guide – How to Execute 401(k) Rollovers to Gold

Learn how to use your existing retirement savings account to invest in precious metals like gold and silver.

The Truth about a Gold IRA Rollover

The process known as a gold IRA rollover makes it possible to move funds from your 401(k) account into a precious metals IRA. This IRA makes it possible to purchase physical precious metals as a retirement investment. You’ll have a chance to buy bullion bars or coins and keep them safely secure in an IRS approved depository.

The Difference between a Gold IRA Rollover vs. Gold Transfer

When it’s time to move your money to invest in physical precious metals, there are two valid opportunities to accomplish this task. They are known as a rollover or transfer.

An IRA transfer happens when the account holder moves their funds from one IRA account to another. Example: moving money from a traditional IRA to a self-directed IRA account.

A gold IRA rollover happens when the account holder has their custodian move money from one retirement account to another. Example: moving money from a 401(k) into a gold IRA.

A Complete Breakdown of the Gold IRA Rollover Process

Walk through the entire gold IRA rollover process following these steps:

Step #1: Choose the Best Gold IRA Provider

Finding the right Gold IRA company is an absolute must. This company will help you pick the best custodian to meet your needs and also connect you with an IRS approved secure depository. They also help their customers choose the right IRS approved precious metals for their retirement account.

Try to discover a provider that has an amazing track record for providing excellent service. You also want a precious metals company that has specialized knowledge in this area and a streamlined investing process.

This company is going to help you get your account set up and work with you every step of the way from initiating a rollover or transfer, choosing your investments wisely, and even funding your gold IRA account. Top companies in this field provide tremendous support before and after you open your account.

Step #2: Picking the Right IRA Custodian

As a gold IRA investor, it’s against the rules to purchase precious metals for this account and keep them stored at home or in a safety deposit box of your choosing. Your custodian is responsible for all of the administrative tasks as well, because it’s against the rules for you to handle them. They are responsible for funds transfers, account maintenance, and more.

The gold company you choose will recommend their top IRA custodian to work on your behalf. As an example, Augusta Precious Metals recommends using a company named Equity Trust as their gold IRA custodian of choice.

Step #3: The Depository Receives Delivery of Your Precious Metals

After your precious metals IRA account is fully funded and you’ve chosen your custodian, you can begin picking precious metals. From here, after you purchase these precious metals, your gold IRA company will arrange to have the metals shipped directly to your secure depository.

Make sure to do business with a precious metals IRA company that pays for insurance and shipping for delivery of your precious metals. This will cut down on costs and help them lower the overall fees and expenses that you pay as an physical gold IRA account holder.

Step #4: Have Your Precious Metals Stored in Your Depository

Once your precious metals are shipped to your depository of choice, you have the option to choose segregated or commingled storage. 

Many investors prefer segregated storage because their gold IRA investments are safely secured in a vault all their own. This vault isn’t shared with any other investor.

Or, you might prefer commingled storage. This puts your investments in a vault shared by other precious metals account holders. Your gold and silver are safely stored and secured in this account shared with other people.

The entire rollover process is complete once you’ve purchased and safely secured and stored your precious metals.

Selecting Bullion Bars and Coins with Precious Metals IRA Approval

The IRS has very strict rules and standards in place for purchasing gold and silver assets for precious metals IRA accounts. The types of silver and gold coins and bars allowed in this account include many of the following options:

  • Gold American Eagle coins
  • Silver American Eagle coins
  • Gold Valcambi Combibars
  • Silver Canadian Maple leaf coins
  • Gold Canadian Maple leaf coins
  • Gold Johnson Matthey bars
  • Credit Suisse Gold bars
  • and many others

Collectible coins are also allowed in gold IRAs as long as they follow strict and specific rules. They must be minted in a sovereign state, they must have a bank or non-bank trustee, or they must be described under 31 USC Section 5112 standard.

IRA account holders are not allowed to invest in precious metals assets that do not meet the strict approval of the IRS. They will suffer certain penalties and fines if they purchase the wrong assets. To prevent making this mistake, it’s always best to choose a silver and gold provider with years of experience that can recommend the best eligible choices.

Gold IRA Rollover Eligible Account Types

There are a few account types that remain eligible for a gold IRA rollover. These account types include:

  • Roth or traditional IRAs
  • employer-sponsored 401(k)
  • self-directed 401(k)
  • TSP
  • 457(b)
  • 403(b)

For those with an employer-sponsored account, a gold IRA rollover is typically only possible once you’ve been terminated by her employer. It’s possible that you can initiate a partial rollover and still remain employed as long as you reach 59 ½ years old and make the request to your account custodian.

Certain stipulations exist but you must contact your employer and the company handling their retirement account investments. Speak directly to a member of human resources to determine if a partial rollover agreement is currently in place.

Or if you prefer, you can contact the investment company directly to learn about your options.

FAQs Section: Gold IRA Rollovers

What Happens during a Gold IRA Rollover?

In a nutshell, the goal of a rollover is to move funds from one retirement account to another retirement account. The entire process must be completed within 60 days to avoid paying penalties or early withdrawal taxes.

If the entire process takes longer than 60 days, it’s like taking a distribution from your retirement account. Please keep this in mind if you were to initiate a gold IRA rollover. Financial experts always recommend performing a direct rollover as opposed to an indirect rollover.

In your new precious metals IRA account, you have the opportunity to buy a wide array of physical precious metals, but they must meet strict IRS standards. Purchasing ETFs is also allowed and it isn’t recommended.

Remember the withdrawal requirements for indirect rollovers and keep them in mind. You are at risk for early distribution taxes and penalties.

What Are the Gold IRA Rules from the IRS?

The IRS has specific gold IRA rules and regulations that you can learn more about from your custodian. Or, if you connect with a gold IRA provider like Augusta Precious Metals, they’ll connect you with educational materials that focus on answering important questions about the rules that investors need to follow.

More importantly, the main rule for self-directed IRAs is that you must have a custodian administer the account, which is true for all types of IRAs.

As the account holder, you aren’t allowed to buy precious metals using IRA funds. The custodian must directly send a check from your account to the gold company and purchased the precious metals on your behalf.

After these metals are obtained, the custodian must ask the gold company to ship them directly to your secure depository.

From here, the storage company will add the precious metals to your inventory and keep them safe for future liquidation or distribution.

What Are the Gold IRA Rollover Rules from the IRS?

Per the Internal Revenue Service, if you begin an indirect rollover from your employer, you must receive the funds and complete the deposit within 60 days of their receipt or pay penalties.

Nevertheless, if you avoid an indirect trustee to trustee transfer, you’ll pay a mandatory 20% federal tax withholding for the distribution. There is no mandatory IRA distribution federal tax withholding.

If you do not complete the rollover within the allotted time frame, the money becomes taxable and the recipient will pay a 10% early withdrawal penalty if they are below 59 ½ years old.

What Are the Gold IRA Transfer Rules from the IRS?

The easiest, fastest, and safest way to move funds from an employer sponsored plan into an IRA is via direct trustee to trustee transfer. By initiating a transfer, the account holder has nothing to worry about as far as meeting the restrictions of the 60-day time frame. This restriction is imposed on indirect rollovers, but you will not incur any type of penalty whatsoever from the IRS as long as the account custodians handle the transfer on your behalf.

Typically, when a transfer takes place it is performed via wire transfer and the funds are moved from one account to the other on the same. Or, if the custodian doesn’t perform wire transfers, they can send a check to the new gold IRA account custodian as an alternative.

As mentioned, the safest and easiest way to move money from one account to the other is via transfer. Plus, when the professionals handle this type of movement and keep your involvement out, it’s easier for you and the transaction automatically receives approval.

What Are the Gold IRA Rollover Fees?

Typical fees include an application fee, an account setup fee, an administration fee from the IRA custodian, and annual storage and custodian fees as well.

Each service provider is going to charge different fees depending on their price structure. Typically, custodians charge $80 per year for administration. And commingled storage costs $100 a year while segregated storage costs $150 per year on average.

Generally speaking, the new gold IRA account holder will not have to pay transfer or rollover fees to move their money from one retirement account to another. If the custodian says that fees are involved, you should question them thoroughly because this isn’t normal.

What Happens during an Indirect 401(k) to Gold IRA Rollover?

First of all, the funds being transferred will be removed from the account and the 401(k) administrator will also take out the requisite 20% federal tax withholding. If you plan on rolling over the full amount, you must provide other funds to make up the difference. That’s why many people often find a direct rollover or transfer as the preferable option.

Regardless, once the distribution is received, you are given 60 days to deposit the money with the new custodian of your gold IRA account. If you fail to deposit this money within 60 days, the money becomes taxable income. And if you are younger than 59 ½ years old, you’ll also pay a 10% early withdrawal penalty plus taxes on the income.

What Types of Physical Precious Metals Are Allowed in a Gold IRA?

Generally speaking, the IRS has very strict rules regarding gold and other precious metals allowed in this account.

They must meet specific purity levels and come from a recognized public entity as their official currency.

The purity standards include:

  • 99.5% pure for gold investments
  • 99.9% pure for silver investments
  • 99.99% pure for platinum investments
  • 99.99% pure for palladium investments

Common precious metals purchased in these encounters include Canadian Maple Leaf coins, Austrian Philharmonic coins, American Buffalo coins, and American Eagle coins.

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