The global economy has experienced severe instability due to the coronavirus pandemic. Because of this, many retirement investors have resorted to searching for alternative ways to diversify their retirement savings by choosing assets not directly tied to the economy. One such example is gold, which is often considered an excellent hedge against inflation, market volatility, economic uncertainty, and currency debasement.
If you’re considering switching a part of your IRA to gold in a process known as gold IRA rollover, look no further. Here’s a step-by-step guide detailing the process you should follow throughout this process.
What’s A Gold IRA Rollover?
A gold IRA rollover refers to the process of converting a portion of your retirement investment portfolio or account, be it Roth IRA or 401(k), to a Self-Directed IRA holding gold bars or coins. This process usually involves withdrawing funds from your current account and redepositing it into your gold IRA within 60 days under a new administrator or custodian.
Steps To Follow When Converting IRA Into A Gold IRA
Despite common misconceptions, the process of converting your retirement portfolio into a gold IRA is relatively straightforward. And to prove this, here’s an overview of the steps to follow:
1.Choose A Self-Directed IRA Custodian
The rollover process of an IRA to gold starts with choosing a self-directed account trustee. You shouldn’t rush through this process, as many IRA custodians restrict you to only buying conventional investments such as stocks. However, self-directed account trustees give you the freedom to pick other investments that qualify for the Internal Service rules, such as silver, gold, and other precious metals. And to ensure you pick out a reliable custodian, research in detail the experience of other customers. For instance, you can read Goldco reviews.
When switching to a gold IRA, you should start by creating an account with a custodian who accepts holding precious metals. The custodian also needs to offer storage services because you aren’t permitted by law to physically possess the gold in your IRA.
2.Reach Out To Your Current IRA Account Administrator
After choosing your preferred custodian and filling out all the paperwork, the next thing to do is to contact your existing account administrator about your wish to transfer your money. They’ll follow this up by sending paperwork with questions you need to answer such as how much money you want to transfer and your new account details. Subsequently, money will be transferred into your IRA account.
Once you’ve received the money, it’s best to deposit it into your self-directed account 60 days after getting the funds. Keep in mind that the IRS will deem the transfer tax-free if it reaches your new account within the 60-day timeframe.
3.Choose The Gold You Wish To Buy
Now that you have your funds in your self-directed account, the next step you should take is to begin shopping for gold. As you do this, it’s crucial to ensure the gold coins or bars meet specific eligibility requirements, such as being in the form of non-collectible coins like Gold American Eagle, being IRS-approved, and having a purity of 99.5%.
When buying gold for your self-directed gold IRA, make sure to get in touch with your custodian to instruct them to go ahead and pay for the gold using the money in your account.
4.Give Your Gold IRA Custodian The Permission To Proceed With The Purchase
This step is where your custodian will pay the precious metal dealer once you’ve made up your mind about the purchase and agreed on a price. After receiving the funds, the gold will immediately be shipped to your custodian for storage. You shouldn’t just assume that the gold has safely arrived at the storage facility. Instead, constantly communicate with your custodian and dealer. In addition, get a receipt and store it safely in case you’ll need it in the future.
During this step, you need to be wary of custodians who argue it’s acceptable to store the physical gold at home as this isn’t safe and exposes you to possible IRS penalties.
5.Constantly Check Your Holdings’ Account Statements
Once the gold IRA rollover has been successfully completed and there’s confirmation that the first purchase is safe, always check your custodian’s statements of your investments and holdings regularly. This is vital to ensure you’re up-to-date with your account’s balance at all times. Therefore, you’ll know whether to sell or add more gold into your account according to the prevailing market conditions as you await retirement.
Contrary to common opinion, rolling over your IRA to gold or other precious metal isn’t time-consuming, complicated, and expensive. If you needed further convincing, this detailed post should’ve done precisely that by outlining the steps to follow during this process. Consequently, you’ll enjoy peace of mind knowing that your retirement savings are safer since the gold IRA isn’t closely linked to the economy or stock market.