There are many different ways to save up for retirement in the United States, the most common of which is a 401(K) plan. With all of these options though there are a lot of questions, chief amongst them is which decisions are smart decisions. The answer is, it depends on who you are and how much you plan to invest.
A general rule of thumb for all investments though is that you never want to have all of your eggs in one basket. If all of your investments go into the same place and something should happen such as a market crash, you will be left with nothing to fund your retirement. No method of planning for retirement is fool proof.
Gold IRA Rollover Benefits
|1||Effective Protection against inflation and stock market losses|
|2||Tax free until you start taking your withdrawals|
|3||Having a buy back guarantee is a good insurance|
|4||Gold IRAs are self-directed which means that they are NOT controlled by an employer|
|5||gold IRAs don't require a lot of maintenance|
Gold IRAs are very similar to a standard IRAs except for the fact that you invest in gold instead of paper money or stocks. The term gold IRA rollover refers to the fact that you move part or all of another form of retirement funding into a gold IRA account. Here are the different retirement plans that you can rollover into a gold IRA:
- 401 (k) Retirement Plans
- 401 (a) Retirement Plans
- 403 (b) Retirement Plans
- 457 Plans
- Simplified Employee Pension (SEP) Plans
- Thrift Savings Plans
- Traditional IRAs
- Gold IRAs
Now you may be thinking, gold is a precious metal that hasn’t been used as a primary currency for years is investing in it a smart decision? Let’s review some of the details about gold IRAs and gold so that you can make an informed decision about whether a gold IRA rollover is smart decision for you or not.
The term Gold IRA is used to refer to precious metal IRAs of all kinds. Because gold is the most common metal invested in when someone starts a precious metal IRA it has become the standard term used. There are, in fact, several other metals in which you can choose to invest:
Each one of these metals has a requirement on how pure it must be. The government doesn’t want people investing in just any purity of metal. Here are the purity levels required for each metal.
- Gold: .995
- Silver: .999
- Platinum: .9995
- Palladium: .9995
You can of course invest in purer metals but that brings up other problems down the road. We will discuss those later when it comes to discussing storage. For the most part this article will be discussing gold from here on out.
What Kind of Gold Can I Invest In?
Just like the fact that the government controls what purity the metals that your IRA can include they regulate what form that metal is in. There are several different forms of gold that can be invested in with gold IRA rollovers.
Approved Gold Coins:
- Gold American Buffalo
- American Gold Eagle Proof Coins
- American Gold Eagle Bullion Coins
- Canadian Gold Maple Leaf Coins
- Austrian Gold Philharmonic Coins
- Australian Kangaroo/Nugget Coins
- Gold Bullion/Bars
Many people wonder if you can use gold jewelry as part of your gold IRA. This is not possible for two reasons. First, gold jewelry is something that is sold openly with very little to no certificates. Second, the purity of jewelry is often not high and jewelry contains other metals and gems that would offset said purity. Gold coins not listed above and gold scraps are also not accepted for gold IRAs or gold IRA rollovers.
How is It Stored?
Many people wonder where they would store their gold for a gold IRA. They don’t want to have to pay to store the gold but at the same time they don’t want to risk storing it at home.
Gold is stored by certified custodians also known as gold IRA companies. Gold IRA companies keep you gold safe by securing it in vaults and keep records. The government requires you to store gold with with a certified custodian when you have a gold IRA.
The government doesn’t let you store most gold IRAs at home for the fact that most insurance companies won’t insure gold that is in your house because it is of too high a value. Additionally, IRAs are controlled by the government and if you kept the gold at home they would not have a way to exert control over the account. Neither would the gold IRA rollover company that is sponsoring your account.
The lowest quality gold, .995, that you can get for a gold IRA is fairly durable. There are still other metals and impurities that make the metal resilient enough to be stored in most conditions. Gold with higher purity, around .9999, has too much gold in it to be stored in a standard vault. It is highly recommended that you store high purity gold in a climate controlled vault. This is something you must consider both when selecting the gold and selecting the custodian.
Gold IRA Rollover Companies
When you go to setup a gold IRA there will be two different companies that you will have to deal with, a custodian and a dealer. Both of these companies play important parts in getting a gold IRA. There are a lot of companies to choose from, some legitimate, some not. Make sure to research any gold IRA company that you plan to do business with. Don’t just select the first option that you see.
A gold dealer is a gold IRA company that sells gold that is up to par for gold IRA investments. The sole job of a dealer is to sell you the gold and to transfer it to the custodian. When starting a gold IRA the dealer should arrange the transfer of the gold and unless your custodian signs off on it you should never take custody of the gold.
The custodian for your gold IRA, as we mentioned earlier, is the party that stores the gold. This party will operate safes and/or other storage facilities that will keep your gold secure. In almost all cases custodians are insured and will protect your gold from almost anything. A custodian is where you should start when it comes to looking for a gold IRA rollover company. Custodians have links with dealers so that the process will be smooth and with as few delays as possible. If you start with a dealer they tend to have delays and other issues.
Gold trends are what make gold a possible smart decision. Gold has been an accepted currency in many countries for ages. In fact, gold is one of the oldest forms of currency in the world. No matter the flow of paper money or stock investments gold has not traveled far below a standard price. In fact, gold has a trend of increasing in value when all other investments are at their lowest. This means that gold is a great investment to secure your financial wellbeing during tough times.
The long history behind gold of being used as a currency indicates that it would be still valuable as a currency if all other methods of payment fail. However, should that happen you would need to be able to get your hands on the gold.
There is also a limited amount of gold, which helps to fuel gold trends. The more demand there is for gold the higher its value. More and more recently there has been a demand for gold due to the unstable nature of the global economy. Financial issues such as Greece almost defaulting on their debt help to drive up the value of gold. The same goes for times of political uncertainty when people don’t trust the president or other political leaders, they want to secure their assets should something happen.
There are a lot of different fees that you can find from a gold IRA company. Fees will help you gauge the general nature of the company but shouldn’t be the end all to why you pick a gold company. Make sure that when you are looking into a company and considering an IRA you ask for a complete fee schedule. Here are some of the fees that you will find on the account.
Establishment fees are those that are charged when you first open up an account with a gold IRA company. They typically are around $50 no matter what kind of balance you are going to start with. However, more sketchy companies might increase this fee to try and get extra income.
In order to get your gold you are going to have to pay shipping or transport fees. In most cases it will be shipping fees as most dealers and custodians aren’t close enough to justify a transfer via armored car. Remember that gold is heavy so the shipping costs probably won’t be low, plus you will want to insure every piece of gold that you ship. The last thing you want is something to happen to the gold in transit.
If you don’t feel the shipping fees are right, contact other dealers and ask what their shipping is on average. You can also call the shipping company and ask for a quote directly.
The maintenance fee from your gold IRA rollover company is used to pay for all of the upkeep of your account such as keeping the books and providing you with access to an online account. These fees range but usually start at around $50-$75. Additionally, these fees can change depending on the value of the gold in your account.
As we already discussed gold must be stored by a custodian, the storage fee is to cover the physical cost of holding the gold for you. These fees can vary greatly because of the different levels of storage and types of storage.
Flat Rate Fees
There are two major ways that fees are assessed: flat rate or based off the value of the gold in your account. The fees when they are based off the value of the gold in your account can sky rocket. They can also increase greatly if you decide to add more gold to your account. Not having flat rate fees may be a deciding factor in which gold IRA company you go with.
Multiple Investment/Multiple Metal Fees
If you have multiple retirement funds linked to one account or multiple precious metals in one account you will have extra fees to maintain the multiple sources. The exact amount of this fee depends on the funds and/or metals that you are storing in the account. Some companies will also combine and/or increase the storage fees.
Occasionally you will encounter other fees when it comes to starting up the account. These fees can include: processing fees (from the dealer), transfer fees (from the dealer), and more. Most of the extra fees are not necessary and if you shop around you should be able to find options that do not have massive fees. Fees like the processing and transfer fees can usually be waved if no other alternative can be found.
United States Debt Issues
There have long been concerns that the United States debt issues will cause the country to take IRAs that are backed by mutual funds and similar assets in order to pay off the debt. When you have an IRA that is secured in gold or silver there is much less of a risk of that. Mutual funds are easier for the government to take control of.
Precious metals are hedged from the economy because they aren’t specific to the United States. Other countries recognize gold as a currency and most people recognize it as a precious item. This means that no matter what your gold will hold its value whether its in the United States or another country.
In fact, the debt issues in the United States is one of the reasons gold has seen its recent rise in popularity. People are unsure of where the economy, and the country as a whole, is going.
- As with any investment plans there is a lot to consider when you are looking at getting a gold IRA or a gold IRA rollover. For most people investing in a small amount of gold to help their retirement funding is a great idea. If you can afford to do it you will have your financial situation as safeguarded as possible should anything happen to the economy.
- The final decision as to whether or not a gold IRA is a smart decision for you must rest solely in your hands. However, if you are still unsure you can continue to read more content on gold IRA rollovers, or you can seek advice from a financial consultant. If your are looking for a complete overview of the whole gold IRA rollover process and a step by step gold IRA rollover guide, we highly recommend you to fill out the form below to request your free gold IRA investment kit from Regal Assets (one of our top 3 recommended gold IRA rollover companies). Please note this is a time limited offer that includes free shipping to your physical address.
- Whatever your choice, good luck on your future investments.