How To Convert Your IRA To Physical Gold
by Mashum Mollah Investing 22 July 2020
A Guide To Converting Your Traditional IRA To Physical Gold
The world is currently progressing through a period of chaos. During these times, it’s natural to seek safe and reliable retirement options. You may no longer feel secure using hat traditional IRA that relies on stocks and bonds. Gold, on the other hand, remains as reliable as ever. Its value continues to increase over time and is considered one of the safest investments in the world.
First, it’s important to note that your traditional IRA might offer you the possibility of investing in precious metals without physically owning them. For example, you may be able to invest in paper equivalents or stocks in a gold mining company. These can certainly be lucrative investments but they are not the same as investing in physical gold and they do not possess the same level of security.
You Need A Self-Directed IRA
A self-directed IRA is a variation of a traditional IRA and has all of the same tax-advantages and contribution limits. The major difference between a standard IRA and a self-directed IRA is the difference in assets that can be owned. A traditional or Roth IRA is only going to allow you to invest in mutual funds, stocks, and other standard investment options. These are the types of investments you are trying to avoid during troubling times.
In comparison, a self-directed IRA allows for significantly more freedom. Many people use them when they want to invest in privately held companies or real estate. And, of course, they are the best option if you want to convert your IRA to physical gold. It’s the only option that gives you complete control over your retirement and your investment assets.
As with a traditional IRA, you will need a custodian or broker to hold the account. Many of the major brokers that you may be familiar with do not offer any form of self-directed IRA because it’s more work on their behalf. Instead, self-directed IRAs are most often provided by brokers that specialize in specific types of investments. They may limit their self-directed IRAs to those types of investments or assets.
Thus, if you want to convert your IRA to physical gold, then the first step is finding a reputable broker that specializes in gold or precious metals. There are plenty of these on the market with strong reputations and powerful incentives. Research your options, choose a broker who specializes in gold and offer self-directed IRAs, and then you can move on to the next step.
Rolling Over Your Existing IRA
A rollover is a special type of transaction that allows the transfer of assets from one type of traditional IRA to another. These transactions generally happen between two different financial organizations, though it is possible to remain within the same organization if both accounts are held there. The account holder; however, should not receive any money during this transaction. The check is made from one custodian to another.
The IRS does not withhold any funds or force any additional taxes as long as the rollover occurs within 60 days. Likewise, if the IRA account holder received any funds during this transaction, then reporting and taxes will need to take place.
Investing In Physical Gold
With your assets now in a self-directed IRA, you can begin investing your hard-earned savings into physical gold. To do this, you will want to find a reliable source of physical gold bullion or gold bars. The custodian transfers the money from the self-directed IRA to the bullion supplier and the physical gold is deposited in the IRA. The actual gold itself is kept secured in a bank or credit union that is approved by the IRS where it will increase in value and allow for a better retirement when the time comes.