Gold IRA Rollover – Taking Control of Your Retirement Funds

Financial Health and Wealth Advice - Gold IRA Rollover – Taking Control of Your Retirement Funds

While most investors may feel well diversified with stocks, bonds, and mutual funds in their IRA accounts, what many may not realize is that there are numerous other financial vehicles that they can include inside of these tax advantaged accounts through gold IRA rollover.

Having gold in an IRA account can provide a number of benefits, such as diversification, protection of assets, and the opportunity for additional growth. Over time, gold has proven to offer investors a nice return, along with a viable hedge against inflation.

Why Place Gold In an IRA Account?

An IRA, or Individual Retirement Account, differs from a regular investment account. IRAs offer investors a number of different tax advantages, starting with the ability to grow investment gains on a tax deferred basis. This means that no tax will be due on the growth of investments inside of an IRA account until the time of withdrawal. Therefore, investments can essentially increase on an exponential basis over time.

Most investment firms are only able to provide their customers with more “traditional” investment products such as stocks, bonds, and mutual funds to place inside of their IRA accounts. Yet, while these products may work well for some, they are also highly volatile and subject to market fluctuations and downturns.

Today, there are a growing number of financial entities that are now starting to offer self-directed IRA accounts. These types of IRA accounts allow investors to widen their span of IRA investment choices to include vehicles such as gold. In doing so, investors have much more flexibility and control over the types of investments they can have in their IRA account. Their retirement assets are also much less vulnerable to the downside movements of the stock market.

Why Consider an IRA Rollover?

An IRA rollover allows you to essentially transfer the holdings of one retirement plan into another, without the need to pay taxes. Therefore, should an individual be leaving an employer, for example, he or she could take the funds in their employer-sponsored retirement plan and move them into a personal IRA account. This will allow the individual to have much more control over what those funds are invested in going forward.

IRS Requirements for Completing a Gold IRA Rollover

When transacting a gold IRA rollover, there are several steps that must be followed per the IRS (Internal Revenue Service). First, when rolling over funds from another IRA or other type of qualified retirement account, the account holder has a window of only 60 days with which to complete the transaction.

Therefore, if the funds are not inside of the new IRA account before that time period has elapsed, the account holder will be considered to have taken receipt of the funds, and will typically be taxed and penalized accordingly.

On top of the 60-day time limit for gold IRA rollovers – as well as other types of IRA rollover transactions – an investor is only allowed to participate in one IRA rollover transaction within a 12-month period each year.

The Internal Revenue Service follows IRA rollover transactions very closely, as these transactions are required to be reported each year on IRS Form 1099-R by the financial institution that distributes the IRA funds. The investor is also required to report the transaction on his or her annual tax return.

Given these requirements, it is important that investors have their IRA funds moved as quickly as possible, and that they not take personal receipt of such funds – at least for longer than the allotted period of time. Otherwise, they could face taxation on the funds, as well as an additional early withdrawal penalty if they are under the age of 59 1/2.

Additional Gold IRA Investment Requirements

Once the gold IRA account has been opened, there are only certain types of gold and other precious metals that are allowed to be included in the IRA account. These metals include the following:

  • Gold bars with a purity of 24 karat (having a fineness of 0.995 or higher)
  • Gold coins with a purity of 24 karat (having a fineness of 0.9999), with the exception of the 22 karat U.S. Gold Eagle
  • Bullion coins from America, Australia, Austria, and Canada (but not the South African Krugerrand)
  • Silver bars and coins having a 0.999 or higher fineness, such as the 1 ounce U.S. Silver Eagle, the Canadian Silver Maple Leaf, and the Mexican Silver Libertad bullion coins
  • 100 ounce silver bars
  • 1000 ounce silver bars
  • Palladium bars and coins having a fineness of 0.9995 or more

How Gold Can Be Purchased

When an investor purchases gold for their IRA account, the transaction will take place through the account holder’s “custodian.” The gold IRA custodians – the financial companies that hold the investor’s IRA account – will actually handle the transaction for the IRA investor.

There are two ways in which the gold can be purchased. First, it may be bought in certificate form. These certificates are legal documents stating that the investor owns a set percentage of a gold company. When the certificates are redeemed, they can then be converted into physical gold. The other way is by buying the actual physical gold itself. This gold is then stored in a metals repository for safe keeping.

Regardless of how an investor opts to purchase gold for their IRA account, setting up a gold IRA rollover is easy, and getting started takes very little time. Once the account is in place, the investor will be ready to take advantage of all the benefits that investing in gold can bring, along with the additional IRA tax related incentives.

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