If you’ve recently discovered the possibility of investing in gold through your retirement savings, then you probably want to know exactly how to do that. Of course, you probably already have a retirement plan and judging by the fact that you are here, it is most likely a 401k. As you know already, you cannot invest in gold through a 401k, but you also don’t want to lose the money that you have stored there, which is why you are trying to think of a way to move your 401k to gold without having to pay any penalties along the way.
Is that even a possibility, though? Well, as you’ll quickly see if you visit https://www.metal-res.com/gold-ira/how-to-move-401k-to-gold-without-penalty/, it definitely is a possibility. You just need to learn how to do it properly and, of course, you need to be patient. Rushing into this can lead you towards making certain mistakes in the process and that is definitely not what you want.
After all, your goal is to do everything the right way and thus end up with the perfect investments that will help you secure your future. Well, if that’s what you want, then here’s what you should do. Read on to find out precisely which steps you should take towards successfully moving your 401k to gold without facing any penalties during the process. As you’ll see, it’s really not that complicated, although it does require you to take a few right steps and avoid making mistakes. So, let’s have a look at the steps that I’m mentioning here.
Open A Gold IRA
First and foremost, you need to understand that Individual Retirement Accounts are the only ones that actually offer this possibility of investing in gold. That further means that you will have to open up an IRA, in case you don’t have one already. Now, you might be tempted to do this as soon as possible and that can lead to you rushing into things and actually opening the wrong type of an account. I am sure that you don’t want that to happen, though.
What kinds of wrong accounts am I talking about here, though? To put things simply, not every single IRA will allow you to buy and hold gold, meaning that you need to open a specific one if you want to be successful in this entire process. That specific one that I am referring to is actually called a self-directed IRA, so make sure to remember that and keep it in mind while in the process of opening your IRA. Click this to learn precisely what a self-directed IRA (SDIRA) is.
Send Money From 401k To IRA
Once you have your account ready, it will be time for you to fund it and you’ll be able to do that with the help of your 401k. In other words, you will have to do a rollover here and there are a couple different methods of doing it. There’s the direct one, which consists of you calling the company that actually manages your 401k and asking them to send money from that account to your new IRA. If you go for this option, you can avoid taxes and there will be a low risk of IRS penalties.
There is also the trustee to trustee rollover which definitely allows you to avoid taxes by moving the money from one IRA trustee to another. And, of course, there’s the indirect rollover that consists of you taking the money from your 401k and then putting it into a different, tax-deferred account. Of course, you’ll have a time frame during which you’ll need to deposit your money into this new account, or else you might face penalties. The deadline is usually 60 days, meaning that you’ll definitely have plenty of time.
Choose A Custodian
After you’ve gone through the above mentioned steps, you will probably be tempted to buy your gold bars and coins right away. While there is nothing wrong with that, I would advise you to take a different step first – the one that consists of you finding a custodian that you will be working with during the actual purchasing and storing process. Working with these professionals is a requirement and, of course, they’ll provide you with storage as well as some useful investment tips. That’s why choosing your custodian before making any purchases might actually be the right move.
Buy The Bars And Coins
Since you are now acquainted with a few things you need to know before investing in gold, there is practically only one thing left to do. In short, you should start investing, i.e. buying those bars and coins that you have set your mind to. As you can probably understand by now, this whole process isn’t that complicated and that difficult. It’s just that you need to know how to do things the right way and in the right order, and I hope that you’ve learned that now.
Do The Necessary Paperwork
If you thought that everything is over, then I hate to disappoint you, but there’s still one more thing left for you to do. You didn’t think you could avoid paperwork, did you? You’ll have to complete some paperwork with your IRA company and possibly with your 401k company as well. Once that is done, you’ll be able to get the gold that you’ve purchased and have it stored. And, most importantly, you will have done all of this penalty-free.