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One might say there's no IRA like a gold IRA. You'd be amazed by what some people chuck into retirement accounts that are supposed to be long-term and safety-oriented. With precious metals, you know where you stand.
They're just about the most time-proven investment out there, and while appreciation is not ‘guaranteed,’ gold has maintained its value over thousands of years. Gold IRAs have a lot of flexibility, plenty of value and offer a sense of security that's hard to match.
When it comes to funding your gold IRA, a rollover or transfer is one of the most popular options. There are companies that specialize in opening a gold IRA for you.
This includes setting you up with an IRS-approved gold IRA custodian, procuring precious metals and ensuring their safe storage. In short, a hands-off approach.
Opening a gold IRA account can seem tricky on its own, let alone considering what you can roll over into it and how. We'll split our gold IRA rollover guide into three main aspects of the rollover process:
1. The paperwork surrounding the gold IRA rollover
2. The who's who, do's and don'ts of precious metals investment, and
3. The companies you'll want to consider to facilitate this rollover.
By the time we're done, you'll hopefully have no questions left and will be ready to start the gold IRA rollover process with specialists by your side to guide you step-by-step. On with the first...
What is a Gold IRA Rollover?
In the basest of terms, it means moving funds from an existing retirement account into a newly-created gold IRA. Once there, the funds can be invested into a variety of precious metals, so long as they're IRA-eligible. Eligibility is something we'll cover in greater depth as we expand on the investment side.
What kind of accounts are eligible to fund my new gold IRA?
Both employer-sponsored plans and existing retirement accounts can be "liquidated" and the funds placed into your gold IRA.
Examples of the former include:
· Active 401(k) plans
· Inactive 401(k) plans, that is, those by a former employer
· Other employer-sponsored plans like 403(b), Thrift Savings Plan (TSP), 457...
Examples of the latter include:
· Traditional IRAs
· Roth IRAs
· SEP IRA
· SIMPLE IRA
With this in mind, eligibility of an employer plan or retirement account for a gold IRA rollover is among the more important considerations to make. Funds from a former retirement account, most commonly 401(k)s, are generally greenlighted without issue. That's not always the case, though, and active ones can be even more challenging.
In certain cases, your current employer might not allow for gold investment using 401(k) funds. You'll have to check with them to ensure eligibility.
However, if you've picked the right gold IRA company, they'll facilitate the entire rollover process for you. That will include assistance from a gold IRA custodian when it comes to figuring out whether the current 401(k) is eligible.
Related: Buy Physical Gold and Silver (Tax-Free) - Request Your Gold IRA Rollover Investor Kit Today
What are the Common Types of Rollovers?
Because they require less double-checking, retirement plans by former employers are generally a shoe-in for a gold IRA. In terms of IRA types themselves, traditional IRAs and Roth IRAs are both popular inclusions.
It depends on what the investment plan was before you decided to move a portion of your retirement into physical gold, and what kind of retirement account was being managed.
Let's briefly go over how the gold IRA will be funded initially and down the line...
Rollovers into a gold IRA are as popular as they are because there aren't limits to the amount you can pour into, and invest in, your new precious metals IRA. Whether we're talking retirement, annuity or compensation plans, significant amounts can be placed in the new IRA. The same goes for any traditional IRA you own or have inherited.
On the other hand, if you're funding the new gold IRA with money from an individual, non-retirement account, there are limits. Contributions from personal accounts are limited to $6,500 a year, with an additional $1,000 allowed if you are over 50. This can be further inhibited if you have a high income, making rollovers that much more of a preferable method.
And while personal account contributions sound more flexible on paper, a custodian can actually help you make a partial gold IRA rollover, where only some funds of your current plan make it to your new gold traditional or Roth IRA, depending on your preference.
Transfers and Rollovers: What's the Difference?
You will often hear the terms used interchangeably, because any custodian worth their salt will handle and help you with both. They are very much different, however.
A transfer is more direct and therefore preferable, but not always an option. Here are some hallmarks of a gold IRA rollover that are generally absent when talking transfers:
· The funds must be moved from the old account to the new one within 60 days
· If the deadline is not met, the funds will be treated as regular investment and therefore taxable, eliminating one of the most important perks of a gold IRA: tax-deferability
· Early withdrawals by individuals under the age of 59.5 are subject to a 10% penalty
· Only one rollover a year can be performed
With transfers, none of the above will be an issue, giving the new account more leeway. That said, rollovers shouldn't be an issue when working with a decent gold IRA company that has partnered with a dutiful custodian. This party will also determine whether a transfer or rollover is possible or preferable depending on the situation.
Do I Need to be a Legal or Tax Expert to Rollover into a Gold IRA?
Absolutely not. Because you'll be working with a gold IRA company, you'll have a custodian that specializes in all of this and then some. As our gold IRA rollover guide explains, the entire process is actually meant to be hassle-free on the part of the customer.
The gold IRA company is compensated from the sale of gold and silver. The gold IRA custodian and vault storage facility are both getting compensated for their efforts in the form of fees. In return, you get an assurance of smoothness and very little to worry about.
After the new account is opened, which can take up to three weeks, you'll mostly be focusing on the investment side of things. Sure, the gold IRA company offers information about this, but you'll no doubt want to know more about the new range of assets you're holding.
While the custodian is handling the paperwork, don't be surprised to find yourself struck by a newfound curiosity to constantly watch the precious metals market for new developments.
So, let's skip to the second part of our gold IRA rollover guide, and that's precious metals. This will be your primer into gold, silver, platinum and palladium investment over the long-term.
If you've never had any exposure to these assets, be prepared for quite a ride. It will be bumpy, but your seatbelt will be fastened tight all the way through.
Why Precious Metals in an IRA?
Gold and other precious metals are a popular choice for both personal collections and retirement investments. But you might not have heard of these precious metal IRAs mentioned as much until recently. That's partly because we're on the back of a 30-year record inflation figure.
The Federal Reserve, with its recent multi-trillion dollar stimulus, has printed 80% of all U.S. dollars in circulation in two years' time.
Inflation and currency debasement were always a theme, but with figures such as the above, they're approaching banana status. What this means for everyone, from large investors to the everyday person, is wealth erosion and loss of purchasing power.
The longer you hold onto your $10 bill, the less valuable it is and the less you can buy with it. Eventually, it will probably amount to dimes.
Precious metals, primarily gold, are a shield against this. Gold is mainly priced in U.S. dollars, but it has similar or better performance in any other currency.
As the dollar and other currencies weaken, gold becomes more expensive. When Nixon took gold off the gold standard, an ounce of gold was worth $35. Today, it trades above $1,900.
What are the Benefits of Investing in Precious Metals?
Modern portfolio theory, which is now being reassessed, is based on hedging risk with defensive assets. You might have heard of the 60/40 allocation, where 60% of an investor's assets is placed into stocks and 40% into bonds. Stocks are supposed to offer a faster but riskier source of returns, and bonds a slower but safer one.
This is now being shoved aside as the norm for several reasons. The bond market is experiencing a crisis for the history books, where many sovereign bonds are offering a negative yield. Instead of getting a slow interest, you're actually paying the government interest to hold its debt.
Those bonds that haven't reached this territory yet are nearing all-time lows. The stock market is due for a crash, and most agree it's being held up only by stimulus that has now evaporated.
From here, the question becomes: what does one invest in? Alternative assets have grown more popular for those chasing returns. On the defensive side, gold and other precious metals have quickly shoved aside government bonds.
Portfolio managers are now considering metals as a defensive replacement for bonds altogether. They were always a safer option, and with the returns they've been posting as of late, the decision seems like a straightforward one.
The Optimal Allocation to Gold
Even when the stock and bond markets worked as they should, gold investment experts recommended a 10% portfolio allocation to gold. Those with a real affinity for the metal would suggest that investors place as much as 15-20%. That's a lot for a portfolio whose primary purpose is to gain returns.
The primary purpose of your gold IRA is to offer you financial stability and prosperity down the line. The aforementioned 10%-20% are on the lower end of what you might want to hold in bullion.
Just based on the 60/40 portfolio theory, and presuming that your gold IRA makes up for a significant part of your total assets, you can't go wrong with moving a portion of your stock-heavy portfolio into precious metals. Many go higher because there is so little risk involved and the reward can be immense.
Discuss with a trusted advisor. Your bullishness on metals will depend on your long-term economic outlook. Just know that the goal of a gold IRA is to diversify your portfolio and going too heavy in any one asset class is not diversification.
Let's touch upon what each of the four precious metals does in your gold IRA.
Related: Buy Physical Gold and Silver (Tax-Free) Request Your Gold IRA Rollover Investor Kit Today
What are the Reasons to Invest in Gold?
Gold is the flagship precious metal, the most popular one for any kind of investment in this category. It's the most stable, and has a history that can't be matched.
Gold has not only been used as a currency for as long as civilization existed, but it was always the most valuable currency. Whatever side metals were used in history, from silver to copper, were used for smaller transactions because gold was more valuable.
These days, not much has changed. Weigh gold against a pile of any currency and compare their value at the same weight. You'll notice that gold fares quite well. Overall, it's the least risky of the four metals, although there is a lot of volatility that makes room for returns and entry points.
It has the most varied investment options by far and is oriented towards keeping inflation and wealth erosion at bay more than anything. It reacts most predictably to the upside when any crisis occurs, making it both time-proven and dependable in any scenario.
What are the Reasons to Invest in Silver?
Where gold goes, silver follows. It's a common perception that those who can't afford to invest in gold invest in silver. But this is both oversimplified and inaccurate.
Yes, silver has a much lower entry point. Whereas at the time of this writing, gold is going for $1,900 an ounce, silver is trading for just $25.
But silver, despite moving up and down with gold, is a precious metal on its own. It has a similarly tried-and-true history as gold does. The investment options are, for the most part, just as varied. One could argue even more so, given the prices.
Silver is a lot more volatile, as it's both an investment and an industrial metal. That means its price is not only determined by what would be the factors moving gold's price, but also the manufacturing sector.
Fortunately for silver investors, industrial silver demand is always on the rise. Gold is used in jewelry, electronics and medicine but silver is a key component in the renewable energy industry. Many also argue that silver is historically undervalued and could have a massive breakout at any time.
Why Invest in Platinum and Palladium?
Gold and silver's popularity tends to shove the other two precious metals to the side. But the observant investor always keeps them within arm's reach. Right now, platinum's case is making itself: despite being historically worth more than gold, it now sits at roughly half of gold's current price.
It's very rare, and mining prospects are localized and questionable. That means that an unexpected event, similarly as in the case of silver, could send platinum prices flying in a bout of catch-up.
Palladium is the most industrial metal of the four, one could say. That its price now exceeds that of gold, however, will tell you that it is no less precious.
This is partly because palladium's supply picture is even worse than that of platinum, and prospects aren't looking especially bright. Not unless you're a palladium investor, that is. Like silver, both platinum and palladium have lots of industrial uses that are always on the rise.
Physical Gold Vs "Paper" Gold
We've made a big point over investing in gold to battle debasement of paper money. So it hardly makes sense to choose anything but bullion with this goal in mind. Derivatives of gold and other precious metals, be they stocks or anything else, are plentiful.
Anyone with an interest in gold investment, and especially those looking to place it in an IRA, should understand that derivatives are primarily a speculators' tool.
They are used to trade heaps of money on an intraday basis without any metals being moved. The derivatives do not have a 1:1 backing, and there has been plenty of dissatisfaction with how the paper gold market is affecting the physical gold market.
The truth of the matter is that the two are fundamentally disconnected. Paper gold goes against all of the basic principles of precious metals investment: it carries counterparty risk, isn't tangible or transparent, and will come crashing down if a systemic collapse happens. Bullion, on the other hand, will withstand crashes of any kind, be they physical or economic.
What Kind of Bullion is IRS-Approved for your IRA?
Whether the gold IRA is Roth or Traditional, we can't just throw any physical precious metal in the vault behind it. The bullion need to be IRS-approved for IRA placement, and if it isn't, you could end up with some hefty penalties.
As we'll soon detail, this won't really be an issue when working with specialized companies. Gold IRA companies will tell you which bullion is and isn't approved and can, if you prefer, handle the choice of coins and bars altogether. Still, we'll briefly go over what IRA precious metals are.
You'll often hear that collectibles aren't allowed in an IRA, but really, the thing you want to be looking at is purity. Eligibility for placement in an IRA depends on the precious metals content in the coin or bar.
Gold requires a 0.995 purity, silver a 0.999 one, platinum a 0.9995 one and palladium likewise a 0.9995 one. These are minimums, so the higher, the better. You'll often see metals of this kind advertised as IRA-eligible.
Examples of IRA-eligible gold bullion include...
· American Gold Eagle and Gold Buffalo coins
· Australian Gold Kangaroo and Nugget coins
· Canadian Gold Maple Leaf coins
· Any bar made by a private refinery with a gold content of 0.995 or higher
Examples of IRA-eligible silver bullion include...
· American Silver Eagle coins
· Australian Kookaburra Silver coins
· Canadian Silver Maple Leaf coins
· Mexican Silver Libertad coins
· Any bar made by a private refinery with a silver content of 0.999 or higher
Examples of IRA-eligible platinum bullion include...
· American Eagle Platinum coins
· Australian Koala Platinum coins
· Canadian Maple Leaf Platinum coins
· Any sovereign or private minted coin or bar with a platinum content of 0.9995 or higher
Examples of IRA-eligible palladium include...
· Canadian Palladium Maple Leaf coins
· Russian Ballerina Palladium coins
· Any sovereign or private minted coin or bar with a palladium content of 0.9995 or higher
This is just a brief overview, and the supplier of the precious metals for your IRA can have a fairly varied inventory in terms of what's available. Now that we've covered precious metals in an IRA, let's go over their suppliers: the companies making it happen.
Related: Gold IRA Tax Rules - The IRS and Your Investments
How Do I Open a Gold IRA for my Rollover?
We've went into some lengths about how rollovers into a gold IRA can be a tedious process, and we meant it. You need a new self-directed IRA custodian to manage the account on your behalf.
Having a custodian isn't just a matter of having someone handle your paperwork. Rather, it's an IRS requirement for a gold IRA that needs to be met. And on top of this, you need a secure vault that is compliant with a variety of laws and regulations where the metals will be stored.
The entirety of this process is automated, in a sense, by working with a gold IRA company. These companies specialize in rollovers and transfers from existing plans and funds into a newly-opened retirement account. Once open, they, along with the custodian and the depository, do most of the heavy lifting for you.
You have plenty of say when it comes to how your self directed IRA will be handled, but you can just as easily have a hands-off approach and the gold IRA company will do everything for you. Obviously, fees are involved, but these can vary greatly.
Some companies charge a fee for rollovers and transfers, others don't. You can definitely expect to be charged fees for management and storage, however, which generally move in the $100-$300 annual range.
The companies willing to facilitate your gold IRA rollover are aplenty, but some, as always, stand out. We'll go over five examples of top gold IRA companies that will handle your rollover and manage your gold IRA from top to bottom. Each varies ever so slightly from the other, so the choice will ultimately come down to your needs.
Top gold IRA Companies for 2022
Augusta Precious Metals
Augusta Precious Metals - a top gold IRA company
Augusta Precious Metals has been in business since 2012, and is headquartered in Wyoming with another office in California. While they aren't as old as some of the other companies on the list, they've done a lot in the decade since the doors were opened.
Great employee reviews and outstanding customer reviews: so much so that we haven’t found a single legitimate negative review. Watchdog companies like the Better Business Bureau and the Business Consumer Alliance agree.
Their staff boasts a lot of expertise, to the point that the company has an in-house compliance department. In other words, they take regulation very seriously. Custody is done with Equity Trust Company, and storage is facilitated by a selection of IRS-approved vaults that you can choose from.
One could say with some degree of fairness that Augusta Precious Metals is better-oriented for those with a higher net worth. Benefits for high net worth customers corroborate as much. But even more importantly, they have one of the higher investment minimums you'll come across, with a $50,000 required to make an initial purchase.
This is probably how the firm can afford to spend more time with each customer through one-on-one educational webinars designed by their on-staff Harvard trained analyst.
Augusta’s personalized attention to their clients puts them at the top of our list. Among the biggest drawbacks of working with this company is that they offer no platinum or palladium products to IRA investors, meaning that you can only invest in gold and silver.
Request More Information from Augusta Precious Metals Today.
Goldco Precious Metals
Goldco Precious Metals - Recommended for Gold IRA Rollovers
Founded in 2006, Goldco Precious Metals has over 15 years of experience with managing gold IRAs, and they've done so in an arguably flawless manner. Like other gold IRA companies, Goldco partners with custodians and vaults to facilitate rollover and account management. It also offers bullion for sale independent of whether it's going into a self-directed IRA.
As you'd expect, Goldco's customer reviews are all accolades. The Better Business Bureau and the Business Consumer Alliance have given them top grades. As for celebrity endorsements, how about Sean Hannity? The television personality has given Goldco the thumbs-up and is displayed in the company's advertisements and promotional material.
The company's transparent, flat and affordable fee structure is one of its strong points when many of its competitors aren't as up-front about fees. Goldco also commits to promotions in order to make their offering more appealing.
As with the previous company, however, a major drawback for some will be the $25,000 purchase minimum. While not as high as Augusta, this account minimum might still come off as lofty to some.
Birch Gold Group
Birch Gold Group - Gold IRA Experts
Having worked with gold IRAs since 2003, there's no doubting that Birch Gold Group and its team know their stuff. While all of the companies on this list need to and do have excellent reviews and customer satisfaction, Birch Gold goes an extra mile.
The company has a separate team meant to address and resolve any issue a customer could have, which has maintained their top Better Business Bureau and Business Consumer Alliance scores for close to two decades.
Aside from a top-notch custodian, customers can choose between two high-end storage facilities in the form of the Delaware Depository and Brink's Global Service. Customer service is consistently cited as an above-and-beyond thing with Birch Gold. More than just assisting with inquiries, the site itself is a sort of information hub with insightful economic commentary.
An exceedingly strong point is that the firm offers not only gold and silver, but also an array of platinum and palladium products. The fee structure is flat across the board. It recommends a $10,000 purchase minimum, which can either be interpreted as low or high, and waives first-year fees for rollovers of $50,000 or over.
Advantage Gold
Advantage Gold - Top Rated Gold Company
The newest company on this list has had a quick rise to the top ranks of gold IRA providers. Since 2014, Advantage Gold has been true to its mission of customer service and education. It goes without saying that getting the best possible marks from the Better Business Bureau and the Business Consumer Alliance is no walk in the park.
Customers laud both the company's commitment to educating its customers and assuring their satisfaction. Advantage Gold has two custodians and two storage partners, and it also allows customers to choose a different custodian from the ones they're partnered with. They offer a range of excellent gold, silver, platinum and palladium products with what is touted as a fast delivery.
Birch Gold Group has a $20,000 account minimum, along with bonuses available on both the $25,000 and $50,000 rollover threshold. A curious point is that the company doesn't have transparency in regards to prices when it comes to available coins on the website. With no prices listed, you might find yourself needing to do some research.
Gold IRA Rollover - Do Your Homework
The gold IRA rollover is becoming more common with conservative investors across the United States. But don’t rush into it. Take your time. Review top gold IRA specialists and weigh the pros and cons of buying physical gold and silver with your IRA account. Taking the time to find the best gold IRA company now will ensure a stress-free rollover with a reputable firm.
