3 Big Benefits of Rolling Over Your 401K to Gold

Prior to taking any action involving a 401K to gold rollover, it is paramount to have a clear understanding of the ownership of physical or hard gold versus a gold claim often referred to as virtual gold.  People contemplating a rollover must become aware of and be willing to adhere to the Internal Revenue Service’s very strict rules associated with hard gold ownership.  They must also evaluate the pros and cons of each of these two options and their effect on personal financial situations.

Physical Gold versus Virtual Gold

Virtual gold affords the opportunity of instant conversion to cash money versus the time, procedures required and the availability of places to sell physical gold.  Physical gold must be stored in an IRS approved depository such as Delaware Depository or Sterling Trust Company.  With gold deposit insurance underwritten by Lloyds of London, both of these businesses charge an upfront fee for account establishment and annual fees ranging from $75 to $250 for maintenance, storage and dealer transaction.  The conversion of physical gold to virtual gold can be accomplished by enlisting the services of the dealer to liquidate the account at market value and move the funds via wire transfer to a Gold IRA account.  This procedure entails a maximum of 24 hours to complete.  Physical gold may also be retrieved by having it shipped to a physical address where, upon delivery, the depository is absolved of all responsibility.  For more in-depth information relative to physical gold storage, visit here.

A Starting Point for 401K to Gold Rollover

In addition to very helpful information, a visit to Gold-401k.org affords the opportunity to view a list of the top ten most reputable rollover firms ranging from Regal RA Assets to American Bullion, Inc.  Each firm’s website includes a telephone number, physical address, business bureau ranking and data relative to fees, pricing and conversion timing.  Included on Regal’s homepage is a free conversion kit to facilitate the acquisition of hard gold.

The three reasons to rollover a 401K to a Gold IRA are: Change of Employment, In-Service Distribution and Asset Protection.

1.  Change of Employment

When you leave your current employment venue, the company immediately ceases to contribute matching funds to your IRA account.  At this point in time, the best option available to you is to open a new IRA account at a bank or a financial investment firm and follow gold conversion procedures to avoid penalties and early withdrawal fees that the outright purchase of physical gold would incur.

2.  In-Service Distribution

While the majority of medium and large corporations offer this option to current employees, many small companies offer this service as well.  The employee’s major responsibility involves the movement of funds into a self-administered IRA account.  A standard transfer to gold involves 60 days for process completion.  Employees are strongly urged to consult with their company’s Human Relations Department to ensure that their 401K plan includes this option.  In lieu of this policy, many corporations elect to enroll in a bullion savings plan because this allows for a higher yearly cash percentage contribution before or after taxes.

401k rollover

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3.  Asset Protection

Although gold is not subject to inflation and deflation as is the dollar, the purchasing power of gold has outdone that of the dollar for many centuries.  Internal Revenue Service codes allow usage of the EFT route for 401K to Gold IRA conversion.  When electing to pursue this avenue, newbies are strongly advised to acquire virtual gold from local companies and to buy in small amounts because no personal data is required to be divulged.  Many new investors deem U.S. equity to be safer than international.  If using the services of a brokerage, even seasoned investors are urged to weigh the agency’s percentage in terms of the overall conversion benefit.  Investors are advised to bear in mind that personal withdrawal to purchase hard gold carries the risk of higher fees and retirement date delay.

Given the current marketplace economy, most IRA account holders take comfort in the fact that their IRA is insured by the Federal Government and is not subject to corporate decisions on Wall Street.  Virtual gold has a growth security net that physical gold does not have because there are no interest or dividends associated with physical gold.


Arnel Ariate is the webmaster of Money Soldiers.

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