Safeguard Your Retirement Portfolio: Gold IRA Rollover

⦿ Yourself, a colleague, family member or friend were living in the USA over the periods of 2001 and 2008 and lost most of your retirement savings and thus couldn’t retire⦿ You are concerned about the scary state of the economy and the devaluation of the US dollar

⦿ You are worried about becoming a burden to your children in your 60’s or 70’s? ⦿ In need of a lower-risk investment  ⦿ You want to retire with peace of mind that your finances are secured for you and your family 

If so...You are not alone! It could be time for an IRA investment backed by gold.

A recent survey of the top precious metals companies has revealed that most citizens are seriously concerned about the state of the economy.

Regardless of who you would have heard about a Gold IRA from it is especially important that you have actively begun to do something about it. You have arrived at the right state of mind today if so because unlike other investments such as stocks, whilst all investments carry risks, Gold IRA is actually lower-risk in comparison wuith paper investment.

The 401k and IRA plans were created by the US congress to assist citizens to privately plan for their financial needs post retirement.

Most employees in the US entirely relied on the benefits given to them by the social security fund once they had retired.

This all changed in 1974 however, with the introduction of the ERISA Law, effectively changing retirement plans from DB (Direct Benefit) to DC (Direct Contribution) plans.

Those who already have some type of retirement plan set up can effectively carry out a Gold IRA rollover. These are the people who have 401k’s that already have some funds in it. Later, we will look at why anyone with these types of plan should consider a gold IRA rollover.

Now let us look at a subject that is bothering millions and millions of Americans.

The problem being 401K. Why do we need to retire it and why is it not working for millions of Americans any more?

⦿ The 401K was originally created by congress as a tax dodge for executives, some thirty odd years ago. It was never meant to be the primary vehicle of retirement for Americans and over the last twenty years it has become so.

⦿ Workers weren’t even eligible for it when it first started, but it was the executives who were trying to shield some of their income from regular tax in real time so they could put it away where it wasn’t going to be taxed.

Originally, the 401 K was meant to be a supplement to the kind of retirement that one would have, traditionally a pension plus social security. But as so many companies got rid of their pensions over the years subsequent to the introduction of ERISA, people became dependent on the 401K. Most of these people have lost out big time and only realized their losses upon retiring.

What’s been a disaster for many people going into the recession and now having come out of it slightly, is that the way the 401 K works is:

⦿ What has become apparent over the last few years is that if you had a hundred thousand dollars in your 401K ten years ago and you had the standard alignment of investment, you most probably have less than that now. So people who are retiring are going into their retirement with hardly anything in their 401K. Time and time again the people have to work past the retirement age of 65 yrs. Some even working into their seventies because their life savings were blown over the past couple of years on 401Ks.

⦿ There is a quirk in the 401k, which is, the closer you are to retirement the more likely you are to lose money, especially if the stock market goes down. This happens because you are putting less money into your 401k. That is what happened to a lot of people in 2001 and again in 2008.

Now with 2001 and 2008 in hindsight, what would you do if another stock market crash was to happen just before you retire? Would you let the lessons learned in 2001 & 2008 work for you or would you do nothing about it?

There is no doubt that there is an impeding stock market crash, simply because almost the entire generation of baby-boomers is about to retire. When they do, they are legally obliged to pull their money from their 401Ks, most of which is invested in the stock market.

This will be like a bank rush, where a lot of people go in and make withdrawals in a panic, except this won’t be a panic, it will be normal retirement. When that happens, the stock market will crash, repeating the 2001 – 2008 cycle for most retirees. 

⦿ If you have been contributing to your 401K over the last 5 to 30 years it is highly advisable that you hedge your bets. How do you do this? By simply rolling over your 401K into a precious metal-backed IRA. I’d recommend a gold backed IRA.

⦿ Gold IRA Rollover Situation 1: 401K Is With Former Employer

If you have a 401k with your ex-employer, the best route to take is to “rollover” those funds into a self directed IRA, commonly referred to as a traditional IRA.

⦿ A self directed IRA allows you to purchase precious metals like gold and silver with the money deposited (within 60 days) into it. 

 

⦿ Setup a Gold and Silver IRA account with a trusted broker/custodian.

⦿ Fund your account (rollover funds from 401K)

⦿ Execute a trade (buy precious metals)

Is Your 401K Is With Your Current Employer? In-Service Distribution Option May Be Available.

⦿ You may be able to rollover your 401k funds with your current employer if it has an “in-service distribution” option available. ⦿ This option allows your to do a gold IRA rollover within 60 days of money being freed up from your 401k in order to stay within the applicable Tax provisions.

⦿ Simply ask your current employer about the availability of the “in-service distribution” option. If it is available, your human resources people are likely to be in a position to guide you through the process.

⦿ Make a formal request through your HR department that it be included as this will benefit everyone that works for the company.

 If this fails, simply contact your Gold IRA company of choice and open an IRA account into which you can move (rollover) your funds. With this option, referred to as a “rollover”, you will:

⦿ Set up an IRA account with a new custodian.

⦿ Apply for your funds to be released from your current retirement account by your current retirement fund custodian.

⦿ Receive a distribution check from your retirement account

and deposit that check into the new retirement custodial account within the prescribed number of days.

⦿ Execute a trade.

Important: The same money can only be rolled over once every 12 months to preserve its “tax-deferred” status. Should you not deposit this amount within the prescribed number of days, the IRS will deem it taxable income.

This is referred to as a “transfer”. A transfer can be done at any time provided it takes place between two custodians. That is to say, the funds simply flow from one custodian’s account (current/old custodian) into another custodian’s account (where new IRA account has been setup).

Because this needs to happen between two custodians, all you will need to do is fill out some forms with the new custodian, granting them the necessary permissions and they will then liaise with your current custodian to complete the whole process.