Gold IRA Rollover

In today’s market, retirement investors should do everything they can to protect their wealth from volatility, inflation, currency debasement, and uncertainty. That’s why many of the world’s top investors recommend converting a portion of one’s portfolio to precious metals bullion. Known as a Gold IRA rollover, the process of transferring some of one’s IRA holdings into physical precious metals is easier than you might think.

In short, a Gold IRA allows you to own real physical precious metals in your retirement account on a tax-deferred or tax-free basis. A Gold IRA rollover allows you to easily create and fund such an account by transferring assets or cash from an existing IRA.  

To simplify the process, we’ve put together this short guide to Gold IRA rollovers. This way, you can easily convert stocks, bonds, ETFs, and other assets into precious metals—all within a tax-advantaged retirement account such as a self-directed Roth or Traditional IRA.

What is a Gold IRA Rollover?

A Gold IRA rollover is when you convert part of an existing retirement account or investment portfolio (i.e., 401(k), Roth IRA, SEP IRA) into gold coins or bullion bars, as a hedge against economic uncertainty and inflation. During a rollover, funds are withdrawn from the existing account and can be held for no longer than 60 days until they must be redeposited into the new IRA under a different custodian or administrator.

Gold IRA Rollover vs. Gold IRA Transfer

Investors have two options when it comes to funding a Gold IRA: a rollover or a transfer. Simply put, a transfer is a more secure and risk-managed strategy for moving assets between retirement savings accounts. There are many Gold IRA rollover rules and conditions of which investors must be aware. If an investor breaks these rules, the account holder may be subject to costly IRS-imposed penalties. However, fewer rules apply to transfer than do rollovers. 

Below, we’ve listed some of the key differences between Gold IRA transfers and rollovers as well as certain core similarities.

Gold IRA Transfer Rules	Gold IRA Rollover Rules
No 60-day transfer rule in effect	60-day transfer rule applies, in which the account holder must transfer the deposited funds from their account into the new gold IRA
No early withdrawal penalties	distributed funds are subject to a 10% early withdrawal penalty if the account holder is under the minimum withdrawal age of 59.5
Not taxable	If the 60-day rule is violated, the distributed funds are then deemed taxable as ordinary income
No annual limits	IRA holders are strictly limited to one rollover per 365-day calendar year
No withholding taxes	There is no tax withholding if a rollover is made from a personal IRA to another IRA

A Gold IRA transfer (sometimes referred to as an “IRA gold transfer”) involves moving funds from custodian to custodian. Therefore, the account holder does not receive any money withdrawn from their account. Rather, the funds are transferred directly between third parties without the account holder’s involvement. It’s a simplified, no-touch process for the account holder that’s handled entirely by the custodians.

The key difference between rollovers and transfers is that, in the case of IRA transfers, the distributed money never touches the IRA holder’s bank account. For more information about how the IRS regulates rollovers, and what the consequences of violating them are, check out this handy IRS-authored guide to general IRA rollovers. Or, consider reading this comprehensive Gold IRA FAQ section straight from Uncle Sam himself. 

For many, an IRA gold transfer is preferable simply because it minimizes the margin of human error relative to a rollover. In the case of a rollover, it’s possible to inadvertently create difficulties by, for example, failing to move the distributed funds into your new account before the IRS-imposed time limit transpires. Failing to do so would incur a significant financial penalty from the IRS; however, gold IRA transfers are not susceptible to this error since the process is handled automatically by your account custodian.

401(k) to Gold IRA Rollover

Despite what some investors believe, it’s entirely possible to transfer or rollover funds from an existing employer-sponsored or self-directed 401(k) to a Gold IRA. However, this process is subject to slightly different rules that must be made clear before proceeding.

Rolling over funds from a 401(k) that was sponsored by a former employer into a new Gold IRA shouldn’t present any issues. Simply choose a new Gold IRA custodian and have them initiate the 401(k)-to-IRA rollover on their end. However, a 401(k) sponsored by your current employer presents more of a challenge when rolling over into a self-directed IRA.

If you’re rolling over from a 401(k) sponsored by your current employer, check the terms of your policy. Sometimes, employer-sponsored 401(k)s disallow gold investments while you’re still employed. Call your employer and inquire about the rules of your current 401(k) and whether you’re permitted to rollover or transfer to a Gold IRA. 

Rest assured, it’s entirely possible to rollover a current-employer 401(k) to a new Gold IRA. For a more detailed description of the process, check out our article on Gold IRA rules and regulations. There you can find a full guide to sorting out employer-sponsored 401(k) rollovers. 

Deciding on a Gold IRA Rollover Strategy

There’s no one-size-fits-all approach to investing in a Gold IRA. Your financial plans will ultimately shape the kind of rollover strategy you select for funding your account. For instance, we’re commonly asked by our readers: “What percent of my portfolio should be allocated to precious metals?” To this question, there’s no clear-cut answer.

The level of funding dedicated to precious metals, like gold or silver, depends heavily on your personal risk tolerance and proximity to retirement. Investors who prefer not to take on much risk, and who may be within ten years of their target retirement age, may be better off dedicating more of their portfolio (i.e., 15-20%) to precious metals. 

In any case, supplementing your investment portfolio with alternative assets such as gold, silver, or cryptocurrencies can help provide a hedge against broader market instability. For instance, recent stock market instability was met by multi-year highs in the spot prices of gold, silver, palladium, as well as a bull run in Bitcoin and Ethereum. As economy-wide uncertainty has cast doubt on traditional markets, an increasing number of investors are diversifying with uncorrelated assets such as gold.

Still undecided? Luckily for you, we’ve interviewed some of the brightest minds in alternative investments to help you find a Gold IRA funding strategy that works for you. Check out our exclusive interview of 10 world-class financial advisors on the topic of gold and silver IRA allocation.

Choosing Your Gold IRA Allocation

In short, some of the world’s most accomplished investors swear by the 5-10% rule (e.g., NBC Shark Tank’s Kevin O’Leary, Tony Robbins, and Ray Dalio). There are, however, many more risk-averse investors who suggest going far beyond that mark. Questions that should guide your decision-making process include the following:

• What’s my outlook on the economy as a whole over the next 5-10 years?
• Has my portfolio been performing as expected over the past 5 or so years?
• What’s my true purpose for investing in physical precious metals (e.g., diversification, risk management, profit)?
• How close am I to my target retirement date?

Of particular interest is the third question, which should prompt you to search within yourself for your true intentions. We find that, in most cases, our readers’ responses can fit within three broad orientations that describe the investor’s motives for opening a Gold IRA. We’ve listed each of these below.

Diversification Orientation

The diversification orientation describes those who want to invest in precious metals simply to protect their portfolio from overexposure to stocks, bonds, and other traditional assets. Many risk-conscious investors diversify with gold to limit potential losses in the event of a stock market downturn or recessionary event. 

This orientation is well-suited for a 5 to 10% precious metals allocation. In other words, investors should consider dedicating roughly this much of their portfolio’s total value to precious metals holdings such as gold, silver, or platinum. Dedicating more than this percentage to these assets will likely be too conservative for investors with such a risk tolerance.

 

Inflation and Debasement Orientation

Investors concerned with currency debasement or widespread inflation might want to consider dedicating more of their portfolio to gold or silver. Since gold has long been considered a strategic hedge against inflation, a gold IRA rollover can help investors protect their wealth from an ever-declining U.S. dollar. 

Currently, the U.S. is facing a severe inflation threat after, in April 2021, the country reeled from the highest year-over-year CPI rise (+4.2%) since September 2008. During the 1970s notorious era of inflation, the value of gold rose over +600% due to institutional capital fleeing an unstable dollar. 

Investors seeking a safe haven from inflation should think about increasing their exposure to precious metals. Something in the range of 10 to 20% in gold or silver may be a suitable option for investors who are bearish on the U.S. dollar. If the dollar continues to backslide, those with holdings in precious metals will likely fare better than those who don’t. 

Systemic Collapse Orientation

Those most concerned about the overall state of the economy, and whether it can even be sustained into the future, are better off dedicating more of their wealth to precious metals. Gold and silver are commonly thought of as “disaster hedges” because they tend to rise in value when the geopolitical or global environment undergoes instability. 

In other words, when panic strikes the market, gold tends to benefit. For example, the March 2020 OPEC+ oil crisis saw the price of gold hit a 7-year high. During the infamous January 2020 U.S.-Iran airstrike, which saw a top Iranian general killed, gold prices jumped +1.4% overnight amid a stock market sell-off. 

Investors who want systemic protection against collapse or war should consider investing much more of their wealth in precious metals. At the top of the recommended allocation scale, this orientation calls for about 20 to 30% in gold assets. 

Disclaimer: The content provided on this page and throughout this website is for informational purposes only. It does not constitute financial advice and should not be taken as such. Always speak to your financial advisor before making an investment decision. 

Gold IRA Rollover: Choose IRS-Approved Bullion Bars

The IRS maintains strict standards regarding the type of gold assets that can be held within a tax-advantaged retirement account. For a complete list of authorized holdings, check out this guide to IRS-approved precious metals. These include, but aren’t limited to, the following types of gold assets:

In all cases, collectibles are prohibited from any IRA or 401(k) per IRS regulations. Rare coinage, or any other type of precious metal classified as a “collectible” under IRC Section 401(a), is strictly disallowed from an IRA of any variety. As a rule, gold bullion bars are never classified as collectibles. Regarding coinage, there are three key exceptions that allow for investing in gold coins via a Gold IRA rollover:

1. Certain coins described under 31 USC Section 5112
2. Coins minted and issued under the laws of any sovereign state
3. Coins or bullion kept in the possession of a bank or non-bank trustee 

Investing in unapproved assets may result in penalties or fines. To play it safe, it helps to simply stick to investing in gold bullion as opposed to rare coinage. If you insist on investing in gold coins, make sure you thoroughly review our list of top IRA-approved gold coins.

Physical Gold IRA Rollover vs. “Paper Gold” Rollover

There exist two primary forms of exposure to gold. First, there’s physical gold bullion. This describes cold, hard metal bars that are kept in secure vaults by trusted, third-party custodians. The second is referred to as “paper” gold, which describes any type of gold-based security, such as a gold mining stock or ETF. 

Aside from perhaps convenience, it would be hard to argue the benefits of paper gold over real metal bullion. Although some investors praise gold stocks for their added liquidity, this is a double-edged sword since increased liquidity makes it easier to buy and sell the asset quickly. Therefore, paper gold is known to be more volatile than physical metal commodities.

You need to look into a physical Gold IRA rollover if you want true exposure to the benefits of gold investing. In the event of runaway inflation or outright economic collapse, the gold stocks you own might be worth little more than the paper they’re printed on.

Still not sold? Below, we’ve listed some of the top advantages of physical gold investing as compared to securities-based gold exposure.

• Counterparty Risk: Unlike a publicly-traded stock, a gold bar cannot declare bankruptcy or fail to honor its contractual obligations—therefore, physical gold investors are free from the same counterparty risks as paper gold investors.
• Safe Haven Store of Value: In an economic crisis, physical gold bullion acts as a last resort store of value if cash and paper assets are rendered worthless.
• Physical Ownership: You own precious metal bars, which make them far more difficult to confiscate or seize as opposed to electronic assets.
• Transferring and Movable: Gold bars are portable and can be withdrawn from your IRA into your own hands or vault in the form of a distribution.

Although these benefits are not exclusive to precious metals, they present some of the most compelling reasons why gold and other metals have a rightful place in many investors’ portfolios.

Finding the Best Gold IRA Custodian

When you open a regular Traditional or Roth IRA, you simply drive to your local Vanguard or Fidelity Investments branch and apply on the spot for a new IRA. However, Gold IRA rollovers are a little more complicated than that. 

Conventional brokerages like Fidelity and Charles Shwab don’t support Gold IRAs. To open a Gold IRA, you have to research and select a Gold IRA custodian. This is the company that will initiate and facilitate your Gold IRA rollover with your existing IRA or 401(k) provider. A reputable custodian will work with you to ensure that your holdings are safely vaulted while remaining compliant with IRS protocols and regulations.

Trustworthy Gold IRA companies assist with the rollover process from end to end. These companies are fully transparent and provide you with all of the paperwork and documentation necessary to complete the rollover upfront, without any hidden clauses or fees tacked on at the end.

If you need a place to start, check out our guide to the world’s most reputable Gold IRA rollover companies. Beyond that, there are a couple of basic ground rules that must be kept top of mind when researching for a Gold IRA custodian, including:

1. Reputation and Prestige  

It should go without saying that a company with a rock-solid reputation and customer satisfaction profile is paramount when shopping for a Gold IRA provider. Unfortunately, there are companies with malicious intentions that prey on unsuspecting customers. 

Avoid any precious metals company that is not well-reviewed online. Customer-generated reviews on YouTube, Google My Business, Trustpilot, Reddit, and the Better Business Bureau (BBB) are excellent places to research authentic customer testimonials and reviews. 

The operative term is “authentic”. Unfortunately, some companies do publish paid-for reviews on their social media profiles. If the reviews are all similar in length and provide little substantive information that differentiates one from the next, then this should raise a red flag that the reviews are inauthentic.

Please note that only IRS-approved nonbank trustees can operate a precious metals vault. If your custodian does not mention being IRS-approved, then move on to another option. Other vendors slyly try to sell low-purity gold or numismatic coins that aren’t authorized for an IRA. To stay clear of bad actors, review our list of IRA-approved precious metals. 

2. Rollover Limitations

Bear in mind that the IRS only allows one penalty-free rollover per 365-day period. Therefore, if you complete a rollover on July 1, 2021, you won’t be able to initiate another rollover tax-free until July 1, 2022. As such, it’s crucial that you choose a custodian carefully. If you decide to change custodians before the 12-month period has elapsed, you’ll be on the hook for an early distribution penalty if you roll the funds over again.

List of Top Gold IRA Companies

With so many precious metals IRA companies in the market, it can be hard to decide on the best one for your needs. That’s why we’ve put together a quick list of the bestselling and most trusted companies in the industry, each of which has been in operation for a decade or longer:

 

Generally, you should expect to pay between $100 and $325 for gold storage fees from a reputable provider. Some companies, such as Regal Assets, charge $0 in rollover or transfer fees, and also waive all administrative and storage fees for the first year.

For a more in-depth analysis of the best custodians on the market, read our reviews of the top 10 Gold IRA providers today. There you’ll find a full breakdown of the nation’s best-reviewed Gold IRA rollover companies, as well as a list of five essential considerations you need to keep in mind when shopping for a gold rollover. 

Eligible Account Types for a Gold IRA Rollover

To complete a Gold IRA rollover, you can transfer funds from any existing tax-advantaged retirement account, including the following:

• Traditional or Roth IRA
• Self-directed 401(k)
• Employer-sponsored 401(k)
• SEP IRA
• 403(b)
• 457(b)
• TSP

In the case of employer-sponsored accounts, such as a 401(k) or 457(b), you may need to facilitate the rollover after you have terminated employment at the company. This is because certain employers prohibit rollovers from one account to another. In some cases, you may be able to do a partial rollover while still employed after you’ve reached 59.5 years of age.

Moving funds from an existing account to a new Gold IRA is simply a matter of registering a new self-directed IRA through a Gold IRA provider. Then, fill out a transfer request form to kickstart the process of rolling over the funds. Usually, it takes no longer than 14 working days for funds to successfully appear in the new IRA.

Are You Ready to Start Your Rollover?

If you’re sure that a Gold IRA rollover is right for you, you can get started by browsing our list of the best Gold IRA companies. There you’ll find all the information you need to kickstart your rollover and enjoy the wealthy-building benefits of true diversification. 

While you’re at it, consider taking your investment strategy a step further by investing in other risk-managed alternative assets. For deep diversification, you can add a Bitcoin IRA to your investment portfolio, or add other cryptocurrencies to your self-directed IRA or 401(k).