Your Complete Guide to Gold IRA Rollovers & Transfers

So, you’re considering a gold IRA rollover or transfer as insurance against catastrophe in the stock market?

Without question, the stock market is great. Many retirements and fortunes have been built and are being built using it, and we here at Retiring Wealthy fully endorse you taking advantage of it. 

BUT . . . the fact is, there’s a recession in the United States every eight years on average. 

Here are the last three and what may become the fourth:

  • 1990—inflation, oil price shock, debt accumulation
  • 2001—the dot.com bubble, 9/11
  • 2008—the housing bubble
  • 2020—the novel corona (Wuhan) virus

The wise investor will take steps to mitigate against the seemingly inevitable wild fluctuations in the market. 

One option for protecting your retirement is a gold IRA rollover from your 401k. 

Why? 

Because gold prices tend to move in the opposite direction of the stock market.

Let’s get started.

Disclaimer: The material covered in this article should not be taken as financial advice. It is provided for informational purposes only. Please consult your financial advisor before making decisions about investments.

What’s a Gold IRA?

So...what is a gold IRA anyway? 

A gold IRA, also called a precious metals IRA, is a type of individual retirement account (IRA). Historically, investors could only hold cash, bonds, and stock in an IRA. The standard IRAs were traditional IRAs and Roth IRAs. 

In 1997, the Taxpayer Relief Act expanded the types of investments that a person could hold in an IRA. That act made it possible to hold certain kinds of precious metals, including gold, silver, platinum, and palladium.

The IRAs holding precious metals are called gold IRAs or precious metals IRAs (also gold-backed IRAs, physical gold IRAs, and gold bullion IRAs). 

Gold IRAs are called “self-directed” or “alternative-asset” IRAs. The Internal Revenue Service has strict requirements for the precious metals held in these IRAs. Only certain bullion coins and bars are permitted.

Gold IRAs are governed by IRS regulations regarding custodians and depositories. 

  • A gold IRA must be opened with an IRS-approved custodian or administrator (this could be a bank, insurance company, or retirement investment company).
  • The depository must be an IRS-approved facility.
  • The precious metals held in a gold IRA must meet IRS-established purity standards. Gold and silver must be 99.9% pure. Palladium and platinum must be 99.95% pure.
  • Only coins on an IRS-approved list may be held in a gold IRA; most collectible coins are not permitted

Check the FAQ section of our Goldco review article for more information.  

Gold and precious metals IRAs are increasingly being considered attractive investment vehicles for older people because they often act as hedges against stock market volatility.

Consider this statement by former Federal Reserve Chairman Alan Greenspan: “Gold is a good place to put money these days given its value as a currency outside of the policies conducted by governments.”

If you’re interested in having a gold IRA and in rolling over a current retirement account or IRA into a Gold IRA, keep reading. We’ll talk about how to do that next.

What’s a Rollover and How are Rollovers Done?

A rollover is a term used for moving money from one retirement account into another retirement account. There are rules that must be followed in order to carry out IRS-compliant rollovers.

You may have a retirement account through your employer (such as a 401k or a 403b). If you stop working for that employer and start working for another company, the IRS permits you to move the funds—roll them over—to a new retirement account.

The IRS will also let you do a rollover if your company significantly changes its plan or changes the custodian of its plan.

There are three different ways a rollover can be done in compliance with IRS regulations.

  1. You can do a direct rollover. In this case, your account administrator issues a check directly to the new retirement plan or IRA. Your money goes straight from your old plan to your new plan.
  2. You can do a trustee-to-trustee rollover. An IRA being rolled over to another IRA could fall into this category, where the source plan trustee facilitates the rollover to the target plan trustee.
  3. You can do a 60-day rollover (or an “indirect rollover”), which the IRS calls the process when you manually transfer the funds from your old retirement account to the new IRA account custodian. Your old IRA or retirement plan distributes the funds to you in the form of a check. You’ve got 60 days to deposit those funds into your new self-directed IRA company’s bank account.

Are Rollovers and Transfers the same?

Rollovers and transfers are different processes with the same end result: getting money out of one retirement account and into another retirement account.

A rollover is usually the easiest way to fund a new retirement account from a current one.

It’s a streamlined process in which the administrator of your existing retirement account or IRA electronically sends the funds to the administrator of your new plan for deposit into that account.

A transfer, or an indirect rollover, involves at least one extra step. As mentioned above, the IRS calls a transfer a “60-day rollover,” so it can be a little confusing. With a transfer, instead of a distribution check going straight from your current account administrator to your new account administrator, the check comes to you. It’s then your responsibility to get those funds to the firm holding your new account within 60 days. 

Gold IRA Rollover Rules

Current IRS law allows a rollover only once per year.  The rollover can occur from a number of retirement vehicles, including an old IRA, 401k, 401a, 403b, 457, Thrift Savings Plan, or an annuity.

Rolling over retirement funds to a gold IRA first requires setting up a self-directed IRA. This kind of IRA lets you invest in a broader selection of assets than a traditional or Roth IRA does. You must choose an IRS-approved custodian to administer the account, an IRS-approved depository to store the precious metals, and a broker who will buy the gold. The precious metals held in the account must meet specific purity criteria set by the IRS. These are all rules that govern a gold IRA and impact a gold IRA rollover.

Gold IRA Transfer Rules

Gold IRA transfers from a retirement account or an IRA to a gold IRA must take place within 60 days, with Day One being the date that the distribution check is cut.

The penalties for missing the deadline are:
1) the funds become taxable, and
2) he distribution is now considered an unauthorized early distribution, subject to a 10% penalty.

If you missed the 60-day deadline because something happened that was beyond your control, the IRS may waive the penalties.

To gain a waiver, you will need to:
1) qualify for an automatic waiver or
2) self-certify that you meet the waiver requirements (the IRS will audit your income tax return to verify the information) or
3) get a private letter that grants the waiver (for a $10,000 fee). 

Qualifying for the automatic waiver entails meeting several criteria. Visit the IRS page for details on waivers of the 60-day rollover requirements (remember the IRS calls a transfer a “60-day rollover.”

Are Gold IRA Rollovers Different from Traditional Rollovers?

Yes, mostly because rolling funds over to a gold IRA is a more complex process (and thus more expensive) than rolling over funds to a retirement account that holds traditional paper assets such as stocks and bonds.

Your rollover to a gold IRA follows this progression:

  1. Set up a self-directed IRA of the kind that allows you to invest in and hold hard-asset precious metals such as physical gold, silver, platinum, or palladium. 
  2. Find an IRS-approved custodian for the IRA (a bank, credit union, brokerage firm, or trust company)
  3. Identify an IRS-approved depository for the precious metals
  4. Find a broker to buy the metals. The precious metals must meet IRS-established purity criteria and be on the list of accepted coins and bullion. (Not all coins are permitted in a gold/precious metals IRA.)

Rolling over retirement funds into a gold IRA requires that the proper kind of IRA be set up, the supporting entities be established, and the physical assets purchased and stored. It’s a much more involved process than a traditional rollover.

Rolling Over from your 401k to a Gold IRA

The first step in rolling over funds from your 401k to your gold IRA is to get in touch with your current account administrator and tell him or her what you want to do.

You’ll have to decide what kind of rollover you want—either a direct rollover or an indirect rollover (also called a transfer or a 60-Day Rollover). 

The direct rollover is usually easiest. Your current retirement account or IRA administrator electronically sends your funds to the administrator of your new gold IRA. 

The indirect or 60-Day Rollover or transfer involves more of your time and effort because the distribution funds are sent to you in a check. You must then send the funds to the administrator of your gold IRA account within 60 days.

(See the sections above on rollovers and transfers.) If you don’t get it done within the 60 days, you can face taxation as well as penalties for what the IRS will consider an unauthorized early distribution.

Approved Precious Metals for a Gold (Precious Metals) IRA

The precious metals allowable in a gold/precious metals IRA include gold, silver, platinum, and palladium. The metals must meet purity standards as set by the IRS. They can be in bar or bullion coin form, but not all coins are allowed.

Note: bullion coins are not the kind used in the marketplace. Instead, they are manufactured primarily for investment and are generally expressed in ounces or grams.

The IRS doesn’t permit collectible coins in gold IRAs because their purity isn’t high enough.

Visit Goldco’s pages to learn more about approved gold coins and approved silver coins. Strata Trust Company also provides a helpful list of IRS-allowed precious metals.

A knowledgeable broker will assist you in buying precious metals that meet IRS-mandated purity criteria. Gold and silver must have a fineness of 99.9% purity to be included in a precious metals IRA. Platinum and palladium must be 99.95% pure for inclusion.

Bars, coins, and rounds must also be produced by accredited or certified manufacturers. Small bullion bars must meet precise weight specifications.

Below is a partial list of IRS-approved metals that can be held in a precious metals IRA.

  • Gold
    • American Eagle Gold Bullion Coins
    • Australian Kangaroo/Nugget Gold Coins
    • Australian Lunar Series Gold Coins
    • Austrian Philharmonic Gold Bullion Coins
    • British Britannia (2013 and newer) Gold Coins
    • Canadian Maple Leaf Gold Coins
    • Canadian War of 1812 Gold Coins
    • Chinese Panda Gold Coins
    • Credit Suisse--PAMP Suisse Gold Bars
    • American Buffalo Gold Bullion Bars
    • Johnson Matthey Gold Bar
    • Valcambi Gold Combibar
  • Silver
    • American Eagle Silver Bullion Coins
    • America the Beautiful Silver Coins
    • Silver Morgan Dollar
    • Silver Peace Dollar
    • Australian Kookaburra Silver Coins
    • Australian Silver Koala Coins
    • Australian Silver Lunar Coins
    • Austrian Silver Vienna Philharmonic Silver Coins 
    • British Britannia (2013 and newer) Silver coins
    • Canadian Silver Maple Leaf Coins
    • Chinese Panda Silver Coins
    • Mexican Silver Libertad Bullion Coins
    • South African Silver Krugerrand
    • Johnson Matthey Silver Bar
    • Royal Canadian Mint Silver Bar
    • PAMP Suisse Silver Bars
    • 10 oz Sunshine Silver Bar
    • A-Mark Silver Bar
    • Walking LIberty Silver Bar
    • OPM Silver Bars
    • RCM Silver Bars
  • Platinum
    • American Eagle Platinum Bullion Coins
    • Australian Koala Platinum Coins
    • Canadian Maple Leaf Platinum Coins 
    • Isle of Man Noble Platinum Coins
    • South Africa Platinum Krugerrand Coins
    • Valcambi Platinum Bars
    • Credit Suisse Platinum Bars
    • PAMP Suisse Platinum Bars
    • Engelhard Platinum Bars
  • Palladium
    • Canadian Palladium Maple Leaf Coins
    • Russian Ballerina Palladium Coins
    • Baird Palladium Bars
    • Credit Suisse Palladium Bars

How Do I Open a Gold IRA?

  1. To open a gold or precious metals IRA, you must first find a custodian and a broker. The custodian sets up and manages your IRA account. The broker buys IRS-approved gold or other precious metals that will back your IRA. The custodian must be IRS-approved.

    Some gold IRA investment companies function as both brokers and custodians. Some work in cooperation with other companies so that investors can enjoy both services under one roof. Check out our Gold IRA Companies page [internal link] to see a comparison table of the leading firms in the field.
  1. Next you must identify and arrange for an IRS-approved depository to store the physical precious metals that will go into your gold IRA. (The IRS forbids keeping precious metals in one’s home.)

  2. After you’ve established a relationship with a brokerage company (or a custodian and a separate broker) and depository, you’ll pay upfront fees for the total account setup. These fees typically cost $50-$100 for the account setup itself, $100-$150 for storage, and $75-$225 for annual maintenance.

  3. Then you’ll deposit funds into your new gold IRA, either as a simple deposit or as a rollover from another retirement account or IRA. 

  4. Your precious metals will be purchased (under your direction) and delivered to the IRS-approved storage facility that you’ve chosen. 

  5. Your custodian will administer the account and handle your future contributions and distributions.

Gold IRA Rollovers in a Nutshell

Many mature investors find gold or precious metals IRAs appealing because of their generally stable performance and their function as hedges against market volatility. This kind of self-directed IRA allows for the holding of gold, silver, platinum and palladium bars, bullion, and coins of strictly defined purity criteria.

Gold IRA rollovers are more complicated and expensive than rollovers to traditional IRAs. This is because of the multiple entities and fees involved.

Gold IRAs must be managed by custodians and their assets physically stored in IRS-approved depositories. Brokers, custodians and depositories all charge fees.

A gold IRA must be set up in compliance with all IRS regulations, after which the rollover can be executed. Rollover options include direct rollovers and indirect rollovers (also called transfers and 60-day rollovers). A 60-day rollover that is not completed within that timeframe is subject to taxation and penalties, but there are some cases where the IRS may waive the limitation.

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