How to Invest in a Gold IRA

Gold IRA

If you are thinking about your financial future and how to save for retirement, IRAs, or Individual Retirement Accounts, are worth considering. Unlike 401(k)s, which are savings accounts provided by your employer’s company, IRAs are accounts you open on your own. There are a few different types of IRAs, each with its own features and requirements, but all provide tax benefits that could help you save more in the future.

For people who love to invest in stable currencies and precious metals and want to expand their portfolios, gold is usually the first option to consider. Gold is known as a safe-haven asset because it can decrease the overall risk in your portfolio. Statistically speaking, gold has performed well during stock market crashes, which is another reason why investors consider it a safe choice.

If you want to hold gold in your IRA account, it can’t be in your regular retirement account. You’ll need a separate gold IRA account for your gold or precious metals investments. Learn how to invest in a gold IRA properly. Let’s dive in!

What Is a Gold IRA?

Gold IRAs function like regular IRA accounts, but instead of investing in bonds and stocks, you are buying precious metals. You can also include other precious metals such as platinum, silver, and more. Gold IRAs may also contain gold mutual funds that invest in bullion, gold stocks (shares of gold production companies or gold mining companies), and gold EFTs that track gold indexes.

How Does a Gold IRA Operate?

A gold IRA operates like most retirement accounts in the United States. The added advantage is that it delivers more control over your funds to include gold bars, gold coins, and other precious metals, including platinum, silver, and palladium.

Like most retirement accounts, any gold IRA owner can invest the retirement funds based on pre-tax or after-tax treatment and take distributions later. With your gold IRA account, you will continue enjoying beneficiaries, quarterly statements, and online balance reports.

401k text with coins at the bottom

 

Gold IRA Account Types

As with all retirement accounts, there are a few types of accounts, and each provides various tax advantages.

Traditional IRA

A traditional gold IRA account is a tax-deferred savings option that works similar to your current IRA. The contributions, investments, and any gains aren’t susceptible to taxes. The IRS sets an annual contribution limit of $6,500 if you are above 50 and $5,500 if you are under 50. With a pre-tax IRA, you’ll have to pay distributions taxes during your retirement period.

Roth Gold IRA

Another type to consider for your IRA account is Roth gold. It is an after-tax retirement option and works like your current Roth IRA account. While there are no direct tax deductions, the main benefit of considering a Roth gold IRA is that you won’t have to pay taxes in the future, during your retirement.

SEP Gold IRA

SEP or Simplified Employee Pension gold IRA is an option for self-employed workers and business owners. It works similarly to a traditional pre-tax IRA, where contributions aren’t susceptible to taxes, but it provides greater contribution limits. SEP IRAs can be rolled over or transferred into a new SEP IRA or traditional IRA account. Instead of the $6,500 and $5,500 limit, you can contribute up to 25% of the income.

Oxford Gold Group can point you in the right direction and help you select the best IRA option for your financial situation. We can help you diversify your precious metals investments and stabilize your retirement portfolio.

man learning gold ira through phone

 

Why Consider a Gold IRA?

Many people see the gold IRA as an opportunity to diversify their retirement funds. The value of gold tends to move differently compared to stocks, bonds, and other paper assets. When mutual funds and stocks decrease in value, gold rises. If your other investments suffer a loss, your gold will increase in value and compensate for your decline.

While the value of gold varies similar to the value of most precious metals’, it has remained a staple commodity for hundreds of thousands of years and will probably remain for years to come.

By considering a gold IRA, you will upgrade your portfolio and maintain the preferred tax treatment. Rolling over a portion of your current IRA account into a gold IRA will not affect your tax implications. The following are the main reasons why investors and financial experts recommend investing in a gold IRA.

Profit Opportunity

The historical performance of gold shows that precious metals have excellent profit potential. In 2000, the gold price was approximately $200 per ounce. In 2017, the gold price reached $1,200 per ounce, a whopping 5X return on investment.

Hedge Against Deflation and Inflation

Gold provides a hedge against deflation and inflation and protects your portfolio from the effects of both economic conditions.

During the US dollar devaluation between 1998 and 2012, the gold price doubled, reaching $1,900 per ounce. Increases like these have been observed throughout the years, proving that gold is one of the safest investment options to consider.

Portfolio Diversification

Rolling over a portion of your retirement plan in gold diversifies your portfolio in an asset that has a long record of protecting your finances, especially when currencies, governments, and markets falter. Precious metals provide an extra layer of diversification, making it a valuable addition to any financial retirement plan.

How to Set Up And Invest in Gold IRA

To open a gold IRA account, you have to choose a custodian to hold your assets. The gold must go into official IRS-approved depositories and not regular savings accounts in the banks. You can go to the nearest trust company, credit union, or brokerage agency to find a verified custodian to set up your gold IRA.

Open an Account

You can open your IRA account with any verified and accredited custodian of your choice. You want a custodian you can trust with your assets, so make sure to consider all options before committing to one.

Give an advantage to investment companies with a history of holding IRAs, stocks, and precious metals. Custodians with a proven record have stable relationships with precious metals dealers and can negotiate for better prices. Don’t forget to check out reviews to see how each investment company or brokerage agency has performed throughout the years and how they respond to different customers’ needs.

Whether you are considering adding gold or other precious metals to your IRA account, the Oxford Gold Group has the perfect solution for you. We can help you establish your new gold IRA account and guide you step-by-step throughout the process. A dedicated account partner will walk you through the application, which takes less than 10 minutes to complete. You can send us the completed application via email, fax, or mail. Once we have your information, we will process the application and have your gold IRA account set up within 24 hours.

Fund It

Your IRA account has to be pre-funded before you start investing. You will send the funds to your custodian (an investment company or brokerage agency), so they can select the best funding method and start the rolling process.

You can choose between:

  • Annual IRA contribution: You can complete the process online with an electronic transfer or by sending a wire or check. There are limits on the annual amount you can contribute.
  • IRA-to-IRA: If you already have an IRA account, you can transfer some or all of your funds to your new, gold IRA account.
  • Rollover: If you already have 403(b) or 401(k), you can roll your balance over to your IRA account.

The Oxford Gold Group can reach out to your current custodian to organize a tax-free rollover of your funds. The transferring process may take up to five business days, depending on your custodian. Usually, the funds are transferred via bank wire, and once we receive it, we will deposit into your gold IRA account.

Invest It

Once you complete the two previous steps, you are ready to invest. Before you do anything, consult with the investment company, especially if you don’t have much experience.

Our dedicated partners can help you determine what precious metals you would like to hold in your IRA (besides gold) and how to invest properly.

We then ship the metals to the Delaware Depository Service Company (DDSC), one of the most reputable precious metals depositories in the United States. The assets are stored in vaults, designed, and maintained as per the Bank Protection Act and UL standards.

gold coins for gold ira

 

What Gold Coins and Precious Metals Are Acceptable for IRAs?

Not all gold bullions and coins can qualify for IRA. Whether you are interested in investing in gold only or want to include other precious metals in your portfolio, it is good to know what the IRS accepts as per their standards.

The metals you want to include in your retirement portfolio will have to fit IRS standards. For example, gold must be .9950 pure, platinum and palladium must be .9995 pure, and silver must be .9990 pure.

Here is a detailed list of what your IRA account can include:

Gold 

  • American Eagle coins
  • Bullion bars produced by the National Government Mint
  • Uncirculated gold Buffalo coins
  • PAMP Suisse bars
  • Canadian Maple Leaf coins
  • Austrian Philharmonic coins
  • Australian Nugget/Kangaroo coins

Platinum

  • American Eagle coins
  • Bullion bars produced by the National Government Mint
  • Isle of Man Noble coins
  • Australian Koala coins
  • Canadian Maple Leaf coins

Palladium 

  • Bullion bars produced by the National Government Mint
  • Canadian Maple Leaf coins

Silver

  • American Eagle coins
  • Bullion bars produced by the National Government Mint
  • Mexican Libertad coins
  • Canadian Maple Leaf coins
  • Australian Kookaburra coins

While the IRS accepts these precious metals, some won’t meet their standards. These include collectible coins, and the Austrian Corona, Belgian Franc, Dutch Guilder, Hungarian Korona, Italian Lira, Mexican Peso, and Swiss Franc.

three 1 oz fine gold coins

 

Gold IRA vs. 401(k): What’s the Difference?

A 401(k) is an employer-sponsored retirement option that allows you to contribute a certain amount each month, quarterly, or annually. The payout you will receive during your retirement period will be defined based on the current market value.

Anyone who works for a company that offers (401)k as a saving option may consider it for retirement. The employer will match your 401(k) contribution up to 6%.

Both gold IRAs and 401(k)s provide tax benefits, and you may contribute to both options simultaneously. The main difference is that individuals open IRAs (through banks, investment companies, or brokerage agencies) while employers open 401(k). IRAs offer more investment options, such as investing in gold coins, bullions, or gold stocks, while 401(k)s have higher contributions per year.

A gold IRA could be a good option if you want to play it safe, want access to a more extensive selection of investment possibilities, and prefer tax-deductible contributions. If you would like to make tax-free withdrawals in the future and aren’t eligible for deductions, a gold Roth IRA might be a good option.

If you prefer your employer matches and want higher contribution limits, a 401(K) is a better choice. For those who don’t mind paying additional taxes during a withdrawal, consider a traditional 401(k).

It is good to think about your retirement plans when comparing the options. The requirements differ for each plan, and your income may affect how much you can save for your retirement.

Investing in your financial future is a challenging process, requiring knowledge and experience. However, you don’t have to do it alone. Talking with an investing expert from Oxford Gold Group can help you determine your goals and decide what is best for your financial goals.

Why and How to Rollover Your 401(k) to a Gold IRA

Whether you are in-between jobs, want to explore different investment options, or simply think that a gold IRA is a better choice than a 401(k), it is essential to understand the rollover process.

While most reasons to roll over into IRA are lower fees, more investment possibilities, and an option to open a Roth account, some people do it because of the fewer rules and estate planning advantages.

Better Communication

If you are currently working in a different company, leaving your old retirement account with your old company might not be a good idea. In some cases, the owners of such accounts are treated as second-class citizens, which may impact your retirement portfolio. Also, it might be harder to communicate with someone regarding the plans. Having quick access to your portfolio is essential in case something goes wrong with your employer.

Lower Costs

Rolling over your funds into a gold IRA could save you a lot in administrative and management fees. There are also limited annual fees and administrative charges.

Even though your gold IRA account won’t be free of fees, you will have more control over where and how you invest and how much you will pay.

Fewer Rules

Understanding how a 401(k) works is a long process, considering that each company has different rules regarding setting up the plan. A Gold IRA, on the other hand, has fewer regulations, standardized by the IRS, that are easier to remember and follow.

One overlooked difference between IRA and 401(k) accounts has to do with rules regarding taxes. The IRS requires 20% of distributions from 401(k) to be withheld for taxes, but those who rollover to IRAs can elect to have no tax deductions.

More Investment Options

Your 401(k) is limited to a few options – mutual funds and bond funds. With an IRA account, more types of investments are available to you, including individual stocks, EFTs, and bonds. You can also buy and sell holdings anytime that is suitable for you.

Most 401(k) plans limit the buying and selling of holdings. You have a restricted number of times per year when you can update your portfolio.

Rolling over your 401(k) into a fee-free IRA account could save you a lot of money. However, the choice isn’t ideal for everyone. If you think it is the right option for you, here is how to rollover your 401(k).

Decide Where You Want Your Money to Go

When you are ready to roll over your money from 401(k) to a gold IRA, choose a bank or brokerage agency to process the request. At the Oxford Gold Group, we do all the hard work for you.

From opening accounts to transferring funds, we can guide you through the rollover process, help you upgrade, and maintain your retirement portfolio.

Decide What Type of IRA You Want

You will have to decide what type of gold IRA is best for you – traditional, Roth, or SEP. Next, determine whether you want your funds invested in coins, bullions, or stocks.

If you have a hard time deciding on the type of IRA and the next investment steps, our highly qualified advisors can make it easy for you. We have the knowledge and experience to help each client decide what’s best for their financial future. Based on your needs, goals, and current finances, we will offer a perfect solution to match your expectations.

Transfer the Funds

After choosing your gold IRA account, you will have to transfer the funds. We can arrange for a direct transfer, where the funds are sent from your 401(k) to your IRA account. The money moves from one trustee to another without any receipt. It is the fastest type of transfer and is 100% tax-free.

gold bar vault

How to Withdraw Money From Your Gold IRA

If you are 59 ½  or older, you can withdraw money from your gold IRA account without fees or penalties. The IRS doesn’t require you to withdraw from your account until you reach 70 years. However, depending on the type of IRA you have (traditional, Roth, or SEP), you may be taxed during the withdrawal.

Before you start the withdrawal process, it is good to consult with a tax advisor to instruct you regarding your situation. At the Oxford Gold Group, we advise our clients on how to avoid unnecessary taxes or penalties and inform them of the specific withdrawal rules.

If you want to withdraw money, access your IRA account and select “Transfers.” Choose the amount, specify tax withholding, and review/confirm the transaction. Penalty-free withdrawals are completed within 60 days.

If you withdraw money from your gold IRA account before reaching 59 ½, you will have to pay taxes and penalties. Taxes vary depending on the type of account, your age, and other factors.

In terms of penalties, you will be subject to a 10% early withdrawal penalty.

Besides taxes and penalties, an early withdrawal might impact your Medicare premiums. People with modified gross incomes (over $80,000) will have to pay additional premiums for Medicare and drug coverage.

Some people qualify for an exception to the withdrawal penalties, which include:

  • Terminal illness
  • Tax payments
  • Medical expenses
  • A disability/condition leaving you unable to work
  • Home purchases (for first-time buyers only)
  • Higher education expenses
  • Health insurance (if currently unemployed)

The money you invest in your gold IRA should be money you plan for your retirement. However, life can be unexpected, and you might have to consider withdrawing some or all of your saved money. If you consider this option, learn the rules regarding taxes and penalties and avoid paying extra to the IRS.

Diversify Your Assets with Gold IRA

Taking control of your retirement portfolio is easier than ever. By opening a gold IRA account with the Oxford Gold Group, you will be motivated to make your own decisions and select IRS-approved coins and bullion bars to invest in your future.

Whether you are looking to transfer funds from a 401(k) to more secure options, transfer from traditional IRA into gold IRA, or open a saving account for the first time, Oxford Gold Group can help you avoid tax pitfalls, understand regulatory requirements, and diversify with precious metals to stabilize your portfolio.

Contact us today at 833-600-GOLD to learn more about investing in gold IRAs. Schedule a free consultation with one of our experts for reliable and honest advice.

(833) 600 - GOLD