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April 24, 2021

Rollover Guide to Gold IRA Investing

When you invest in a gold IRA account, you are investing in the future of your retirement. You are turning part of your retirement funds into gold, watching the value of this gold increase or decrease. Sometimes, however, you will invest in other precious metals with your gold IRA account too.

It is true that when you invest in a gold IRA rather than a traditional IRA, that you will incur higher fees. These higher fees may be worth it, as the gold may reach a higher value over time. The gold will help you overcome any inflation also. The guide we have for you below will help you feel confident when you decide to start investing in a gold IRA account.

Differences in Gold IRAs

As mentioned, gold IRAs allow you to invest in precious metals instead of the traditional funds found in a traditional or Roth IRA. These traditional funds include cash and stocks. Gold IRAs have no use for these funding types.

Gold IRA investments are relatively new as well, as this investment type was just created in 1997 by Congress. The goal was to allow for these golds and metals to be a source of financial security.

The value of gold is much more volatile than the value of cash, but overall, it has grown over time. The price for one piece in 1999 was around $250, but now, the price is around $1700, showing that growth. The rise in value may be due to how many have become interested in this investment opportunity.

Popularity of the Gold IRA

Since the creation of gold IRAs in the late 1990s, they have significantly increased in popularity. Investors who want a retirement portfolio with a variety of different investments and funding sources are those who are the most interested.

Gold IRAs did have a slow growth to get to the level of popularity that they have now, however. These accounts require a more complicated process to get started, which may be the reason for the slow rise. Many people, in the beginning, wanted to stick to what they knew rather than have to learn these complicated steps.

It was the Great Recession that occurred around the year 2008 that pushed the popularity of these investments. Record gold sales happened throughout this time, and the popularity continues to increase due to the threat of inflation that we all hear in the news.
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Tips for Getting Started

To start a gold IRA account, you will need a trustee. You will also need a place that can hold your gold, which is called a depository. After you buy the gold, you put it in the depository, and the trustee will monitor your investment.

There are several types of gold IRA investments that you can make. To start, they are available in the traditional format and the Roth format. You can also invest in the metal itself and have a physical good. Finally, you can invest in a gold company even.

When looking for your trustee and depository for physical gold, you have to make sure they are approved. The IRA also defines a certain level of quality that physical gold has to meet. If the gold does not meet these quality standards, it cannot go into an IRA account.

Finding Your People

As mentioned, you need to find a trustee to manage your gold account and monitor your gold. You can contact banks, brokerage firms, and even companies that handle loan accounts about being a trustee for your investments in gold.

Look for a trustee with the resources available to help you find a gold dealer. These resources are necessary if you are investing in physical gold. The responsibility of finding a dealer is ultimately up to you, but sometimes, these trustees and financial offices have recommendations available.

You do also need to find a broker who will handle the purchase of the gold. For any person you need through this investing journey, you will need to look over their qualifications. Ensure that they have all of the necessary licensures. Any of these companies, trustees, and depositories should also have a strong reputation among other investors.

Costs Associated with Gold IRAs

When you look up the price of gold, you will only see the going rate. There are additional costs called markups depending on the type of gold that you want to purchase. Do not worry, as you only have to pay this fee once for each type of gold.

When you set up your IRA account, you will also have to pay a new account fee. There is a required fee for working with a trustee for your IRA account. These are both one-time fees as well.

When you find a depository, you will have to pay storage fees too. These may be on a yearly or a monthly basis. Finally, if you ever close out your gold IRA, you may lose some of your investment when selling it to a dealer.
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Gold IRA Distributions

Being that a gold IRA is a retirement account, there are minimum distribution requirements. When you are 72 years old, you have to take your minimum distribution out of your gold IRA. It is important to note that this is only for traditional gold IRAs, not Roth gold IRAs.

The minimum distribution comes from the valuation of part of the gold that you have in your gold IRA account. Sometimes, however, it can be a lengthy process to get the cash valuation you need. You may end up having to sell some of your assets and gold, losing some of your investments.

If you have traditional IRAs with only cash and stock investments, you have options for this problem. You can choose to take your full minimum distribution from these other accounts rather than out of your gold IRA. Taking this distribution will help you to avoid losing profit or investments.

Self-Directed Gold IRAs

We understand that the fees associated with a gold IRA can be costly. The stress from these fees is especially present when considering the trustee and storage fees. A checkbook IRA, which is a self-directed and tax-exempt account, is an option. It can help you avoid these fees if you meet the requirements.

Since a checkbook IRA is self-directed, you do not need to hire a trustee to manage your gold and other precious metal investments. The process behind this IRA, however, is even more complicated than a gold IRA. You will have to be registered as an LLC to qualify. You will also need to have a checking account registered to a business.

If you are an LLC business owner, you can buy gold coins and hold them for your retirement in this checkbook IRA. Ensure you meet all requirements for this option as the IRS is more closely monitoring these checkbook IRA accounts.

Rollover Gold IRAs

Rollover IRAs come from moving some of your funds from your traditional or even Roth IRA to a gold account. You will still have to complete an account application for the new account though you are simply rolling over some of your funds.

You will typically receive a response to your application with 48 hours at the most. You will complete a transfer request form, and both trustees will sign the form before sending it in. The two trustees will be the one for the new gold IRA and the one for your traditional or Roth IRA.

After the funds have been transferred successfully to the gold IRA, you will be able to review the metals available for you to purchase. Make sure that you inform the account executives about the type of metals you are interested in first. Be honest about the budget you have for your investments too.
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Risks with Gold IRAs

As you and I both know, there are risks associated with any investment opportunity. The most obvious risk is that the price of gold is volatile. Its value changes on almost a daily basis, and no one knows what will happen to the value in the future.

When the price of gold goes down, it typically means that the value of cash has increased. For this reason, it may be best to still hold on to a traditional or a Roth IRA so that you have assets with both funding sources.

Other than the risk of the ever-changing valuation of gold, gold can be privy to theft. If you follow the rules and work with an approved depository, there will be insurance on your assets. The insurance covers any of the assets on your account statement. The valuation of your assets should not go over what is on your account statement.

The final risk is that sometimes there are untrustworthy trustees. They may commit fraud and steal from your gold IRA account. Look for a trustee with a solid reputation and with insurance to avoid running into this risk.

Should You Invest in a Gold IRA?

Gold is a great investment opportunity if you choose to open a gold IRA account. When the prices of gold seem to be on the rise, it is a great time to invest. Prepare yourself as this is a volatile investment. Prices will go up and down without warning at any moment.

Complete all necessary research and discuss your plans with a financial advisor before opening an IRA gold account. When choosing the team for your account, only work with individuals and companies that you can trust. When trust is present, it will ensure that your assets are always protected.

For all gold IRA questions and concerns, we recommend Augusta Precious Metals. The absolute best in gold IRA customer service.

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Nathan Rosevear

Nathan offers insights and reviews around the highest rated precious metal IRA specialists. He is an investor in gold and silver industry.
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