I’ve been answering a lot of questions about Gold IRAs recently. In fact, I’ve even dedicated a whole article to rounding out the pros and cons of precious metals. After I wrote that article, some people started asking about how to rollover their existing accounts.
Because it can be a complicated process, I’ve sat down and come up with a detailed checklist you can follow to convert your traditional or Roth IRA into a Gold IRA. Remember, everyone’s finances and investment decisions will be different, so make sure you’re keeping your retirement goals in mind.
Steps–Starting at the Beginning
Chose a Gold IRA Company
This part can be the most time-consuming, and that’s okay. You don’t want to have to make these sorts of moves a lot of times. If you don’t know where to start, I have an article about the 5 Best Gold IRAs that can answer a lot of your questions.
All of the companies I recommend can help you convert your IRA, either in a rollover or a transfer.
Contact Your Current IRA Manager
Every IRA, 401(k), or other retirement account has a manager or administrator. For instance, if your IRA is handled through a large firm, your particular account can be accessed by calling them and asking to speak with the person administering your account.
When you call, make sure you are firm with them that you want to start the process of transferring or rolling over some or all of your IRA funds. They are legally bound to allow you to move funds, so don’t let them pressure you to leave your money with them.
While you’re on the phone with your IRA manager, make sure you ascertain two important things: whether you are transferring or rolling over; and is your IRA a traditional or Roth account.
Also, make sure you’re clear about how much you want to transfer. Your IRA may have an account minimum, and this will help you decide if you’re moving all or only some of your funds to a Gold IRA.
Rollover or Transfer?
It’s important to know whether you’re transferring an IRA or rolling one over. This is especially important because if you’re doing a “rollover,” then your IRA will mail you an actual check that you must deposit into another approved IRA within 60 days.
Transfer: You won’t need to handle any money. Fill out the paperwork with your current IRA identifying your chosen Gold IRA company.
Rollover: If you have not selected a new Gold IRA company, then you’re going to be “rolling over” your funds, which means your current administrator will be cutting you a check for a specified amount, and then you are in the IRS’s 60 day window to reinvest it, or face penalties.
Fill Out the Necessary Paperwork
Yes, this process does require paperwork. Once you’ve assessed your assets and goals, researched and picked a Gold IRA company, your current IRA administrator will send you the proper paperwork to transfer or rollover whatever amount of money you want to convert to a Gold IRA.
When filling out this paperwork, make sure you’re in constant communication with your Gold IRA manager and your current one. If you’re transferring from a Roth IRA to a Roth Gold IRA, or traditional to traditional, you have less to worry about.
But if you’re trying to convert a Roth IRA to a non-Roth Gold IRA, or vice versa, things get complicated. Just remember to take your time.
Also, make sure you have the proper forms to report any changes to the IRS, especially Form 8606, if it applies.
Traditional IRA: In this IRA, your contributions are tax-free, but you pay taxes when you receive disbursements.
Roth IRA: In this IRA, you pay taxes on your income before you contribute the funds to your retirement account, but when you receive money in retirement, it is tax-free.
Fund Your New Gold IRA
If you had already set up a Gold IRA, as with a quality firm like Augusta, Goldco or Birch Gold Group, then your current IRA admin will send the funds directly to them. If you are rolling over your account, then you will send the check to your chosen Gold IRA company.
Important: Make sure you’re in constant contact with your Gold IRA so that you can monitor your funds.
Choose Your Gold or Silver
At this point, your transfer (or rollover) is complete. With the funds you or your old IRA sent to the Gold IRA, you can direct your investment from the comfort of your own home. After each purchase your precious metals will be shipped to a secure facility where they will be stored until your withdrawal or liquidation of them.
If you have already selected a Gold IRA company and set up your account, as I suggest, then you will only need to sign paperwork for your current IRA administrator to send money to your new account. You won’t need to handle any money.
If you have not selected a new Gold IRA company, then you’re going to be “rolling over” your funds, which means your current administrator will be cutting you a check for a specified amount, and then you are in the IRS’s 60 day window to reinvest it, or face penalties.
In this IRA, your contributions are tax-free, but you pay taxes when you receive disbursements.
In this IRA, you pay taxes on your income before you contribute the funds to your retirement account, but when you receive money in retirement, it is tax-free.
Making decisions about our retirement can be daunting. That’s one of the reasons I’m passionate about informing the public about their options. Remember, during this process you are in charge. Don’t let your existing IRA company or any prospective Gold IRA manager tell you what to do.
Just keep your goals in mind, and invest based on what you think is best.
Related: Gold IRA Statistics, What is a Gold IRA Rollover, Augusta Precious Metals Review, Birch Gold Group Review
I advise people to use the transfer process. This does a few things: it makes sure you’re never under the sixty day gun; and it can often result in quicker turnaround, making sure you can invest in precious metals as soon as possible.
No! Keep in mind that unlike an employer administered 401(k) or 403(b), the “I” in IRA means “individual.” Your IRA may have minimums for keeping your account open with them, but if you’re above the minimum you can take as little or as much as you like out to rollover or transfer.
Of course. A Gold IRA is like any other; you can either transfer, rollover, or withdraw your funds from your Gold IRA, as long as you’re following all the IRA stipulations.