Many people have retirement accounts through their employer. Commonly called a 401(k), these are special, tax-deferred accounts that you can contribute to, with some percentage matched by your employer.
These accounts are a great way to build your retirement funds faster. But they also come with limitations. I’ve written extensively on reasons to start a Gold IRA, and now may be the right time for you.
In this article, I’ll walk through the reasons you might want to rollover your 401(k) to a Gold IRA, how to do it, and highlight some of the best Gold IRA companies to help you out.
Why People Leave Their 401(k)
There are a number of reasons to leave your company’s 401(k) plan, and no two people have identical situations. This article isn’t to suggest that you do leave your plan, only to show some reasons why people do.
In a 401(k) structure, you have limited options for choosing how your funds are invested. In some cases, you can’t even see what companies your money is going to support, let alone how those stocks are performing.
This reason is one of the most common of all. If you leave a company, you often can no longer contribute to that retirement account. The company is certainly no longer going to match your contributions.
Often, the upshot of a 401(k) is that your employer is matching your contributions; oftentimes, the downside is that you are paying higher fees than a traditional IRA.
Once You’ve Decided to Leave…
If you’ve looked at your options and have decided to leave your employer’s 401(k) plan, you should have a plan for what to do with the funds they send you. If you don’t reinvest the funds, there will be stiff IRS penalties.
So, step one is picking the right Gold IRA company for you.
In my research, I’ve found that one of the absolute best Gold IRA Companies is Augusta Precious Metals. A key reason for my recommendation is how committed they are to education. They’ll tell you right away if they don’t think Gold is right for you.
But there are other quality companies out there, and you should do your due diligence to ensure you’ve found the one that’s best for you and your retirement goals.
This is an important decision. The company you really like for a Gold IRA may have an investment minimum. As a note, one company I recommend, Birch Gold Group, has one of the lowest minimum investments at $10,000.
It may make sense for you to keep your portfolio diverse by keeping some or most of your money with your 401(k). Or you may decide to roll all of it over, some into a Gold IRA, and some into other investments. In either case, make sure you know your plan before going to step 3.
Every 401(k) is rolled up into a massive investment structure administered by a large firm. For instance, if you work for Jack’s Handy Jack Stands, they have contracted with a large investment company to handle all 401(k) accounts.
Within that large investment company, there will be a point person for administrating your particular account through Jacks Handy Jack Stands.
The contact information for this person should be at the bottom of your itemized deductions/contributions statement. If you have trouble finding it, contact someone in HR to help you out.
Once you’ve contacted this manager, let them know that you’d like to rollover a specific amount of your investment into an IRA. Make sure to specify that the withdrawal is for a rollover. This is important for filing your 1099 at the end of the year.
Once you’ve filled out your paperwork with your 401(k) administrator, you’ll receive the funds via electronic wire or check. Now you have 60 days to reinvest it in an IRS qualified IRA or face taxation.
I covered the nuts and bolts of setting up a Gold IRA in another article. For now, just know that it’s a smooth and easy process. One company I know, Goldco, has such a good reputation for helping folks with their 401(k) rollovers that they’ve achieved the highest customer satisfaction of any Gold IRA firm I’ve reviewed.
Once your account is set up, wire or send them the exact amount you received from your 401(k).
Once your funds are securely deposited with the Gold IRA of your choice, you can begin investing in precious metals. Step 5 may be the easiest step of all!
A lot of people get uneasy about leaving a company sponsored program, like a 401(k). And it makes sense, given that you will lose out on the contributions your company is making to match yours.
But the benefits of having more freedom and lower fees can outweigh the risks, for some people. Just make sure you’re doing what’s right for you and your future, and always watch the markets.
Related: Gold IRA Rollover, Best Gold IRA Companies, Goldco vs Augusta Precious Metals, Birch Gold Group vs Augusta Precious Metals
Every company is different. If you leave your employer, they are required by law to allow you to close that account. However, some contracts and 401(k) policies stipulate that an employee may only rollover funds if they close the account. Most companies allow partial rollovers, though, while still employed.
If you are having trouble contacting your 401(k) provider, file a complaint with your employer, the Better Business Bureau, and contact the Customer Service of the firm that handles your account.
No. Absolutely not. Once the funds are in your possession you may distribute them across as many or as few retirement accounts as you wish, as long as you do so within the 60 day window.