Gold IRA Rollovers: What You Need to Know

A person often equates his or her financial stability to his or her capability to earn income from work and to the wealth built-up over time. When an individual no longer is able to work that source of income stops. The person then lives off of the proceeds of pensions, government benefits and retirement accounts.

Retirees may have stopped working but their financial needs did not stop. To prepare for retirement people look for ways to meet their financial needs after retirement. Most people set-up an IRA to prepare for their retirement years. A gold IRA rollover is a powerful method to strengthen a portfolio.

What Is an IRA?

An IRA, or Individual Retirement Account, provides a person with a retirement fund that can be used upon retirement as a source of cash for paying expenses. IRAs that hold stocks, bonds or mutual funds are paper-based, so there is the chance those investments might be negatively affected by inflation that causes the investment to lose value over time. Inflation can reduce the purchasing power of the Dollar, buying less in the future than it might buy today.

Converting a part of your IRA to hold precious metals through a gold IRA rollover diversifies your portfolio and may give you a significant positive return when other assets are being negatively affected by a devaluing currency. There are pluses to investing in gold and other precious metals when you own them in physical form.

It can be a very good idea to rollover a portion of your retirement into a gold IRA. Owning physically held gold or silver in an IRA gives you the full tax advantages of an IRA and the protection of a diversified retirement account.

Rollover Definition

Together with platinum, silver and palladium, gold is a valuable metal that can be held in an IRA provided the form or type of the precious metal is in an IRS approved bar or coin form. Not all forms of gold or other precious metals can be placed into an IRA. Only those forms approved by the IRS are permitted. Not to worry, as there are many approved products to choose from.

To give you a clearer idea on what a ‘rollover’ is: a rollover happens when you receive the cash from an existing retirement account and then deposit that into a different retirement account within 60 days.

If you go over the 60-day period, then you could be liable to the IRS for penalties and taxes for the amount withdrawn, as it would be considered a distribution from the account. You can rollover the same funds only once every year.

A gold IRA rollover account is quite the same as a regular retirement account, but with the ability to purchase and hold physical precious metals. A gold IRA diversifies a retirement portfolio.

Why Go for Gold

There are numerous reasons gold became one of the top choices for an IRA rollover.

• Diversification – To minimize your assets’ volatility and risk, you diversify your portfolio; that’s what investing in gold will do. Gold, unlike stocks, bonds or paper, has intrinsic value. There will always be someone who’ll buy gold even in a weak economy.

• Value – Gold has maintained its intrinsic value as a store of wealth over time. It has become synonymous to wealth and is seen as a rich man’s commodity. It’s still valuable even in a crisis; hence people tend to rely on precious metals such as gold during times of financial struggle.

• Price – Gold is a good investment for the long term. Gold as a store of value is wealth insurance.

Investing in gold is a most popular method to securing wealth. This popularity is brought about by gold’s intrinsic value and strength best observed during a struggling economy. Aside from that, gold is also a commodity that’s tangible and with consistent demand.

When investors buy gold, they understand they have something of value, and they realize its intrinsic value that stays regardless of the economy’s condition. Investing in physical gold via a gold IRA rollover diversifies a portfolio that is invested in real estate, bonds and stocks that can be volatile in value and lose value quickly during an economic downturn.

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