With gold?s historic bull market well under way, keeping a portion of one?s retirement investments in the precious metal has its attractions.? Central banks worldwide show no signs that they are about to change course any time soon and end policies designed to stimulate economic growth by increasing the supply of money (commonly known as QE or quantitative easing).? The resulting growth of the money supply typically reduces the value of currencies against hard assets like gold, making such assets an attractive store of value.
If you are interested in preserving your standard of living into retirement, assets which can help protect your purchasing power from the ravages of inflation, a role which gold has been known for over the years, may well be worth considering.
401ks and physical gold
While a good case can be made for placing a portion of your retirement savings in gold, given its long history as an inflation hedge, holding gold in physical form such as gold coins or bars is not allowed in a 401k.? What many investors aren?t aware of, however, is that it may be possible to invest part of their 401k in gold by rolling it over to either a Roth IRA or Participant IRA, thereby enabling them to experience the benefits of holding physical gold.
Establishing a gold IRA
To establish a so-called ?gold IRA? or ?gold 401k rollover,? you must first find an IRA custodian which will allow gold to be held in the account.? It should be mentioned that other precious metals, such as certain forms of silver, palladium, and platinum could be held as well.
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If the rollover is made to a Roth IRA, all applicable taxes would need to be paid on the transaction.? A rollover from a 401k to a Traditional IRA, on the other hand, is not a taxable event, as long as it follows IRS regulations.
When can a rollover from a 401k be made?
Before moving forward with a rollover, make sure that it adheres to the following rules applying to the circumstances under which 401k rollovers can be taken:
1)??? ?A rollover can be taken when an employee no longer works for the company which sponsored the 401k.
2)??? If the plan has been discontinued by the employer a rollover may also be taken.
3)??? If the employee is over 59 ? a rollover in the form of an in-service withdrawal can be taken while he or she is still employed by the company sponsoring the 401k.
Holding gold in your IRA
IRS regulations ?allow for certain types of bullion and proof coins to be held in an IRA, so once some or all of the assets of your 401k have been rolled over to a gold IRA, you are free to begin buying eligible gold investments.
Gold coins such as the Canadian Maple Leaf, American Eagle, and Austrian Philharmonic are eligible, to cite a few; as are selected silver and platinum coins.? Gold, silver, platinum and palladium bars or rounds produced by approved manufacturers can also be held, provided they are of sufficient fineness.? Acceptable fineness for gold is .995 or better; for silver .999 or better; for platinum .9995 or better, and for palladium .9995 or better.
It should be noted that to maintain the tax-favored status of an account, whatever precious metals are held within the IRA must be kept at a location designated by the custodian, and not the owner of the IRA.? While the assets are held for the benefit of the owner, it is the custodian?s responsibility to maintain physical control of them.? Before making any purchases, be sure to check with the custodian for information relating to the storage fees charged for assets of this type.
Source: http://goldsherpa.com/how-to-roll-over-part-of-your-401k-to-gold-investments/
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