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What Is A Gold 401k?

Most of you out there have no doubt heard about 401ks and iras especially if you are one of the millions of people trying to save up for retirement but most people have no idea that there are more types out there than just a traditional & a rollover. So what is this other type of 401k & what exactly is it used for? Well, that is exactly what we’ll be going over in this piece.

So in addition to the rollover & the regular types of the 401k, there is also what’s called a gold 401k. Also referred to as a precious metal 401k, this is an individual retirement account that enables the user to put gold bullion or coins in their account; where you can do a gold 401k rollover. They can also put in other precious metals so long as they are approved by your bank.

It can also be known as a gold ira and it has to be separate from any type of traditional ira you may possess. Of course, the rules about how much you contribute or distribute does tend to vary from one bank to the next. If they want to, investors are able to open these types of iras via what’s known as a broker dealer or a custodian if they so choose.

You can set up one of these iras with dollars that either have or have not been taxed as of yet but you can only put in a certain amount per year. The IRS does let ira holders who direct themselves to buy any type of precious metals from gold to silver as well as platinum & palladium. These can be in coins, bars or any other form so long as they do get approved first. & just remember the irs will cap how much you contribute so don’t try & pull a fast one on them.

One thing you should keep in mind is the fact that this type of account typically has higher fees since it does have precious metal so be prepared to spend a bit more if you want to have one of these accounts. Unlike any of the others, you are required to have at least one piece of gold in it if you want to retain your account.

This is why you need a custodian or some sort of brokerage firm that can help you manage your savings. With your gold ira, you can invest in a lot of gold related investments & this can be anything from etfs to gold mining companies. You can also try & invest some of your funds in precious metals mutual funds or precious metals commodity futures if you are so inclined.

Although your assets may not be the same as a regular ira the rules do tend to be. What this means is you will have an annual contribution limit & you are not to exceed this. For a regular ira, this caps out at $6000 but once you get to age 50, the cap increases to 7000.

This means you can add 1000 more each year if you want & this will help you reach your retirement goals even sooner than you hoped. Now if you were wondering when you can start withdrawing from your ira, this is where it gets to be a bit tricky.

The rule tends to vary from one ira to the next but the general rule seems to be you can start withdrawing when you turn 59 & a half. If you do opt to withdraw before you reach that, there will be a 10% tax you have to pay. In some cases, the rule is 65 but it all depends on what bank you’re using & the brokerage account that you have.

One of the things you need to consider when you have a gold ira is the storage of your savings. You see, you can keep your physical gold at a facility that has been approved by the irs & this can be anything from a bank to a depository. There are also 3rd parties that can hold it for you so long as they have been approved by the irs.

What this means is no matter how much you may want to, you can not keep your gold in your own home. Much like the ira, there are different types of gold iras from the traditional to the roth to even something called a sep ira. This is usually just for small businesses or those who are self employed.

The good news is the risk of having a gold ira is pretty low so it should be pretty safe for you to open. But of course if you are thinking about getting a gold ira, you probably should consult with your accountant before doing so.

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