When you’re talking to a financial advisor, there’s a very thin line between “meaningful communication” and “meaningless jumble of word salad.” Like, what’s the difference between an IRA and a Roth IRA? What’s the difference between a transfer and a rollover? And what exactly should you do with gold? I hope to clear up a small area of the fog today. – a Gold Rollover
Table of Contents
Transfers and Rollovers
A transfer is moving money from one IRA to another. If you have multiple IRA accounts, moving your funds between them is a transfer. There are many types of IRAs, like traditional, self directed, and Roth, so there are a lot of reasons you might want to transfer your money between them.
A rollover is different. Rollovers move money between two different kinds of retirement accounts, any kind other than two different IRAs. If you moved money from a 401(k) into an IRA, that would be a rollover.
In other words, a transfer is from an IRA to an IRA, and a rollover is literally anything else. IRA to non-IRA, non-IRA to IRA, non-IRA to non-IRA, those are all rollovers. One problem with a rollover is that, if it’s not entirely complete within 60 days, the government can charge you penalties and extra taxes. So before you even start the process, make sure you have everything you need to complete it. This website explains more.
Rollovers include starting a new investment account and moving your funds into it to start with. That’s what most gold rollovers are. Of course, moving money into an existing gold savings account is also a rollover. It depends on your needs, but many people are beginning to invest into gold when they never had before, so the brand new account is more common at the moment.
Why Gold and what’s a Gold Rollover?
Investment is seeing a new gold rush (wikipedia.org/wiki/California_Gold_Rush). The economy has been chaos recently. The COVID pandemic started the problem. COVID put people out of work left and right and also slowed manufacturing, meaning that fewer goods were available and fewer people could afford them. That caused the stock market to plummet dramatically.
Even after the pandemic, though, the chaos has continued. Supply chains have broken down, inflation is out of control, and the price of gas is through the roof. The stock market is more chaotic than it’s been since the 2008 housing crash.
These concerning events have caused more and more people to look towards investing in gold. Unlike stocks, whose value can fluctuate depending on the company and vanish entirely if the business goes under, gold is valuable as a function of its rarity. There’s only a limited volume of gold in the entire earth, and humanity isn’t gathering it very quickly.
The value of gold is relatively stable even through inflation. Gold that used to only be worth a few dollars in the days of the Wild West is worth hundreds of dollars now, not because the value of the gold has increased, but because the value of the dollar has decreased. In the same amount of time, a haircut has gone from a quarter to thirty dollars. The same tiny fleck of gold still pays for the same haircut.
In other words, gold is pretty much inflation-proof—unlike your savings in the bank account, which seem to pay for less and less every time you look in them. It’s easier for the government to print money than to print gold, after all.
It’s still subject to the basic rules of supply and demand, though. Right now, people are desperate to move their savings to the stability of gold and silver. The demand is high, but the supply doesn’t change much. That means that right now, gold is more expensive than it would normally be. It still may be worth it to shift some of your savings into the stability of gold, but just be aware that you might be paying top dollar for that stability, and keep an eye on the market and how it’s moving.
What About Rollovers?
Now we start to get into the complex legal-financial confusion. The fact is that the tangle of red tape and jargon is far too deep for a random internet blogger like me to confidently explain it to you.
In fact, people spend lifetimes learning about this. So the first step in how to execute 401k rollovers to gold is usually calling in an expert. Don’t skimp on this. Do a lot of research to make sure you’re finding the best company to manage your rollover.
Companies with a simple, easy process are a good place to start. Also look for more specific expertise, not just a generalized history. And some companies offer paid and insured shipping of your invested gold, and some don’t—for simplicity and cost savings, try to find a company that does. Speed is good too; as mentioned above, rollovers must be done within 60 days to avoid charges.
Make sure you learn everything you need to know from the place you chose to do business. The tax codes on IRAs are always complicated, but especially so for gold. The rules include that you can be taxed on a transfer that takes too long unless you’re older than fifty-nine and a half, which is an extremely strange cutoff date. If the company you’re considering doesn’t explain things to you, in a clear way that you can understand, you may want to look for a business that respects you more.
When you choose a gold company, they’ll often choose the next steps for you. For example, they might decide another company who should be the custodian of your gold. (If the gold is from a rollover, it cannot just be stored in your home.) Once you’ve chosen your custodian and invested your money, the gold, silver, or other precious metals will be delivered to the custodian.
Then it will be stored, for charges usually around $80-$150 a year. The price can be more or less depending on the company. And you can rest easy, knowing that your money is safely invested in a good place.
