Add Gold to your retirement
Investors become interested in Gold for a number of different reasons.
Right now the primary fears are Inflation and some kind of Global Economic Reset.
Conservative Investors seek the safety of Gold when they realize that their retirement is backed by nothing but paper assets (stocks, bonds, mutual funds) in bubble-inflated markets.
Gold is an alternative asset class providing an Inflation hedge, wealth protection, and diversity for a traditional Portfolio of stocks and bonds.
Let’s start with a quick look at the options for adding Gold to your retirement plan through an existing 401K. Buy Gold in 401K
There are a number of ways to add Gold to your retirement inside a traditional tax-preferred account like a 401K. The drawback to these Investment vehicles, however, is that they don’t provide an easy way for the Investor to take physical possession of Gold.
These are widely-available Gold-related securities:
- Physical Gold trusts like the SPDR Gold Trust (NYSE: GLD) or the Sprott Physical Gold Trust (NYSE: PHYS) (commonly referred to as Gold ETFs)
- Gold Mining stock ETFs like GDX, GDXJ, and SIL
- US-listed Gold Mining stocks (NYSE, NYSEAmerican, and NASDAQ exchanges)
- Gold Mutual funds like the Fidelity Select Gold Portfolio (MUTF: FSAGX)
See if your employer-offered 401K offers any these Gold-related options or perhaps other Precious metals Mutual funds.
Also determine if a self-directed option is available. A self-directed 401(k) may offer a broader range of Investment choices.
After exhausting the employee 401(k) options, the next tax-preferred Investment choice is a Gold Roth IRA.
Depending on your tax bracket and age you may be able to contribute to a Gold Roth IRA in addition to participating in your employer-provided 401K.
Retirement accounts and IRAs held outside of the employer-employee relationship are also eligible for conversion into Gold IRAs.
Gold IRA reviews
Before we consider specific Investment management companies and start looking at Gold IRA reviews lets recap the three ways to open a Gold IRA:
- Convert a 401K
- Rollover other retirement accounts
- Contribute to a Gold Roth IRA
Most Investors will be able to take advantage of at least one of these methods depending on their age and tax bracket.
Benefits of Gold IRA
Investors gain these obvious benefits from a Gold IRA:
- Inflation hedge
- Wealth protection through a Global Reset
- Diversification for Portfolio of stocks and bonds
A less obvious benefit of a Gold IRA is that you can take personal possession of your physical metal when you receive a distribution from the IRA.
Through the Gold IRA you can own physical Gold inside a tax preferred vehicle and then receive that Gold during your retirement (after age 59 ½ for most Investors).
Any capital gains on the Gold are taxed as ordinary income instead of automatically being taxed at the 28% rate for collectibles.
Gold IRA tax rules
The most important Gold IRA tax rule to be aware of is that you only have 60 days to complete a transfer of funds from one retirement account to another.
After 60 days the IRS will count the distributed funds as income and assess an early-withdrawal fee.
In a Gold IRA rollover the Investor never takes possession of their retirement funds so the 60-day rule is never triggered. There is no risk of being penalized for performing a rollover since the funds are sent directly from one trustee to another trustee.
In a transfer, on the other hand, the Investor takes a distribution from their existing retirement account (401K or other type) and uses that money to fund the Gold IRA.
Taking the distribution triggers the 60-day rule so the Investor is at risk until the transfer is completed.
How to move 401K to Gold without penalty
We have two options to move an existing 401K or IRA to a Gold IRA without penalty.
First, we can take a distribution from our existing retirement account and deposit those funds in the new Gold IRA account.
As long as we complete this transfer within the IRS-allocated 60 days we shouldn’t be subject to any tax consequences.
Our second option is to perform a rollover where the funds are transferred directly from one custodian to another.
Gold IRA Fidelity
The Gold IRA at Fidelity has two key benefits:
- $1,000 minimum Investment for IRAs
- No proof or ‘certified authentic’ Coins available
Many of the Gold IRA companies require a minimum Investment of $10,000 or even $15,000 so Fidelity stands out with their $1,000 minimum.
The IRS caps the annual contribution to a Roth IRA at $6,000 ($7,000 after age 50) so it is impossible to open a Gold Roth IRA at any company with a minimum Investment amount of more than $6K.
Another positive aspect of the Gold IRA at Fidelity is that the company doesn't offer any proof Coins, boxed Coins, or Coins with certificates of authenticity.
One of the questionable practices in the Gold IRA industry is selling Investors collectible Coins instead of Bullion Coins and bars. Since Fidelity doesn’t offer these overpriced products the company can’t push them on Investors.
Schwab Gold IRA
Schwab Investments doesn’t offer a Gold IRA although the company often shows up in search results for Gold IRAs.
This fact makes it easy to identify fake reviews and questionable internet marketers.
Any article or review targeting a Schwab Gold IRA is simply marketing – Schwab doesn’t offer a Gold IRA.
Vanguard Gold IRA
Vanguard has very limited offerings in the Precious metals sector.
There is no Vanguard Gold IRA although that term frequently shows up in online search results.
On the company website they cite the volatility in the commodity sector as the reason for avoiding the metals.
Investors seeking exposure to Gold at Vanguard will find that they are limited to the Global Capital Cycles Fund (VGPMX) which, according to its prospectus, deploys 25% or more of its capital in the Precious metals and Mining stocks.
Gold IRA comparison
There are any number of factors we could choose for comparing Gold IRA companies and their products.
Years in business and BBB ratings are obvious data points to consider.
Online reviews are another potential source of information, although we have to keep in mind that a non-trivial percentage of the 'reviews' we will find are simply marketing material from affiliate marketers.
In the Gold IRA comparison below we can focus on the factors that matter the most for our particular circumstances.
If our objective is to open a new Gold Roth IRA then minimum deposit is the primary factor to consider.
If we are risk-adverse then the number of years a company has been doing business or their BBB rating may become the primary decision-making factors.
In any case, do your due diligence and consult with the appropriate financial professionals before putting your hard-earned money at risk.
Gold IRA | Year founded | BBB rating | Proof Coins | Minimum Investment |
|---|---|---|---|---|
Fidelity | 1946 | C- | No | $1,000 |
Patriot Gold Group | 1990 | A+ | Yes | $15,000 |
Birch Gold | 2003 | A+ | Yes | $10,000 |
Goldco | 2006 | A+ | Yes | $25,000 |
Regal Assets | 2010 | unrated | Yes | $10,000 |
Noble Gold | 2017 | A- | Yes | $2,000 |
Conclusions
A Gold retirement account can provide multiple benefits for Investors:
- Wealth preservation across a Global Economic Reset
- Hedge against Inflation
- Diversification for a Portfolio of stocks and bonds
Investors can setup and fund a Gold IRA by rolling-over or transferring existing retirement accounts. A Gold Roth IRA can be established with a direct contribution of post-tax income.
Tax consequences are easily avoidable and the risk of overpaying for metal is minimized by sticking with Bullion bars and Coins.
If you need help reach out to one or more of the Gold IRA companies. All of them have knowledgeable representatives who can help you add Gold to your retirement account.
Bryan V Post is a California-registered Investment Advisor Representative specializing in the Precious metals.
He is the founder and CEO of Satori Traders LLC, a California-registered Investment Advisor.
Bryan has worn numerous hats during his life:
Engineer, Portfolio manager, Precious metals Investor, Technical analyst, Proprietary trader, Swing trader.
https://satoritraders.com/precious-metals/gold/ira/retirement/
