There are a lot of questions facing us when it comes to jobs and retirement. Whenever we make a move, from one job to another or from one retirement account to another, we face even more questions.
If you already have a 401k and are interested in converting it into a Gold IRA, there’s good news: you have the complete freedom to do so. But there are a few steps you need to follow, first.
First and foremost, if you’re trying to move your 401k funds you need to contact the administrator of your current 401k to begin the process of transferring your 401k into a private, self-directed IRA. If you’re still with the employer with whom you had the 401k you may have some additional hurdles due to your employment status.
The second thing you need to do is find out if your 401k is a pre-tax or Roth 401k. This matters because it will influence how easily you can move your funds into a traditional Gold IRA or a Roth Gold IRA.
One rule of thumb is that it’s easier to move between accounts with similar tax requirements. If you have been contributing to your 401k without a tax penalty, it will generally be easier to move to a traditional Gold IRA. If you’ve had a Roth 401k, it is generally easier to move to a Roth Gold IRA.
If you’re not sure which account you have, your 401k administrator will be able to tell you. And once you decide to transfer over to a Gold IRA, your advisor for that account will help you decided which type of account is best for you.
The third thing to remember is that you must make your transfer within 60 days, or the IRS may count your liquidation of your 401k as an early withdrawal, and you could face heavy penalties.
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