Dealing with our funds for retirement can cause us a little anxiety. After all, we don’t want to make a mistake and run afoul of the IRS, or even worse, lose our money altogether.

If you’ve already decided to roll your company-backed 401k into a Gold IRA, and just want to make sure you do it penalty free, then there are three easy steps to follow to cover yourself.

1. Contact Your 401k Provider

Contacting your current 401k administrator is the first and most important step, because you will need their assistance moving forward. Getting the whole process completed on their end can take up to several months, so getting the first phone call in is key.

When you make the call, it’s important to be very clear up front about what you’re doing. Giving them all the information puts the responsibility on them to get the paperwork filed correctly.

2. Contact a Qualified Gold IRA Broker

Per IRS rules, you cannot hold the gold you’ll invest in, and you cannot purchase it yourself. You will need to find a qualified broker and find a third party custodian to hold the gold for you after the purchase.

Many brokers work directly with custodians, so we included this as one step. No matter which way you handle it, though, you need to make sure that you have these business relationships set up, because Step 3 will sneak up on you.

3. Transfer Funds Within 60 Days

If you liquidate any protected retirement account to move into another protected account, you need to have the money moved within sixty days, or you could face full penalties on all the funds.

If you’ve followed steps two and three, this shouldn’t be a problem. Many times a 401k administrator can work directly with your new Gold IRA broker to wire the funds directly to them, meaning you never have to worry about a thing. But if the two agents do not communicate directly, and the 401k manager moves the money into your possession, you will need to have Step 2 already done so that you don’t have to rush making the important decision of who will handle your money.

Sixty days to avoid massive penalties is a stiff deadline. That’s why it’s best to have Steps 1 and 2 already done before your funds are disbursed. You don’t want to be left literally holding the bag.

About the Author James Holland

James is a certified financial planner who helps retirees and pre-retirees make the most of their money. He has more than 10 years of experience in the field, and he knows how to help people plan for retirement on a budget. James also offers advice on estate planning, long-term care, and other aspects of retirement planning.

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