How This Works & the Difference Between Transfer and Rollover
Investing in gold is among the most popular solutions for investors due to the boom in gold prices over the last few years. While the average person just reads about this and probably thinks they don't have the time to look further into the topic, if you’re ending an employment contract and you have a 401k through your employer, this topic won’t seem that far off.
The Smart Choice
Gold has a proven history of standing tall when everything else falls. This is not a strange topic to investors, and it should not be a strange topic to people that want to play safe with their retirement savings.
Gold has always been the absolute number 1 precious metal in the market, and it will most likely keep the number 1 position for years to come. Since 2001, it has risen more than 4 times in price compared to the US dollar, and experts forecast that it will keep hitting new heights.
What troubles US citizens and their retirement savings are the following factors:
- Stock market fail
- Currencies fail
- National debt
- Rising inflation
- Foreclosure rates
These, however, don't concern gold, and it will continue to hit record heights if all of the above fail. As you might have figured, the gold 401k rollover is not such a bad plan.
Paper money continues to prove how unstable it is, while gold has proven to be stable, especially in times of political and government overspending, as well as other side factors. This is why IRA rollovers are getting popular among people approaching retirement.
Now, let's dive into more details.
The Difference between Transfer & Rollover
It's a common mistake among people to think that any movement of funds is called a rollover. To make this clearer, let's define these two in the simplest words possible.
Transfer - When funds are moved from one custodian to another without you actually seeing the money.
Rollover - When funds are given to you, after which, you can make a deposit into another account.
Everything you need to know
One of the biggest advantages in a 401k rollover is that you’re able to get tax benefits. This means that the cash generated from the investment is tax-free. Another thing you should not worry about is losing the retirement income in case you lose your job. The rollover guarantees your assets are safe and secured as you have full control over your retirement account rather than your employer.
The employer-sponsored 401k plans don't offer many options in terms of investment. However, IRAs allow diversity in terms of where to put your money. This blog is about the gold 401K rollover, but there are many other precious metal options such as silver, platinum, etc. Of course, you can invest in the stock market and basically, wherever you want.
The only con in this diversity is that people may get lost or get tempted to invest in high risk/greater return ventures. However, today's topic is gold, so let's cross this off the cons list and keep on with the benefits.
Early Withdrawal Options
The IRAs offer many additional loopholes for early withdrawals, and this is awesome. We have all come to a moment when we simply need more money, and loans are definitely not an option. It could be a first-time home purchase or higher education, our retirement funds are the perfect solution if we can withdraw without penalties.
Better Investment Management
Have you ever tried getting advice from your 401k administrator? If you have, you would know that guidance and honest consultations are not on the menu. IRA advisors, on the other hand, are much more likely to give you an intelligent solution and try to figure out what your problem is. This may be a result of the wider selection of plans available with IRA, giving the advisors a much wider field of experience compared to the under-qualified 401k administrators.
Let's Wrap Up
While nobody can predict the future, some currencies are more stable than others, and if you’re ever confused, you can always learn from statistics and history. The history of gold shows stability, and when we add the 401k conversion to the topic, it makes more sense than ever. Converting a 401k to an IRA is not that uncommon, and it shouldn't be, given the fact it eliminates many of the constraints seen with the traditional programs.