In today’s volatile stock market environment, there are many investors who are looking for alternatives to more traditional investments such as stocks, bonds, and mutual funds. One financial vehicle that is being used for both its growth potential and its ability to hedge against inflation is gold.
While a majority of investors are aware that gold can be purchased as an investment, what many may not realize is that this precious metal can also be invested in via an IRA (Individual Retirement Account) account. By doing so, investors not only obtain the many benefits that their actual gold investments can offer, but also the tax advantages that can be offered by investing through an IRA.
How to Rollover Funds into a Gold IRA
The gold that is held by an IRA investor is typically a physical tangible product that is placed in a vault that is managed by the IRA custodian’s company. This storage can help in safeguarding the investment from theft or other types of damage.
One of the first steps that an investor should take when rolling IRA funds over is to ensure that the IRA rules and regulations allow for this type of transaction. If an investor’s current brokerage does not allow for such an account, the investor will need to seek out a financial company that offers self-directed IRA accounts.
Why Consider Investing in Gold?
Even though gold has had its ups and downs over time, since the United States government did away with the gold standard in the early 1970s, this metal has continued to outperform the stock market, as well as currencies and real estate.
Gold also offers a resistance to depreciation. This is due in part to its scarcity, as well as its use in products such as jewelry and equipment. In addition, the U.S. economy today still has many consumers and investors on edge. This uncertainty can actually be profitable for gold investors as the demand for gold increases when interest rates and consumer confidence are low.
How to Open a Gold IRA Rollover Account
In order to open a gold IRA rollover account, it is important to seek the advice of an IRA custodian that will provide information on how to go about converting some – or all – of the IRA investment dollars into gold holdings.
An investor can choose to open a traditional or a Roth IRA account. Many companies that specialize in gold IRA rollovers will provide the necessary paperwork directly online. This way, investors can provide the needed information quickly and conveniently.
Once the gold IRA has been opened. the investor will need to add funds to the account. When going with a gold IRA rollover, the monies will be “rolled over” from an already existing IRA account. In order to complete this arm of the transaction, the investor will typically be required to submit an IRA transfer or rollover form to the existing brokerage company that is holding the current IRA account.
When funds have been received by the gold IRA, the investor will be able to determine the type and amount of gold to be invested in. Once the purchases of gold are complete, the IRA account custodian will be responsible for holding the gold until the investor is either ready to take possession or to liquidate the gold IRA account.
The Bottom Line
Completing a gold IRA rollover could offer investors the potential for portfolio growth, along with the many tax advantages that are offered via IRA investing. Over time, gold has proven itself to be a smart yet conservative investment. This has helped to both grow and safeguard investors’ portfolios.
When investors are ready to take the next step and roll funds into a gold IRA account, it is important to research the top companies in the industry that have a focus on this type of investing.
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