Simple Step-by-Step Gold IRA Rollover Guide (2023)

If you’re anything like me, you’ve dreamed for many years now of a peaceful retirement and passing your wealth down to future generations. 

In that case, it’s understandable if you’ve become increasingly apprehensive.

The market’s on pace for its worst year since 2008; the average 401(k) plan is down about $34,000 in 2022 or 25%, while retirement accounts, in total, have lost $2.1 trillion. 

The worst part? Things could get worse from here. 

U.S. productivity suffered its weakest first half on record. Inflation remains stubbornly hot, and The Fed has zero interest in stopping its rate hike rampage.

Not to mention, there’s a looming threat of nuclear war not seen since the 1960s. 

There’s a reason why 63% of economists surveyed by The Wall Street Journal predict a recession, and 98% of surveyed CEOs believe a recession will come in the next 12 to 18 months.

Yet while you may sit here fearful of your 401(k) or IRA’s future, you can protect yourself today from storm clouds tomorrow. Consider rolling over a portion of your retirement savings into a gold IRA. 

We put this brief guide together for you, explaining the benefits of a gold IRA and why now is the opportune time to do a rollover. We also detail how to properly accomplish a rollover while avoiding IRS penalties. 

Thankfully, it’s fairly easy to do when working with the right companies.

What is the Difference Between a 401(k), IRA, and Gold IRA? 

401(k)s and IRAs are two types of retirement accounts. While similar and often used interchangeably, they have one big difference. 

401(k)s are employer-sponsored retirement accounts. On the other hand, anyone can set up an IRA (individual retirement account) through a bank, investment company, online brokerage, or personal broker.

Traditional vs Roth IRA

There are different types of IRAs also. With a Traditional IRA, you can invest pre-tax dollars. Your money will grow tax-deferred, and withdrawals are taxed as ordinary income after the  age of 59 ½. 

A Roth IRA is a tax-advantaged retirement account in which you can invest after-tax dollars. Your retirement money grows tax-free, and you can make tax-free withdrawals after the age of 59 ½.  

What is a Self-Directed IRA?

A self-directed IRA (SDIRA)  is one type of Roth or Traditional IRA that allows for a number of alternative investments outside of the typical stocks and bonds you’ll find through most 401(k) or IRA custodians. 

A self-directed IRA allows you to hold precious metals, cryptocurrencies, real estate, private businesses, and a number of other unique investments within your tax-advantaged retirement account.

So what is a Gold IRA?

A gold IRA is a self-directed retirement account that holds physical gold in the form of IRS-approved bullion, bars, and coins.  

One thing to consider, though, is the same contribution limits for a traditional or Roth IRA apply to a gold IRA. Gold IRA restrictions fall under IRA rules for self-directed IRAs. You can contribute up to $6,000 per year if you are under 50 and up to $7,000 if you are older.

What is a Gold IRA Rollover?

A gold IRA rollover transfers funds from your 401(k) or IRA to a gold IRA. You are simply moving funds from one retirement account to another. This process enables you to protect your retirement account by purchasing and holding tangible, physical gold.

You can avoid penalties when completing a gold IRA rollover since it’s considered a transfer between retirement accounts, not a withdrawal.  

It’s always possible to directly buy gold bullion bars or coins with cash. However, if you do it this way, you won’t be able to hold it in an IRA. There are simply too many IRS requirements regarding storage and the step-by-step process of purchasing gold for an IRA account. 

When you roll an existing retirement account over to a gold IRA account, you don’t have to worry about that. 

There may be other costs associated with rollovers. For example, you may have to pay a fee to your financial advisor or the company administering your 401(k) plan. You may also have to sell your stocks and bonds to purchase gold, so you could also experience a loss.

Consider working with a professional retirement planner if you want to further evaluate your options.

Why Should You Do a Gold IRA Rollover?

Holding physical gold in an IRA is a great way to diversify a stock-heavy retirement account.

Many believe precious metals protect your portfolio against inflation and global turmoil. At the same time, physical gold is considered an investment that keeps its value and grows over time while paper assets depreciate.

A gold IRA can offer better potential returns, safety, and security than a 401(k) or traditional IRA. Especially when we’re in this kind of economic environment.

Moreover, gold IRAs are one of the most tax-advantaged retirement accounts in existence. 

Now is the opportune time to consider rolling over your 401(k) or traditional IRA into a gold IRA. Because of gold’s following properties, fleeing to safety and protecting your nest egg has never been as urgent. 

Diversification Against Risk

Diversification is integral to long-term, intelligent investing and managing risk. You can particularly see the benefits of diversification in times of market turmoil. 

When you diversify your retirement funds with gold, you limit your downside and position yourself for higher long-term returns.

Here’s why: Gold is inversely correlated to stocks. Traditionally when stocks rise, gold falls, and when gold rises, stocks fall. Historically, this tends to happen because investors flock to gold when stock markets or economies look troublesome.

There is a reason why gold is often called the “crisis commodity,” and why its price usually rises amid escalating global tensions and plunging government trust. 

Rolling over a portion of your retirement savings to a gold IRA takes portfolio diversification to another level by adding an insurance policy to your nest egg.

A Tangible Store of Value

According to Reuters, gold has protected investors from volatile asset prices and currency debasement for years. That’s because gold is tangible, a scarce, finite resource, and has maintained its store of value for thousands of years. 

In other words, because gold’s shelf life is essentially perpetual, it is considered the safest way to pass on and preserve wealth from generation to generation.  

The government thinks you can just print yourself out of economic gloom, but that’s not the case. Paper currencies do not have intrinsic, tangible value. Currency debasement is very real, and we see it before our eyes with the British Pound and the Euro at their lowest values in decades.

Yet the dollar is not immune. As Warren Buffett’s right-hand man Charlie Munger said, “Over the next 100 years, the currency (USD) is going to zero.”

Consider the severe erosion of Americans’ purchasing power as inflation skyrockets. Wages have been unable to keep up, and Americans have seen their overall purchasing power decline by roughly 4.2% since January 2021.

Moreover, bonds can default, and stocks can see their share price drop to $0. Just ask investors who held shares of Bear Stearns and Lehman Brothers.    

Physical gold will never go bankrupt and can give you considerable peace of mind if you want to protect your retirement funds.

After all, why do you think central banks always maintain vast amounts of gold reserves? Amid sanctions, frozen assets, and a plummeting ruble, why did the Russian Central Bank resume gold purchases at historic heights following its invasion of Ukraine? 

Inflation Hedging

Inflation isn’t only amplified. It could stay this way for the foreseeable future. Politicians may aim to convince you otherwise, but the numbers don’t lie. According to Deutsche Bank analysts, the threat of 70s-style stagflation grows by the day.

When stagflation happens, persistently high prices stay baked in, economic growth slows, and stocks and bonds yield negative returns.

It’s bad enough that September’s CPI figure reached 8.2%. Core inflation, which excludes food and energy, surged by 6.6% in September, its hottest figure since 1982. 

The dollars you earn today have less value tomorrow when inflation rises. On the other hand, gold hedges against this because it keeps its value and often rises.  

Eerie parallels exist today with the 1970s stagflation era. Besides record-high inflation and an energy crisis, markets were volatile, politics were scandal-ridden, and geopolitics had a looming cloud of nuclear war risks.

Looking at history, there was even one day in 1971 where the price of gold nearly tripled. 

Safety and Security

With all this talk about a digital dollar replacing the U.S. dollar amid increased government surveillance, you might be increasingly uneasy about holding your retirement funds exclusively in paper assets.  

One of the best properties of physical gold is the safety and security that comes with it. Besides being a scarce and finite resource, gold is also not traceable.   

Yet beyond this, if you want to hold gold in an IRA, you’re legally required to follow strict safety and security protocols. 

When buying physical gold for your IRA, the IRS mandates that you work with an authorized custodian and store your metals in an approved depository- not your home.  

How to Properly Rollover Your Retirement Accounts to a Gold IRA

401(k) rollovers are common when switching jobs or starting an IRA. To complete a 401(k) rollover, you must first contact your 401(k) provider and request a direct (or indirect) transfer of funds. 

While the same applies when rolling over to a gold IRA, it’s important to note that several other types of retirement accounts can be rolled over into a gold IRA. This includes employer-sponsored 401(k)s, self-directed 401(k)s, and

• Roth or traditional IRAs
• Thrift Savings Plan (TSP)
• 457(b)
• 403(b)

Once you’ve chosen a gold IRA specialist (like Goldco) to facilitate your gold IRA rollover (more on this below), they can review your account and determine how to proceed with setting up a new self-directed IRA and rolling over funds to your new account. 

The IRS has strict guidelines when it comes to gold IRAs and rollovers. It does not play around regarding the gold you hold, its purity, who you work with, and storage. 

Moreover, if an indirect rollover is required, this just means the funds from your old account will be sent to you versus direct from custodian to custodian. 

The entire rollover process must also be completed within 60 days to avoid paying penalties or early withdrawal fees.

It sounds complex, but it’s really not if you work with the proper people. Here is a step-by-step guide that can help make sure you do everything correctly. 

Step #1: Work With a Reputable, All-In-One Gold IRA Provider

If you want to roll your retirement account over to a gold IRA, the IRS requires you to use one of their approved brokers, custodians, and depositories. So step 1 is to find an all-encompassing and reputable IRA provider specializing in precious metals. 

Many moving parts and regulations encompass an IRA rollover. Still, the process isn’t as complicated as it sounds if you work with a quality provider. A provider that works with IRS-compliant custodians and depositories and outstanding customer service is a must. They can help connect you to industry leaders and help select the best IRS-approved gold products for an IRA. 

Moreover, be sure that they know the dates of deadlines, the proper paperwork, and the IRS’s different rules and regulations regarding eligibility, taxation, and withdrawals. 

You never want to end up on the IRS’s radar. Their fines and penalties are not cheap.

Best Gold IRA Companies for 2022

If you’ve already begun vetting gold IRA companies, you know it can seem overwhelming to find the right specialist to facilitate your precious metals IRA. Here is a short list with some of the more trusted providers we recommend to our readers.

• Augusta Precious Metals
• Goldco Precious Metals
• Birch Gold Group
• American Hartford Gold

It’s a good idea to contact two or three providers to compare products, services, and fees. At the time of this writing, we’ve rated Augusta Precious Metals as our top gold IRA company for 2023 based on the following reasons.

• A+ rating with the Better Business Bureau – along with a 5-star rating and zero complaints filed against the company
• AAA rating with the Business Consumer Alliance – with a 5-star average customer rating based on 94 reviews
• The company has a 5-star average TrustLink rating based on 283 verified customer reviews

The gold IRA company also has a unique approach to customer education. You can request a one-on-one web conference designed by Devlyn Steele, their Harvard trained economist. In this conference, you can ask any and all questions you may have about the economy, precious metals as an investment, or the gold IRA rollover process.

Important note: Augusta Precious Metals will cover all gold IRA fees for up to ten years. Be sure to ask about this promotion if you reach out to them for more information.

Step #2: Choose the Right Custodian

IRS-approved custodians are responsible for overseeing your account and handling administrative tasks. They typically consist of  

• Banks
• Credit unions
• Trust companies
• Loans and savings associations 
• Brokerage companies.  

The best IRA providers can connect you with the best self-directed IRA custodians. These gold companies have been around for a while and can point you to a trusted SDIRA custodian to administer your investments. 

There is a long list of U.S. based self-directed IRA custodians tht specialize in precious metals. If you contact one or more of the gold IRA companies listed above, they will likely suggest one of these custodians below:

• Entrust Group
• Equity Trust Company
• GoldStar Trust
• Kingdom Trust 
• Strata Trust Company

Equity Trust Company for example, has over thirty years experience serving customers in all 50 states. The self-directed IRA custodian  manages more than $250 billion in assets and offers annual gold IRA custodial services to customers for a reasonably low flat rate of $80.

Your gold IRA company account rep can suggest a custodian, help with the paperwork in opening the new SDIRA, and act as a liaison between your old 401(k) or IRA custodian and your new gold IRA. 

Your gold IRA specialist will be with you through the entire process to ensure all goes smoothly with the rollover or transfer of funds to your new account.

Step #3: Pick Your Gold

Once you choose a custodian and fund your new self-directed account, you can start deciding what precious metals you want to buy and hold. 

Anyone can buy a gold coin directly online and hold it in a safe in their basement. However, this will not comply with IRS rules and regulations from both a purity and storage (more on that later) standpoint.

The IRS has strict rules and regulations if you want to hold physical gold in an IRA.

First, you must own physical assets minted in a sovereign state with a bank or non-bank trustee. US-accredited manufacturers must produce bars to particular standards (ISO 9000, TOCOM, LPPM, LBMA, LME, NYSE, COMEX, NYMEX).

Second, gold bullion, bars, and coins must also be produced to exact weight specifications and meet a specific purity. The IRS, for instance, requires gold in an IRA to have 99.5% purity. 

The IRS is even more strict about what coins you can own in your IRA because, in general, coins are defined as ‘collectibles,’ and ‘collectibles’ are prohibited.

Some of the following options are the best gold coins for your precious metals IRA account:

• Gold American Buffalo coins
• Gold American Eagle coins
• Gold American Eagle Proof coins
• Gold Valcambi Combibars
• Gold Canadian Maple leaf coins
• Gold Johnson Matthey bars
• Silver American Eagles
• Silver American Eagle Proof coins
• SIlver Canadian Maple Leaf coins
• Platinum American Eagle coins
• Palladium Canadian Maple Leaf coins

This above list is just a sample of what’s available for your IRA. Note that the IRS allows for physical gold, silver, platinum, and palladium products for inclusion in your gold IRA account. 

This opens the doors to a wide range of investments. Just know that you can suffer severe fines and consequences if the physical precious metals in your IRA are not IRS-compliant. 

Again, your gold IRA specialist will be there to hold your hand in selecting appropriate metals that comply with IRA tax rules.

Step #4: Store it in an IRS-Approved Depository 

Once you choose your physical gold, the next step is to find a safe, secure, and IRS-approved storage depository. Here is where an excellent all-in-one IRA provider also comes into play. 

Make sure you do business with an IRA provider with access to the best storage facilities possible. It’s even better if the IRA provider covers insurance and delivery costs.   

It is illegal and unsafe to hold valuable physical gold at home for an IRA. You want an IRS-compliant depository fully insured with physical security. 

Fortunately, there are several excellent options in the U.S. and the annual fees are modest (usually between $100-$150 annually) for the highest level of security.

If you work with one of our preferred gold companies listed above, they will likely recommend one or more of these vault storage facilities:

• Brinks Global Services
• Delaware Depository
• International Depository Services (IDS)
• Texas Precious Metals Depository

It’s my opinion that you can’t go wrong with any of these options as they’re highly rated, reputable, and secure facilities. Your metals Your best bet is probably to find the company with a depository location closest to your home.

When evaluating storage options, be sure to understand the difference between commingled and segregated storage. 

Commingled storage, while cheaper, holds various metals together from different owners. Segregated storage, on the other hand, separates individual metals from each other and by owner. Your gold will have its own designated area.  

Your gold IRA specialist can help you weigh out the pros and cons of segregated vs commingled storage. 

After you’ve chosen your metals, your gold IRA company will facilitate the secure and fully insured delivery of your investments to the vault facility of your choice. 

For example, if you work with Augusta Precious Metals on our list above, they will fully insure the secure shipment of your metals to your storage facility. While in storage, your metals are also insured via Lloyds of London, for up to $1 billion.

Make sure to ask your gold IRA specialist about all-risk insurance coverage.

Gold IRA Fees and Pricing

So what are the total fees and costs to open and maintain your gold IRA? As we’ve discussed in this gold IRA rollover guide, there are three parties involved with your gold IRA:

• The Gold IRA Company
• The SDIRA Custodian
• The Storage Depository

Gold Company Fees

The gold IRA company can facilitate the entire IRA process, but their only profit comes from the sale of precious metals. They secure your metals at wholesale price, and sell them to you at retail. This spread in the price of metals is how they make money.

If you work with a reputable dealer, they should be around to take your calls and answer questions for the life of your account, but you should not expect to pay any annual or ongoing fees for this service.

Custodial and Storage Fees

Of course, get price quotes directly from your chosen gold IRA custodian and private depository company. Prices vary depending on your chosen partners. This section is to give you a general idea of annual fees you can expect when you rollover your 401(k) to gold and other precious metals.

If you work with Equity Trust as your custodian, there is a $50 setup fee for your self-directed IRA, and a flat annual fee of $80 to administer your account.

If you choose commingled vault storage with Delaware Depository for example, you can expect to pay $100 annually. With segregated vault storage, your total annual storage costs are $150. This includes everything, including insurance on your holdings.

It’s important to again reiterate that some gold IRA companies will cover your setup fees and all annual storage and custodial fees for up to ten years. 

This eliminates the stress or worry of annual fees eating away at your overall investments. Be sure to ask about promotions, bonuses, or other current precious metal IRA offers when vetting potential gold companies.   

Conclusion

Physical gold is one of the best options to protect your retirement assets. Its properties as an inflation-hedge, a long-term store of value, a portfolio diversifier, and a protector of systemic risks are ideal for the times we’re living through. 

As inflation surges to 40+ year highs, geopolitical tensions escalate, and recession fears become a reality, rolling over a portion of your retirement account to a gold IRA could be an intelligent move. 

While the rollover process may sound daunting at first, it isn’t. Just remember to do your due diligence and work with a reputable all-in-one gold IRA specialist. The rest should fall into place from there. 

Your retirement funds are too important to gamble away with economic headwinds mounting. The potential solution is just sitting there in front of your nose.  

Gold IRAs can protect your wealth and your family’s future.

Everyone should have a portion of their wealth in precious metals, and a gold IRA is the best vehicle for that.

Get started with a gold IRA today.