With growing concerns over an upcoming recession, stock market crash, and increasingly high inflation rates, many savvy investors are looking to precious metals as a safe way to protect their wealth during tough economic times. One way investors can hedge against inflation and a stock market crash is by rolling over their 401(k) into a gold IRA plan.
What is a gold IRA?
A gold IRA is a self-directed individual long-term retirement account that allows an investor to purchase gold bars and coins. A custodian must hold possession of the precious metals on behalf of the individual investor. What’s interesting with a gold IRA is that you can also purchase approved silver, platinum, and palladium bullion. All precious metal purchases must fall under IRS fineness requirements. The IRS has a list of approved coins featured down below.
Why gold?
For thousands of years, gold has proven to be one of the most stable assets you can invest in. Gold is viewed as a hedge against inflation. As fiat currencies lose strength, gold continues to gain tremendous value. Moreover, gold is a scarce asset that is highly liquid, which makes it even more lucrative.
Selecting the right gold IRA
Opening a gold IRA is very easy. First, you will have to select a reputable IRA company to fund your account. Some gold IRAs offer services for managing portfolios and taking custody of physical gold. If an IRA does not serve as a custodian, you will need to search for an IRA-approved depository. Approved depositories provide customers with added security since these institutions provide unmatched protocols to protect your assets.
How to rollover your 401(K) to a gold IRA
As soon as your account is ready to fund, contact your 401(k) managing company and start the rollover process. You can withdraw the funds through an indirect rollover, which allows you to receive the check for the amount requested and then deposit it to your new fund. Note, you will have a 60 day grace period for you to transfer funds without receiving a 10% early withdrawal penalization and taxes.
Another option you can choose is a direct rollover which initiates a transfer directly from one institution to the next. Comparatively, this is a safer and more convenient alternative than an indirect rollover. After your gold IRA account receives the transfer, the rollover is complete and you can now securely purchase gold. Only specific bullion items are authorized for an IRA-Account, including some popular high-quality coins and bars. Pick your desired gold, silver, platinum, and palladium products from the IRA-Eligible list and the dealer will supply the custodian with the selected metals.
Conclusion
Hedging your portfolio against inflation and a serious economic downturn with gold can be a great option for protecting your retirement assets. If you are worried that a stock market crash could deplete your 401(k), rolling over your funds to a gold IRA might provide the security you will need to enjoy your retirement.
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Editors’ Picks
EUR/USD climbs to daily highs near 1.1820
EUR/USD now picks up pace and advances to the area of daily peaks north of the 1.1800 barrier at the end of the week. The pair’s decent move higher comes against the backdrop of a generalised lack of direction in the FX galaxy and the mild offered stance in the US Dollar.
GBP/USD trims losses, retests 1.3460
After briefly challenging its key 200-day SMA near 1.3440, GBP/USD now manages to regain some balance and revisit the 1.3460 zone on Friday. Cable’s pullback comes as the selling pressure on the Greenback gathers traction, reigniting some recovery in the risk-linked space.
Japanese Yen gives back half of early gains against USD ahead of US PPI data
The Japanese Yen (JPY) surrenders half of its early gains against the US Dollar (USD) during the European trading session on Friday. The USD/JPY pair rebounds to near 155.90 as the JPY falls back, but is still 0.15% down.
Editors’ Picks
EUR/USD: Fed calm, ECB steady, but the Dollar still leads Premium
EUR/USD is still struggling to find real traction. The pair has tried to stabilise, but momentum keeps fading, leaving the door open to further weakness.
Gold: Falling US yields, geopolitics help XAU/USD hold ground Premium
Gold (XAU/USD) gained traction and climbed above $5,200, ending the fourth consecutive week in positive territory. The next round of US-Iran talks and crucial macroeconomic data releases from the US will be watched closely by market participants in the short term.
GBP/USD: Will Pound Sterling defend key 1.3450 support ahead of US jobs data? Premium
The Pound Sterling (GBP) entered a bearish consolidation phase against the US Dollar (USD), after having tested critical support near the 1.3450 level on several occasions.
Bitcoin: Another month of losses, and it’s been five
Bitcoin (BTC) price is stabilizing around $68,000 at the time of writing on Friday, but the Crypto King is poised to close February on a fragile footing, marking its fifth consecutive month of losses since October and a rare start to the year with back-to-back monthly corrections.
US Dollar: At a crossroads; Fed steady, tariffs in flux Premium
The US Dollar’s (USD) upward momentum from the previous week seems to have encountered a tough nut to crack in the 98.00 region, as measured by the US Dollar Index (DXY).
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