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 flirts with daily highs, retargets 1.1900
EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.
GBP/USD remains well bid around 1.3650
GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.
USD/JPY edges up above 153.50 with all eyes on US CPI figures
USD/JPY appreciates above 153.00 but remains on track for a 2.4% weekly loss. Trading volumes remain subdued on Friday, ahead of the IS CPI release. The Yen remains supported by hopes of a stable government and calls for further BoJ tightening.
Editors’ Picks
EUR/USD: Yes, the US economy is resilient – No, that won’t save the US Dollar Premium
Some impressive US data should have resulted in a much stronger USD. Well, it didn’t happen. The EUR/USD pair closed a third consecutive week little changed, a handful of pips above the 1.1800 mark.
Gold: Metals remain vulnerable to broad market mood Premium
Gold (XAU/USD) started the week on a bullish note and climbed above $5,000 before declining sharply and erasing its weekly gains on Thursday, only to recover heading into the weekend.
GBP/USD: Pound Sterling remains below 1.3700 ahead of UK inflation test Premium
The Pound Sterling (GBP) failed to resist at higher levels against the US Dollar (USD), but buyers held their ground amid a US data-busy blockbuster week.
Bitcoin: BTC bears aren’t done yet
Bitcoin (BTC) price slips below $67,000 at the time of writing on Friday, remaining under pressure and extending losses of nearly 5% so far this week.
US Dollar: Big in Japan Premium
The US Dollar (USD) resumed its yearly downtrend this week, slipping back to two-week troughs just to bounce back a tad in the second half of the week.
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