Benefits of a Gold IRA Rollover

gold roth iraGold  rollovers are often a successful strategy for securing your investments from challenging economic conditions. The reasons are twofold, in that the IRA will provide you with tax advantages which investors in gold and silver do not generally receive, and clearly the reason for investing in gold to begin with is that it has reverse cyclical properties. It is recognized that the value of gold and other precious metals will rise when there is turmoil in the economy, and whenever stock prices are in serious downfall.

The initial problem you may encounter when searching for a vehicle in which to invest in gold is the limited terms which are found in a lot of IRA investments. All IRA plans will permit you to invest in stock and bonds, either directly or by way of mutual funds, and there are actually some investments such as art and antiques which are in no way allowed into an IRA. In the case of gold, there continues to be a reasonably wide selection of IRA investments which will support it. If you are looking for information on a gold IRA rollover, it should be effortlessly feasible to discover these details right at the assessment stage, and a professional will often know which investments are eligible.

As soon as you have identified an appropriate investment vehicle, you will have to be in the position to fund the investment. This is reasonably simple for people with a regular income, as the putting aside of money consistently each month is the method by which these investments were designed to be funded. There are rigid limitations as to the amount of money can be put in an IRA, and these limitations apply regardless of what your annual income may be. The only exceptions are provided to those who are getting close to retirement age, who are permitted to invest a little bit more so they can get caught up.

Retirement Accounts
The option of whether you ought to invest solely in a gold IRA is a hard one to make. With the condition of the world economy, the investment is very likely to carry on being an excellent one for a number of years to come, but investing only in gold in the long term is very likely to cause you to lose out on possibilities. You can generally move your money from one investment to another while it’s in an IRA, and this will provide you with the option of switching back into stock options should the economic situation get better.

Obviously, it is only in severe economic conditions that gold can give you any form of impressive gain, and more often than not it is treated as a survival process and a method of protecting value. This implies that you will have to combine your gold IRA rollover with alternative investments if you need to accumulate a substantial retirement fund. This can be accomplished in various ways, but one possibility is by borrowing funds for investment in other stock options. The guidelines are incredibly complex, and it will be important to operate within the IRA itself as equity in the investment can’t be used as security for external loans.

Individual Retirement Accounts
A gold IRA investment will perform most effectively as a portion of a synchronized plan for getting ready for retirement, the most significant problem for most future retirees is to ensure that their house is fully paid for. This should get much easier as time passes as inflation erodes the value of currency and tends to make the mortgage payment much easier to make. It is most effective to focus on this ahead of you making any investment into an IRA, and particularly into an IRA featuring gold as this only has a limited potential to increase in value. When your mortgage payment is protected, you can consider a gold IRA.

What is an IRA?

ira painted egg

To retire comfortably, you may need to save up to 85 percent of your pre-retirement income. Just a 401(k) may not help you accumulate significant savings and when you account for inflation, your purchasing power may drop as you settle into retirement. That’s why so many Americans are IRA account holders. If you want to know what is an IRA, read on.

An individual retirement plan

As its name implies an Individual Retirement Account is an account that you open on your own as a retirement planning solution. It is different from a 401(k) provided by your employer, where they can contribute or match your contributions. You can open an IRA at a bank, brokerage firm, mutual fund company or automated investment service. IRA providers are licensed custodians of your money, offering you a variety of investment options and imposing tax penalties on early withdrawal of retirement funds for non-allowable purposes.

How much you can contribute towards each plan also differs. For instance, the basic contribution limit for a traditional IRA is $5,500, which increases to $17,500 for a 401(k). If you’re aged 50 years or above, you’re entitled to an extra catch-up contribution of $1,000 in your IRA and a corresponding $5,500 for your 401(k).

Why open an IRA?

Now that you have an idea about what is an IRA, let’s look at why you should consider opening one.

To accumulate a significant retirement income. Funding commitments and priorities at different stages of your life – from getting married and buying a home to child birth, vacations and college expenses – will inevitably cost a small fortune. If you contribute $5,500 a year in your IRA for 30 years at a return of 5%, you would have approximately $385,000 in retirement income.

To save taxes. You can deduct your IRA contributions from your taxable earnings. Note : You are entitled to a full, partial or no deduction if you also have an employer-sponsored retirement plan.

Types of IRAs

There are a total of 11 types of IRAs, but the four popular ones are:

Traditional IRA: A regular set-up where you make contributions for tax-deferred growth and deductions on income tax returns. Tax deferrals help retirees – whose tax bracket is lower than when they were in their jobs – by taxing their money at a lower rate. It is available to anyone under the age of 70 ½ years drawing an income from a job. Withdrawals begin and are taxed when the account holder turns 70 ½ years of age.

Roth IRA: Here, you make contributions from your after-tax income for tax-free growth and tax-free withdrawals post retirement. Withdrawals are allowed only after you turn 59 ½ years of age or a penalty must be paid.

Rollover IRA: Here, you transfer funds from a retirement account from a qualified retirement plan such as a 401(k). If you have changed jobs or retired and have assets in your employer-sponsored retirement plan, you can roll over to a traditional or Roth IRA via a direct transfer or a check.

SEP-IRA: This is a traditional IRA that an employer sets up for employees. Contributions made by the employee cannot exceed the lesser of :

25 percent of employee compensation OR

$53,000 (2015 figure)

A thorough understanding of what is an IRA and the different types of IRAs can help you choose one that saves you more tax and increases your retirement savings.