Once you've made the wise move to include physical precious metals in your retirement plan, your next decision may be to choose whether you want to start fresh with a new Self-Directed IRA account, or fund your account with a transfer or rollover. This is one of the most important steps in setting up a Precious Metals IRA since funding your account makes it possible for you to secure your precious metals. We'll help you understand the key differences between these options so you can make the best decision for your retirement goals and existing accounts.
Is an IRA transfer right for me?
A direct transfer is when you directly move your retirement funds from one custodian to another. Transfers are not reported to the IRS and are not taxable, as the assets are never made payable or distributed to you, the taxpayer.
You may want to consider a direct transfer if…
- You're transferring money between retirement accounts of the same type, like one 401(k) to another 401(k), or one Self-Directed IRA to another Self-Directed IRA.
- You want to keep your assets consolidated and the process streamlined.
- You're worried about depositing your funds within 60 days, as is required for a tax-free IRA rollover.
- You already rolled over an IRA within the last 12 months but still want to make changes to your retirement accounts. A transfer may be one of your best options since you can make only one rollover from an IRA to another (or the same) IRA in any 12-month period, regardless of the number of IRAs you own, reports the IRS.
- You might make more transfers within the next year. You're free to make as many IRA-to-IRA or 401(k) to 401(k) transfers as you want.
- You don't want your activity reported to the IRS. Direct transfers are not taxable since assets aren't distributed to you, so they're not reported to the IRS.
Or should I roll with an IRA rollover?
A rollover is the process of moving your retirement funds from your current retirement plan into a new IRA, but rollovers differ from transfers in a few ways. Most notably, the funds are distributed directly to you. They are not sent from one custodian to another. It’s up to you to deposit the funds in your new IRA within 60 days. If the funds aren’t put into an IRA within this period, they must be reported to the IRS as a taxable distribution.
“Generally, a rollover is a tax-free distribution to you of cash or other assets from one retirement plan that you contribute to another retirement plan. The contribution to the second retirement plan is called a ‘rollover contribution,'” says IRS Publication 590.
An IRA rollover might be the right choice for you if…
- You want to move money between two different types of retirement accounts, like from a 401(k) to an IRA.
- You want to control how and when your money moves.
- You want to move a portion of your funds from one IRA to another, not all. Or once retired, you want to move over part of a company retirement plan to an IRA.
- You have not yet executed a rollover in the last 12 months.
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In the end, you can always start fresh!
Neither one of these options sound like the right choice for you? If you want to keep your existing retirement accounts as is or don't have an existing retirement account, starting fresh with a new IRA might be exactly what you need.
A new IRA account may be the right move if…
- You're satisfied with your current retirement accounts, do not want to make any changes to them, but still want to incorporate physical precious metals into your retirement strategy.
- You have “maxed out” your 401(k) contributions for the year but want to continue saving for retirement.
- You do not have an existing retirement account to transfer or rollover into a Self-Directed Precious Metals IRA.
Whether you're leaning towards a simple transfer, rolling over existing funds, or opening a new Self-Directed IRA account, U.S. Money Reserve can help you every step of the way. Call 1-844-307-1589 with any questions you may have about Self-Directed Precious Metals IRAs and work with a highly trained IRA Account Executive to get started today. We'll be there for you every step of the way!