1. Transfer
When you open a gold IRA or a precious metals IRA, your original IRA custodian can transfer funds directly to your new custodian on your behalf. These transfers do not require government reporting and can be made as often as you’d like without tax penalties.
Here are some types of accounts that are eligible for an IRA transfer:
Traditional IRA
A traditional Individual Retirement Account (IRA) allows you make pre-tax or tax-deductible contributions and earn tax-deferred growth. The IRS sets a limit on how much you can contribute each year, but you don’t pay taxes on any funds until you retire and are eligible to take distributions. This could be a smart choice if you think your tax rate will be lower in retirement.
Roth IRA
With a Roth IRA, you pay income taxes before contributing it to your account, and then any distributions after you retire are tax-free. This is often considered a good choice for those who expect to be in a higher tax bracket in retirement.
SEP IRA
A Simplified Employee Pension Plan IRA (SEP IRA) is a traditional IRA set up and funded by an employer for its employees. Annual contributions cannot exceed the lesser of 25% of an employee’s pay or $58,000 in 2021, and the employer must contribute equally for all eligible employees.
SIMPLE IRA
The Savings Incentive Match Plan for Employees (SIMPLE) IRA plan combines the SEP IRA and traditional IRA rules, allowing both employer and employees to contribute to a traditional IRA set up for employees. These plans are generally meant for small business employers not currently sponsoring a retirement plan.
2. Rollover
You can roll over your 401(k) balance or other qualified retirement plan into an IRA in two ways: a direct rollover or an indirect rollover.
Direct Rollover
With a direct rollover, you will request your plan administrator to move your funds from one retirement account directly into an IRA, and you will never touch the funds. No money is withheld for taxes.
Indirect Rollover
With an indirect rollover, you become the go-between from your existing account to your new self-directed gold IRA. You’ll withdraw retirement dollars from your old custodian, and then deposit your chosen distribution with your new gold IRA custodian. This transaction is tax-free, but only if you complete the process within 60 days to maintain the tax-deferred status of those funds. An indirect rollover can only be performed once per year.
Here are some types of accounts that are eligible for a rollover into a gold IRA:
401(k)*
A 401(k) plan is known as a tax-advantaged, defined-contribution retirement account. Sponsored by an employer, a 401(k) allows both employers and employees to contribute. Employee contributions come out of each paycheck at a level of your choosing, up to an annual maximum. Like with IRAs, 401(k) contributions can be made either on a pre-tax basis (traditional) or post-tax basis (Roth), depending on the plan(s) offered.
TSP*
A Thrift Savings Plan (TSP) is similar to a 401(k) but is specifically for federal employees and members of the uniformed services. Participants choose from six different funds and can make either tax-deferred contributions or after-tax contributions. A limited amount of contribution matching is also provided.
457(b)*
Available to employees of state governments, local governments, and some nonprofit employers, a 457(b) plan is a type of non-qualified, tax-advantaged, deferred compensation retirement plan. A selected level of pre-tax income is withheld from each paycheck and allowed to compound without being taxed. Taxes are paid when the money is withdrawn.
403(b)*
tax-sheltered plan, the 403(b) plan is available for certain employees of public schools and tax-exempt organizations, including doctors, librarians, teachers, and ministers. Options offered in 403(b) plans include mutual funds and annuities. Similar to a 401(k) plan, both employees and employers can contribute up to a certain annual limit. Traditional and Roth options are available.
Pension Plan*
In a pension plan, an employer is required to make contributions to a pool of funds that pays for workers’ retirements. Some pension plans may also allow for an employee to contribute part of their current income into the retirement plan. There are two main types of pension plans: the defined-benefit and the defined-contribution plans.
In a defined-benefit pension plan, the employer guarantees that a definite amount is distributed to the employee upon retirement. Since the employer guarantees a specific retirement benefit, they take on the risk rather than the employee.
While “pension plan” typically refers to the more traditional defined-benefit plan, the term can also refer to defined-contribution plans. In a defined contribution plan, employers contribute to the employee's individual account, sometimes at a set rate.
Tax-Sheltered Annuities
A tax-sheltered annuity is a retirement account that allows an employee to make pre-tax contributions. Specifically, these types of accounts are reserved for employees of public schools and tax-exempt organizations. A 403(b) plan is an example of a tax-sheltered annuity plan.
*To qualify, retirement plan must be from a previous employer or for an individual older than 59 1/2. Every plan is subject to terms and regulations.
3. Cash Contribution
If you’d like to use money from a checking or savings account to open your gold IRA, your dedicated U.S. Money Reserve IRA Account Executive can guide you through the quick and easy process of turning your cash into physical, tangible precious metals held in a retirement account on your behalf. Before making a cash contribution, you should refer to the IRS’s guidelines for the latest limits and rules.
What do ALL these options have in common?
Each and every one of the options listed is eligible for use in establishing a gold IRA. If you still have questions—don’t worry. Your dedicated U.S. Money Reserve IRA Account Executive will walk you through all of your options and decide how best to get started. With U.S. Money Reserve, opening a gold IRA is as easy as 1-2-3.
