What Is a Gold IRA, Why Consider It & Can You Transfer a 401k to It?

One of the biggest responsibilities that people have during their lifetime is the responsibility of planning their retirement. We are all looking forward to a financially secure future and we all have to obtain it for ourselves. There will come a time when you will have to stop working, and you will want to remain financially independent even then, instead of having to rely on, say, some of your family members.

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Anyway, when you want to save money for your future, you will undeniably have to set up a retirement account to make that easier for you. There are a few different types of accounts nowadays out there, and you can choose among them, aiming to create the perfect portfolio and ultimately be absolutely sure that you will reach your golden age without having to worry about money at all. A lot of people, for instance, have a 401k plan, which is employer-sponsored and offered by many employers.

Then, apart from the 401k, there is, for instance, an IRA, which is also a tax-advantaged plan and which allows individuals to save money for the future by investing in different assets. Now, you must have heard about these Individual Retirement Accounts already, as well as about a few different types. The one that has probably stuck with you, as it undeniably sounds quite interesting, is the account known as a gold IRA. Sure, it sounds interesting, but you definitely don’t want to make any concrete moves towards setting up this account and investing through it if before you get a better idea about what it is, why you should set it up in the first place, as well as what you can do with your 401k if you do this.

The above are clearly some rather important questions. Clearly, you need to get your answers before taking any concrete steps toward perhaps opening this account and starting to save money with it. So, what we are going to do right now is answer those questions for you below, hoping to give you a much clearer idea on the entire concept of a gold IRA, as well as on some of its benefits, so that you can decide what you want to do. Click this to get a definition of the concept.

What Exactly Is a Gold IRA?

So, what exactly is a gold IRA? As I have mentioned above already, an IRA is a tax-advantaged account, where the actual contributions may be tax deductible. It is also worth mentioning that this is a self-funded and self-managed savings, as well as investment account. So, what is the catch when it comes to the gold IRA? What is it that’s different here?

Well, the key is in the fact that the IRA is also an investment account, through which you can buy stocks, bonds and similar assets in order to save your money that way and thus secure your future. Well, there is a twist in the gold IRA, given that it allows for some alternative investment opportunities. That is, for some alternative assets that you cannot invest in through the traditional retirement saving accounts, whether we are talking about IRAs, 401ks or any other ones.

What kinds of alternative assets are we talking about here, though? Well, you may be able to guess that already, given that the name of the account hints at it. To cut to the chase, though, we are talking about precious metals, including gold, silver and various other metals that you may find for sale. So, the gold IRA is basically the only retirement account out there that allows you to invest in these types of assets, which is precisely what it is that’s making it so appealing to a lot of people nowadays.

Why Consider Setting It Up?

Now, you have understood that this is the only account through which you can invest in gold and other precious metals. But, you still have a question here, though. Why would you even consider setting it up and thus investing in those particular assets? Are there any reasons why you should think about finally getting this account and switching your focus from, say, your 401k, to your newly established gold IRA?

Well, there appear to be a few important reasons why you may want to do this. For starters, precious metals have always been known as highly valuable assets, so it is undoubtedly no wonder that owning them is a smart move. Then, there is the fact that these assets can protect you against inflation, given that they don’t behave the same way all other assets behave during inflation. Quite on the contrary, their value gets to increase in times of inflation as well, thus keeping you properly hedged and secured.

Apart from that, there is another thing you should know. And, this is something that will definitely be mentioned whenever you find and read a good guide for a gold IRA to help you get a clearer understanding of the concept. Basically, investing in precious metals allows you to diversify your portfolio, and to do so with valuable and stable assets. Diversification is highly important, because it increases your financial security, given that you won’t be putting all your money in just one asset.

Can You Transfer Your 401k to It?

The last question you have has to do with your 401k and with the fact that you may not know what to do with it if you decide to set up a gold IRA? In other words, you are wondering if you can transfer the funds you have saved up there to your new account if you decide to set it up. Well, the good news is that you can definitely do that, through a process that’s known as a rollover, and thus get the funds you need to start investing in gold and other precious metals, aiming at securing your financial future.