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401k to gold IRA rollovers – 15 Mistakes to Avoid!

A 401K to Gold IRA rollover is a good way to protect your retirement funds. Just like a traditional IRA, a gold IRA comes with the standard protections. But it comes with more than that. Throughout history whenever the economy has seen troubled times the value of gold has always skyrocketed. By investing in gold you are securing your future and the future of your family should hard times hit. Gold is still a precious metal though and whenever dealing with it you should avoid these common mistakes.

Not Doing Your Research

Doing research is key to making any kind of investment. Being informed before you go into a meeting with a dealer or a custodian can save you money because you will know when they are offering you a good deal and when they are trying to make a little extra money off of you. You will also have an idea of what kind of gold you want to invest in and how you want to store it.

Not Checking Reviews

Many people go straight into working with dealers, brokers, and custodians without first reading reviews of gold IRA companies. Reviews can be critical in determining the reliability and professionalism of a company. With today being the age of the internet there are plenty of locations to find reviews of businesses online. Yelp , The Better Business Bureau , ConsumerReports , and Google are just a few places to find online reviews.

401k to gold ira rollover

Thinking The Process Will Be Quick

A lot of things in life can be done quick, making an investment is not one of them. There will be a lot of times where you will want to cut corners to making things quicker. Don’t do it. A very small amount of corners won’t hurt you or your investments but you never know when a corner might cost you a large amount of money. If an offer looks good, consider it but research it.

Going For A Lower Quality Institution

There are plenty of lower quality financial institutions and dealers out there. They lure you in with low upfront fees and then tack on a large variety of fees. There are other shady practices that you can find so make sure that you go for a well-known institution to store your gold IRA.

Trusting The First Person You Talk To

Along the same lines as the one above you don’t want to trust the first person you talk to. When you talk to the first person any deal can sound good. It becomes easy to trust them. When you go around and talk with different representatives you get a variety of different points of view. It allows you to judge what might be a good offer and what might not.

Believing A Company That Down Talks Others

Some of the less trust worthy companies will down talk other companies in order to make themselves look better. A company that does this though is often doing it because they feel insecure about their own offerings. This doesn’t mean that a business can’t say that this is what we offer over other companies, what you are trying to avoid is businesses that name names.

Dealing With The Dealer Not The Custodian

Many people go to the internet to start looking for dealers that they can buy their gold from and want to use the recommended custodian on the dealer website. This is not a good idea. These websites tend to make backroom deals with these custodians and there are plenty of issues that pop up during the transfer process. Reliable custodians have lists of precious metal dealers that they work with regularly and would recommend.

Ordering Precious Metals Over The Internet

The internet is full of a lot of scams, a lot of gold dealers you can find on the internet are scams. People’s websites can look very confusing. Even some of the legitimate websites have issues. Orders can easily go missing and there can be delays. Some people report receiving the wrong gold from online buyers who otherwise have okay reviews. It is always best to deal with a custodian not the dealer and to deal with them in person. A custodian is motivated to get the gold or else they will have nothing for you to pay storage fees on.

Not Calculating the Expected Storage Fees Properly

With just about any kind of financial account you are going to have fees. While you will have a setup fee and an annual account fee you will also have storage fees. Most gold IRA storage fees for gold are between 8 and 12 dollars. However, if you have other assets in the same IRA account these fees will be different. IRA fee schedules dictate what those will be.

Not Taking Into Account Gold Purity

There are two common gold purities that are used for a 401K to Gold IRA rollover. The first purity is .999, at this level the gold still has a significant amount of other material in it. This other material makes the metal more durable so the storage requirements for it are far less. Gold at a purity level of .9999 is much less resilient because gold itself is a much less durable material. If you plan to purchase gold of .9999 purity you will need to plan to have higher quality storage and may cost a little extra. Don’t settle for poor storage solutions.

Waiting To Rollover

Many people decide that they can wait to rollover their money because gold will always be there. If you follow the past trends of gold though, the best time to invest would be when the economy is doing well. This means that the time at which you least think of investing could result in you having money stored up when you need it. In the reverse, the wrong time to buy gold is when the economy is doing poorly unless the prices are lower than they were before the economy started to go bad.

401k to gold IRA rollovers

Investing Too Much In One Place

There are a lot of different ways to invest money for your retirement. No matter how good you think one method is you should never invest all of your money in one basket. Financial advisors say that between 10 and 30 percent of your portfolio should be invested in gold. The exact amount is different for every person. You can always get a professional evaluation before deciding how much of your portfolio to rollover into a gold IRA.

Deciding Jewelry is Better Than A Gold IRA

A lot of people look into a gold IRA then decide that they would be better off investing in a jewelry because they can store it themselves and there aren’t any fees. Jewelry often has imperfections and it doesn’t come in uniform amounts of gold. Gold coins and bullion has a much higher return on investment, especially when played right.

Not Setting Aside Money For Taxes

While you aren’t charged money upfront on most IRA money accounts there will be taxes when you start taking out money. Granted there are less taxes if you take out money when you are the proper age, there are still taxes. By setting money aside when it comes time to pay taxes at the end of the year when you start withdrawing money you won’t find yourself surprised by a large bill.

Not Knowing The Rules

There are rules about when you can and can’t take your money out of your account. The longest you can wait to take your money out is until age 70.5. At this age you are required to take the minimum distribution. If you don’t take this amount out every year you will receive taxes that will devastate your savings. Up to 50% of your minimum distribution can be taxed for every year that you don’t take the money out.

The first time that you can start taking your money out without penalties is when you are age 59.5. Most people think that you only need to be in the year that you turn 59.5 but that is not true. You have to calculate 183 days from your 59th birthday and not a day sooner. Knowing the rules like these can help you avoid tax penalties.

You might be daunted by all of the mistakes people have made over the ages when it comes to gold IRAs but don’t let that stop you. Any financial business will have its ups and downs and you did the right thing by reading this article first. Now you know what to avoid before you come across it. You took that step that the others didn’t. You’ve made a good choice by trying to secure your future, good luck with financing your future.

PS. If you are looking for more information about gold IRA rollovers and a comprehensive step-by-step guide, we highly recommend you to fill out the form below to receive the free gold ira investment kit from Regal Assets as long as it’s available.


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