Types of Gold IRA Rollovers

If you have made the decision the switch to gold and precious metals and seen the potential of these alternative commodities in regard to your retirement portfolio and future funds, the next step is deciding which method of transferring these assets is best for you and starting the process of building up this new Gold IRA. This is achieved via a rollover but what exactly does this mean and what types of IRA rollovers are available to you?

The Direct Rollover:

A direct rollover is essentially another name for a plan-to-plan transfer and refers to the process of moving one set of funds, such as the cash from an existing IRA or a 401K, into the new Gold IRA. As the name suggests, the direct method is a way of doing this is the fastest and easiest because the transaction is carried out straight from IRA to IRA at your request with no need to handle the funds personally or worry about further complications, such as miscommunication or time constraints. This is often the most highly recommended method because it is seen as the most beneficial, particularly when it is compared to the following type of rollover.

The Indirect Rollover:

As you may have figured out, the indirect version of the rollover differs from the straightforward, direct one because it has additional steps. Here you are given the chance to take physical possession of the original funds and 60 days in which to redistribute it into the new Gold IRA. This idea is useful for people that need to get hold of some extra funds for an emergency or want to feel more involved in the process but it is generally seen as being a bad idea compared to the direct route because of the tax issue. The indirect method is subject to a 20% IRS mandatory withholding rule; the direct bypasses this with no tax implications.

The Partial Rollover:

Strictly speaking, the direct and indirect rollovers are the only two options that Gold IRA investors can choose between; it is simply a choice between whether or not they want to be physically involved or are happy to transfer the initial funds directly. There is, however, another element to consider and that is the concept of the partial rollover. You may be advised to completely switch to precious metals and feel the need to transfer all your existing funds but it is possible to send just part of the current fund over and broaden a portfolio instead of transforming it.

Summary:

Hopefully this introduction to the different types of IRA rollovers has shown you that not only are the two options easier to manage than you may have realized, there is also a level of control that can be retained, even if you opt for the contactless, direct approach. If you have a better idea of which option you want to take – whether you want to go down the tax free route or physically handle the funds – the next step is to contact your Gold IRA company to discuss the process in more detail and work out a plan.