Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Gold & Silver Begin New Advancing Cycle Phase - 6th May 21
Vaccine Economic Boom and Bust - 6th May 21
USDX, Gold Miners: The Lion and the Jackals - 6th May 21
What If You Turn Off Your PC During Windows Update? Stuck on Automatic Repair Nightmare! - 6th May 21
4 Insurance Policies You Should Consider Buying - 6th May 21
Fed Taper Smoke and Mirrors - 5th May 21
Global Economic Recovery 2021 and the Dark Legacies of Smoot-Hawley - 5th May 21
Utility Stocks Continue To Rally – Sending A Warning Signal Yet? - 5th May 21
ROIMAX Trading Platform Review - 5th May 21
Gas and Electricity Price Trends so far in 2021 for the United Kingdom - 5th May 21
Crypto Bubble Mania Free Money GPU Mining With NiceHash Continues... - 4th May 21
Stock Market SPX Short-term Correction - 4th May 21
Gold & Silver Wait Their Turn to Ride the Inflationary Wave - 4th May 21
Gold Can’t Wait to Fall – Even Without USDX’s Help - 4th May 21
Stock Market Investor Psychology: Here are 2 Rare Traits Now on Display - 4th May 21
Sheffield Peoples Referendum May 6th Local Elections 2021 - Vote for Committee Decision's or Dictatorship - 4th May 21
AlphaLive Brings Out Latest Trading App for Android - 4th May 21
India Covid-19 Apocalypse Heralds Catastrophe for Pakistan & Bangladesh, Covid in Italy August 2019! - 3rd May 21
Why Ryzen PBO Overclock is Better than ALL Core Under Volting - 5950x, 5900x, 5800x, 5600x Despite Benchmarks - 3rd May 21
MMT: Medieval Monetary Theory - 3rd May 21
Magical Flowering Budgies Bird of Paradise Indoor Grape Vine Flying Fun in VR 3D 180 UK - 3rd May 21
Last Chance to GET FREE Money Crypto Mining with Your Desktop PC - 2nd May 21
Will Powell Lull Gold Bulls to Sweet Sleep? - 2nd May 21
Stock Market Enough Consolidation Already! - 2nd May 21
Inflation or Deflation? (Not a silly question…) - 2nd May 21
What Are The Requirements For Applying For A Payday Loan Online? - 2nd May 21
How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part1 - 1st May 21
INDIA COVID APOCALYPSE - 1st May 21
Are Technicals Pointing to New Gold Price Rally? - 1st May 21
US Dollar Index: Subtle Changes, Remarkable Outcomes - 1st May 21
Stock Market Correction Time Window - 30th Apr 21
Stock Market "Fastest Jump Since 2007": How Leveraged Investors are Courting "Doom" - 30th Apr 21
Three Reasons Why Waiting for "Cheaper Silver" Doesn't Make Cents - 30th Apr 21
Want To Invest In US Real Estate Market But Don’t Have The Down Payment? - 30th Apr 21
King Zuckerberg Tech Companies to Set up their own Governments! - 29th Apr 21
Silver Price Enters Acceleration Phase - 29th Apr 21
Financial Stocks Sector Appears Ready To Run Higher - 29th Apr 21
Stock Market Leverage Reaches New All-Time Highs As The Excess Phase Rally Continues - 29th Apr 21
Get Ready for the Fourth U.S. Central Bank - 29th Apr 21
Gold Mining Stock: Were Upswings Just an Exhausting Sprint? - 29th Apr 21
AI Tech Stocks Lead the Bull Market Charge - 28th Apr 21
AMD Ryzen Overclocking Guide - 5900x, 5950x, 5600x PPT, TDC, EDC, How to Best Settings Beyond PBO - 28th Apr 21
Stocks Bear Market / Crash Indicator - 28th Apr 21
No Upsetting the Apple Cart in Stocks or Gold - 28th Apr 21
Is The Covaids Insanity Actually Getting Worse? - 28th Apr 21
Dogecoin to the Moon! The Signs are Everywhere, but few will Heed them - 28th Apr 21
SPX Indicators Flashing Stock Market Caution - 28th Apr 21
Gold Prices – Don’t Get Too Excited - 28th Apr 21
6 Challenges Contract Managers Face When Handling Contractual Agreements - 28th Apr 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

From 401k to Retirement Gold

Commodities / Gold and Silver 2013 Mar 14, 2013 - 03:13 AM GMT

By: Adrian_Ash

Commodities

Miguel Perez-Santalla writes: Just how do you go about putting physical precious metals into your retirement account...?

So I have just left a company where I had accumulated a nice amount of retirement funds in my 401K plan.

Like most people, for me a nice amount is any money that somehow hasn't gone to pay for college tuition. So I found myself for the first time in a long time needing to consider what to do with a small chunk of change.


A 401K plan is an employee-sponsored plan, where your employer often matches part of the monies you invest into your retirement savings. The money is commonly invested with a fund manager, which will offer you the ability to diversify through a choice of different types of funds they manage. This basically means you don't have to know much, and you trust the fund managers to know what they are doing. The plan of course is held in your former employer's name.

Though I do trust my former employers, I'm not so sure about the Dollar, or government bonds, or the stock market. So I decided that I would like to diversify a certain percentage of my retirement funds into physical gold. But there were no funds available to me under the 401k that directly invested in bullion. When I inquired with the fund manager, they informed me that they had another group within the company that offered self-directed IRAs. These Individual Retirement Accounts would give me more flexibility, and IRAs can also hold physical gold or silver. I would simply need to transfer the money.

That sounded good to me, as the path of least resistance. But upon further inquiry I was informed that the only gold product that my existing fund managers offered wasn't physical bullion itself, but exchange-traded trust funds backed by gold. ETFs trade on the stock market, and are a derivative product meant to follow the price of gold. They are not a direct investment into physical gold which you own outright. Instead, you buy shares in the trust, and that trust then owns gold.

This is an important point. Because putting gold into your IRA already moves it one step away from your outright ownership. To get the tax advantages which IRAs enjoy, it's your retirement fund, not you, which legally owns the assets it holds. So I really don't see the point in having someone else manage my IRA account's physical gold, and own it as well. I want my retirement fund to own it directly and have the title. Clearly, I had to do some more homework. And that of course meant asking Google.

Searching for "Self Directed IRAs", the first items I found were law firms offering to help set up a trust to create my own self-directed IRA account. This meant that I would have had to handle annual filings and reports. The cost to do this was significant as well. If I had the kind of assets where I could sit home all day and focus on where to put my money next, it may have made sense. Like most people, however, I'm too busy working at making a living to have that much time and energy to divert to managing what would in the end be like running a small business.

So I went back to the drawing board (well, Bing this time). My searches now came up with firms that offer the ability to open a self-directed IRA which they administer. Of course, no one in business will do this kind of thing for free. They do charge a fee for the service they provide. More digging and I learned there are two types of firms:

  • A trust company (also called a custodian or a fiduciary agency) is licensed and regulated by government and does pretty much everything to set up and manage your IRA;

  • On the other hand is an administrator, who works with a trust company to provide essentially the same service, but is not regulated in any way. Note that if you use an administrator, the actual title - the ownership - of your account would reside with them. All their accounts are held in an omnibus account with a trust.

The difference didn't matter too much to me. I'm confident that government isn't very good at regulating anything. But it is good at increasing the cost of doing business, without really providing a service. So when it came down to it I considered references and reputation.

As I searched on the web I noticed there were quite a few of what I would call newcomers. Of course, because a company is new does not mean they are not worth considering. But they should have references about the persons behind it in the least so you can verify the business's legitimacy. If there are no names of individuals with their background, I personally would write them off. If they are looking for me to trust them with my money they should be able to equally take the risk of offering their background to me.

Once I nailed down a few different business I wanted to work with it came down to cost and services. Cost is always important and should be considered seriously. However, the services offered are going to be something you have to live with. Be sure that they provide statements and reports. Recently, the growth of this business has pushed them to offer valuation of your investment as well. This makes life easier for those of us who are running around trying to make a living.

I finally did open an account with one of these firms. The process itself was relatively simple. The people I worked with were very accommodative and helpful in every way. In fact I had more problems moving my money out from the fund which held the original 401k than with the new company opening my self-directed IRA.

In the end, if you have decided to invest in gold or silver with your retirement money, as I have, it is not too difficult. There are many good firms that make it easy. Here at BullionVault we recently started to provide a list of both custodians and administrators that are well recognized for self-directed IRAs and work with us on a regular basis.

We cannot guarantee or recommend any one company but we offer this list of gold IRA custodians and administrators as a starting point for your own personal research. It should save you a lot of the legwork.

Miguel Perez-Santalla
BullionVault

Miguel Perez-Santalla is vice president of business development for BullionVault, the physical gold and silver exchange founded a decade ago and now the world's #1 provider of physical bullion ownership online. A fierce advocate for retail investors, and a regular speaker at industry and media events, Miguel has over 30 years' experience in the precious metals business, previously working at the United States' top coin dealerships, as well as international refining group Heraeus.

(c) BullionVault 2013

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

Adrian Ash Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in