With growing concerns over an upcoming recession, stock market crash, and increasingly high inflation rates, many savvy investors are looking to precious metals as a safe way to protect their wealth during tough economic times. One way investors can hedge against inflation and a stock market crash is by rolling over their 401(k) into a gold IRA plan.
What is a gold IRA?
A gold IRA is a self-directed individual long-term retirement account that allows an investor to purchase gold bars and coins. A custodian must hold possession of the precious metals on behalf of the individual investor. What’s interesting with a gold IRA is that you can also purchase approved silver, platinum, and palladium bullion. All precious metal purchases must fall under IRS fineness requirements. The IRS has a list of approved coins featured down below.
Why gold?
For thousands of years, gold has proven to be one of the most stable assets you can invest in. Gold is viewed as a hedge against inflation. As fiat currencies lose strength, gold continues to gain tremendous value. Moreover, gold is a scarce asset that is highly liquid, which makes it even more lucrative.
Selecting the right gold IRA
Opening a gold IRA is very easy. First, you will have to select a reputable IRA company to fund your account. Some gold IRAs offer services for managing portfolios and taking custody of physical gold. If an IRA does not serve as a custodian, you will need to search for an IRA-approved depository. Approved depositories provide customers with added security since these institutions provide unmatched protocols to protect your assets.
How to rollover your 401(K) to a gold IRA
As soon as your account is ready to fund, contact your 401(k) managing company and start the rollover process. You can withdraw the funds through an indirect rollover, which allows you to receive the check for the amount requested and then deposit it to your new fund. Note, you will have a 60 day grace period for you to transfer funds without receiving a 10% early withdrawal penalization and taxes.
Another option you can choose is a direct rollover which initiates a transfer directly from one institution to the next. Comparatively, this is a safer and more convenient alternative than an indirect rollover. After your gold IRA account receives the transfer, the rollover is complete and you can now securely purchase gold. Only specific bullion items are authorized for an IRA-Account, including some popular high-quality coins and bars. Pick your desired gold, silver, platinum, and palladium products from the IRA-Eligible list and the dealer will supply the custodian with the selected metals.
Conclusion
Hedging your portfolio against inflation and a serious economic downturn with gold can be a great option for protecting your retirement assets. If you are worried that a stock market crash could deplete your 401(k), rolling over your funds to a gold IRA might provide the security you will need to enjoy your retirement.
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Editors’ Picks
EUR/USD faces next resistance near 1.1930
EUR/USD has surrendered its earlier intraday advance on Thursday and is now hovering uncomfortably around the 1.1860 region amid modest gains in the US Dolla. Moving forward, markets are exoected to closely follow Friday’s release of US CPI data.
GBP/USD inching closer to 1.36
The Pound Sterling edged higher to 1.3640 on Thursday, recovering from an earlier pullback after stronger-than-expected US jobs data initially weighed on the pair. The Bank of England held rates at 3.75% at its February 4 meeting in a narrow 5-4 vote split, with four members preferring a 25 basis point cut to 3.50%.
USD/JPY sinks back below 153.00 as undaunted Yen continues to climb
The Japanese Yen strengthened past 153 per US Dollar on Thursday, rising for the fourth straight session after Prime Minister Sanae Takaichi's decisive general election victory on February 8 gave her a clear mandate to pursue expansionary fiscal policy. Markets are betting that her agenda of increased government spending, tax cuts, and a two-year suspension of the 8% food sales tax will strengthen economic growth and provide the Bank of Japan with greater scope to normalize monetary policy through additional rate hikes.
Editors’ Picks
AUD/USD: Some profit-taking should not be ruled out
AUD/USD has quickly faded Wednesday’s strong advance despite climbing to new multi-year highs around 0.7150 earlier on Thursday. The pair’s decline comes amid a marginal uptick in the US Dollar, while investors gear up for US CPI data and relevant Chinese releases on Friday.
EUR/USD faces next resistance near 1.1930
EUR/USD has surrendered its earlier intraday advance on Thursday and is now hovering uncomfortably around the 1.1860 region amid modest gains in the US Dolla. Moving forward, markets are exoected to closely follow Friday’s release of US CPI data.
Gold falls to near $4,900 as selling pressure intensifies
Gold price faces some selling pressure around $4,910 during the early Asian session on Friday. The yellow metal tumbles over 3.50% on the day, with algorithmic traders appearing to amplify the precious metal’s sudden drop. Traders will closely monitor the release of the US Consumer Price Index inflation report for January, which will be released later on Friday.
Ethereum investors face huge unrealized losses following price slump
US spot Ethereum exchange-traded funds flipped negative again on Wednesday after recording net outflows of $129.1 million, reversing mild inflows seen at the beginning of the week, per SoSoValue data. Fidelity's FETH was responsible for more than half of withdrawals, posting outflows of $67 million.
A tale of two labour markets: Headline strength masks underlying weakness
Undoubtedly, yesterday’s delayed US January jobs report delivered a strong headline – one that surpassed most estimates. However, optimism quickly faded amid sobering benchmark revisions.
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