The USA congress created IRA and 401K plans to help citizens privately plan their post retirement financial needs. Many employees in the United States exclusively relied on benefits from the social security upon their retirement. However, this changed in 1974 with the introduction of ERISA law which effectively changed retirement plans to Direct Contribution (DC) plans from Direct Benefits (DB).
When should you consider 401k to Gold IRA Rollovers?
If you are interested in a 401k to Gold IRA rollovers guide click that link for the best information on the net. If you have already set up a retirement plan such as the 401K but with funds in it. The congress originally created the 401K as an executives’ tax dodge around 30 years ago. Initially it wasn’t meant to be the primary Americans retirement vehicle but within the last twenty years it has turned into one. Furthermore, workers were not eligible for it at its start. It was only executives who tried shielding some of their incomes from the regular tax at the right time. They were able to put it at a place where the government would not tax it.
The major problem with the 401K is that the closer you are to retirement the lesser choices you can make and the higher the chances of losing more money. What has happened is that people who had few hundred thousand dollars in their 401K account around ten years ago and had the standard investment alignment, have less than that amount today. And therefore, most individuals who are going into their retirement are going with very little amounts in their accounts. Most of them are also forced to work past the retirement age. As a matter of fact, in the 401K there is a quirk which is the more closer you get to retirement the more likely you are to lose money incase the stock market comes down. This will happen if you are only putting a little money in your account.
Converting your 401K account into gold backed 401k account
The conversion of a 401K account into a gold backed 401 account is something easier. The conversion method exposes you to the precious metal without putting down any money. This conversion also highly depends on your current situation. If you have an ex-employer 401K account, you can rollover the funds into a self-directed IRA mostly referred to as the traditional IRA. The traditional IRA will offer you a chance to purchase Gold or any other precious metal with the money you will have deposited within 60 days into this account.
The process involves:
• Setting up a gold IRA account with trusted brokers or custodian.
• Funding the account with rollover funds not less than 401K.
• Executing a trade which involves buying the precious metals.