The 401k is a type of an employer sponsored plan. It is a part of the employee compensation plan wherein the employees can save something for retirement. It is commonly known as the defined contribution plan which is somewhat the same to that of the defined benefit plan. However, the two comes with a few differences. Under the defined benefit plan, you will receive a fixed amount every month by the time of your retirement. The amount to be received will be computed based on your earnings, age, and years of employment. It is the employer that contributes for the employee. On the other hand, in the defined contribution plan, it is the employee that bears the investment risk.
In 1997, the 401k adopted the Tax Payer Relief Act and it has paved way to adding gold and other precious metals in the IRA. Aside from gold, you can also invest in silver, platinum, and palladium. Of all metals, gold is the most popular one.
Why backing your 401k with gold is a wise decision?
There are so many reasons why you should back your 401k account with gold and other precious metals. One of which is its ability to limit the amount of money that can be printed in a particular country. If the value of paper money and stocks decreases, the value of gold goes up. Therefore, if you want to secure your retirement savings, then you have to back it up with gold. You will most likely achieve financial stability by the time of your retirement if you add gold to your 401k. The value of gold goes up as time passes by. It is less likely affected by inflation. You cannot produce gold easily. It remains a limited source, which makes it one of the highly valuable metals world.
If you have an existing 401k or a company retirement account, you can just simply rollover your 401k to gold. You have to get in touch with a certified custodian as he will be the one to guide you through the rollover process. The custodian will handle your gold 401k account and will be the one responsible to storing your investment in a safety depository. It should be an IRS-accredited depository so as to keep your investment safe and secure. You should not personally handle or store your gold as it will put your investment at risk. The insurance will not cover loses just in case you personally handle your gold storage. It is strongly discouraged by the IRS.
Rollover Your 401K to Physical Gold
More Gold IRA Rollover resources: http://www.investopedia.com/articles/personal-finance/091814/gold-ira-rollover.asp