What are the Rules for Rolling Over Your Government 403b Plan to a Gold IRA?
It wasn’t so long ago that people were able to make plans about their financial future. Americans put their money in bank accounts, assured by the FDIC that their money would be safe and secure. For many years, the stock market was a sure bet. If you remember the nineteen nineties, you remember a time when the national budget was balanced. A family could survive on the income from one salary, if necessary. In two thousand eight, the country saw its first recession in nearly eighty years. Suddenly, in the land of prosperity, millions of people were losing their homes. Banks were foreclosing at an unprecedented rate. As this was happening, the entire economy took a hit.
Even Americans that didn’t lose their homes were affected. They were faced with the nasty beast that is inflation. Inflation means that the money they had been carefully saving for years didn’t go as far as it used to. Everything from groceries to gas to clothing suddenly costs more. But did this mean that wages were raised to help make up the difference? No. Wages remained stagnant. It took years before the economy was able to recover. Now, as the pandemic rages on, America is still seeing the effect this has on our economy.
Just like in the early two thousand, gas prices have doubled. The price of groceries has also gone up dramatically in the last few months. All of this boils down to one thing. Many investors are hesitant to enter the market in a time of instability. But if you avoid investing, you might miss out on some great opportunities. In this article, we’re going to look at the rules for rolling over your 403b plan to a gold IRA to help you decide whether it is an investment opportunity you are interested in making.
Looking Towards the Future
Before we dive into the rules, let’s take a minute to discuss what, exactly, a gold IRA is. There are several different options when choosing a retirement plan. Many people have heard of a 401k. These are accounts, typically started by an employer. Many offer to match your own investments into your account. One of the benefits of this type of account is the opportunity for tax breaks. Any money invested in the account is considered non-taxable. For example, if you want to withdraw your money before your set retirement date, you might have to pay a fee. Your money could also be subject to taxes if you take it out early.
There are a few things the government considers valid reasons for withdrawing your money early. This includes paying for immediate housing. That means that if you were to find yourself in the position of many homeowners during the housing market crash and were suddenly without a home, you would be able to use your retirement plan without penalty. But there are other important reasons that are not covered. If you want to help pay for one of your children’s weddings, for example, you will have to pay taxes on any money withdrawn from your account.
Or maybe you have a friend who wants you to invest in their new pizza place. Even though it represents a great opportunity (you know your friend makes amazing pizza and that pizza never goes out of style), you might feel trapped by your investment account. If you are reading this article, you probably don’t have a 401k but instead, hold a 403b. The names sound different but many of the rules are the same. If you aren’t sure which you have, think about what kind of company you work for.
A 403b is the type of account provided by nonprofit employers. This includes both charities as well as government positions. Whatever the kind of account you’re starting with, it is possible to transfer the money to a new account if you so choose. After all, your money is yours to make any decision with that you see fit. A gold IRA can be an attractive option for investors. It behaves in a way similar to the 403b you already have. Both are a way to save money for the future. Click here for more information about gold IRAs.
But a gold IRA is a little different. Instead of investing in a volatile stock market, buying bonds, or simply relying on the interest from the cash in your account, a gold IRA focuses on one particular asset. That asset, of course, is gold. It could be gold coins, bars, or other forms of precious metal. This is the aspect that draws the attention of many investors. It offers them stability. They are able to invest in gold from all over the world, purchase it, and then keep it in a physical storeroom. Part of your investment in a gold IRA includes the necessary storage for your gold. This provides extra peace of mind for investors; they know that they don’t have to keep vigil over a large supply of valuables. Now let’s take a look at the 403b rollover rules to help you make the transition.
What’s the Taxation?
If you’ve changed jobs at any point, you know that you can transfer your 401k or 403b between companies or back and forth between these two types of investment accounts. The question in front of you now is whether or not that will hold true if you decide to move your money into a gold IRA. The good news is that your money will not be taxed if you choose to invest in a gold IRA. You are protected from unnecessary taxes and penalties. This means that there is a benefit to committing to a rollover instead of cashing out your current plan and then investing it into something different. This means that the time to do your research is now, before committing to any great changes. You may find that the rollover option is the right one for you.
