Gold IRA vs Gold 401K

A sad fact about retirement plans is that they have not been living up to their promises in some instances, thanks to the recession and other areas. In the United States, this means that individuals approaching retirement are thinking very carefully about where to invest their savings. Many already have 401k plans sponsored by their employers. Others have opened their own IRA retirement funds.

The investments associated with these plans have not done real well with the exception of investments in gold, such as certain stocks, coins and bullion. There are of course others that have done OK, and currently the market is recovering, yet over the long term, not much has performed as well as gold and other precious metals for that metter.

For anyone choosing right now, there are pros and cons to each. The 401k is sponsored by your employer. Limits to your annual payments could be higher with the 401k, but you open and control your own IRA. In each instance, the money can be invested without paying taxes now, but will be taxed when it is withdrawn. Consumers are penalized for early withdrawal from either one.

Each account can contain some forms of gold or precious metals. The trouble with a 401k investment, however, is that the company account manager controls what stocks are included in your investment plan, which means you could continue to lose out owing to set investment practices or options. With an IRA, you hold all the cards. If you want a gold IRA, you make the arrangements or hire someone do that for you. Some existing IRA plans will not accept gold, but you can always open another one which does.

As for the gold 401K option, your company might arrange to purchase gold or other precious metals investments, like silver or platinum, for its employees. In this case, there is a potential benefit in the form of matching. Some employers will match your personal contributions to a particular percentage. This is a windfall of sorts and not to be sniffed at.

If your employer is not investing in gold on your behalf and will not do so, basically the only way to get out of your 401k is to leave your place of employment and move to another job. You can also quit your job and use your plan to fund a business startup. The other option is to open your own IRA while also holding a 401k with your existing employer. If you are already wrestling with the nature of your retirement plan, then explore the ways to change the situation. If you have not started one, think carefully about the pros and cons of each option.

There are some various ways you can rollover or convert a 401k to an IRA worth looking into if added investment options and control is something you are after. You also have the gold Roth IRA option where the funds are taxed when added, and then from then on, all the interest and withdrawals are absolutely tax free, so long as a few rules are followed.