Add Gold to 401(k)
A 401(k) is a special retirement plan that an employer may choose to sponsor. It is a qualified deferred compensation plan in which an employee can elect to have their employer contribute a portion of their paycheck to the plan on a pre-tax basis. Taxes are not paid until the money is withdrawn from the account. It typically consists of contributions made by the employee and separate contributions by the employer.
This type of financial product originated in the 1980s in order to supplement pensions. Although pensions were more popular during this era, the costs associated with fulfilling them increased over time – and employers responded by replacing them with the new product, the 401(k).
401(k) Investment Options
This financial solution is unique in that the employee can control how his or her money is invested. Money from the employee’s paycheck is deducted and invested as the employee directs. This allows the employee to invest pre-tax, so when funds are removed from the account, the employee is then levied a tax.
With a 401(k), you control how your money is invested. However, most plans offer only a spread of mutual funds composed of stocks, bonds, and money market investments. The most popular option tends to be target-date funds, a combination of stocks and bonds that gradually becomes more conservative as you reach retirement.
While many individuals choose to use a 401(k) for retirement savings, this financial product comes with a few restrictions. For example, the maximum contribution that an employee age 50 or younger can make is $18,000. If the employee is over age 50, he or she can make an additional contribution of up to $6,000.
Employers establish their own guidelines regarding their contributions. Many will match contributions up to a certain percentage that the employee makes, such as 3 percent of the employee’s annual income.
Many smart investors choose to secure their future with gold and silver. If they decide to include these investments within their 401(k), the employee can then roll the 401(k) into a self-directed Gold IRA.
Adding Gold and Silver to a 401(k)
A 401(k) plan can be rolled over to a new self-directed Gold IRA holding physical precious metal coins or bars. If you would like to roll over your 401(k) to a Gold IRA, American Bullion can assist in this process. Call us at 1-800-326-9598 today to speak with one of our specialists about your options.