How to Diversify Your IRA or 401K

Protecting your retirement savings is not only a good idea, it’s critical to having the money you need for a worry free secure retirement.

You don’t want to have to rely on a skimpy pension or social security for food, housing, medicine and other expenses in your retirement years. You also don’t want to have to have a second or third career to earn the money you need, after all you are supposed to enjoy your retirement.

One of the strategies that financial experts stress to protect the value of your retirement savings is diversification. All investments carry risk, whether the investment is in stocks, bonds, real estate, commodities or precious metals. Diversification can reduce your risk considerably. Many people are not aware that they can purchase precious metals in their 401K or IRA to give them another type of diversification.

Purchasing precious metals, including gold in your 401K or IRA is quite simple. The only stipulation is that you cannot take personal possession of your gold without taking a distribution.  Keep in mind that when you take personal possession of gold you need to also consider other issues such as shipping, proper storage and security for your gold. Arranging for someone else to take possession of your gold can actually simplify gold purchase for your 401K or IRA.

You can always invest in mining stocks, although that can present unwarranted risk depending on whether you invest in highly speculative junior mining companies or more stable larger senior mining companies. Your financial advisor may even caution against investing in the senior mining companies due to the higher degree of risk. You can also purchase gold using a gold vault service such as Bullion Vault. This type of service allows you to buy shares of gold bars, at a very competitive price. The gold bars are properly stored, have security and are insured. If you want to purchase a certain type of gold such as bullion coins, you can subscribe to a third party custodian that will take possession of your gold, provide proper storage, security and also insure your gold bullion coins.

The first step in diversifying your 401K or IRA into precious metals, such as gold, is to determine what type of gold investment suits your needs. The next step is to work with a reputable gold dealer. If you want to invest in gold using a gold vault or a third party custodian service to hold and store your gold, your gold dealer can recommend reputable companies and provide basic information about their services. Then your next step is to choose the options you want and contact the Bullion Vault or gold custodian service.

You will need to fill out paperwork to transfer money from your IRA or 401k; many times your gold dealer will have the forms you need. You will also need to subscribe to the Bullion Vault or third party custodian service. Once the money is transferred from your 401K or IRA, you can go about selecting your gold purchases.

Purchasing precious metals such as gold in your 401k or IRA can be a very effective way of protecting your retirement money and further diversifying your retirement portfolio.

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