3 Methods On How To Convert TSP to Gold to Safe Your Retirement Fund

Some employees decide to convert TSP to gold to prevent unexpected risks, such as financial collapse. Gold is an investment instrument that is strong enough against inflation, economic collapse, and other issues. So, how to convert TSP to gold effectively since TSP funds don’t give you such an opportunity?

3 Methods On How To Convert TSP to Gold

TSP Transfer

Ask your IRA custodian to send a distribution check to the new custodian. You can do this process anytime you want. There is no limit on time to do it, yet you will not get any penalty. In this process, you don’t touch or keep the money because you are transferring it once the withdrawal process is completed.

TSP Rollover

TSP Rollover is another alternative on how to convert TSP to gold if you can’t do it with a transfer method. In this case, your custodian sends your retirement funds to you. It is your responsibility to place the funds into one or more IRAs. You also only have 60 days to do the process. If you don’t do it within 60 days, you have to pay a tax penalty. You can rollover the funds in different stages anytime you want, yet you can only do it once per twelve-month period.

Self-Directed IRA

Only because you have successfully transferred the TSP to gold doesn’t mean that you get gold bullion. Both methods above are to invest in paper gold. Is it possible to invest in gold coins or bars? Yes, it is. What you have to do is use a self-directed IRA method. You can at least invest $6.000 in a gold IRA when you are under 50 years old. Investors who are older than 50 years old and can earn a $1.000 contribution can invest up to $7.000. Make sure that you consult your plan with someone expert in metals and retirement.

Types of Gold You Can Invest with TSP

You are not allowed to invest in gold bullion with your TSP. So, what types of gold you can invest with TSP. For those who have a Roth IRA, you can invest in paper gold, gold stocks, ETFs, and gold derivatives. Some people love to see a gold bar or coin at home instead of paper gold. It is possible to do as long as you take the self-directed IRA method while converting the TSP to gold.

The reason why some investors choose to invest in gold bars and coins is because of the price. The value of paper gold is unstable depending on the mining company’s management, exploration costs, local labor costs, and even geopolitical conditions. Unlike paper gold, the value of gold bars or coins are stable for thousands of years. The cost of a gold bar or coin often increases year by year. These factors make it riskier to invest in gold stocks than physical gold.

Learning how to convert TSP to gold is crucial because you can’t directly do it. You even have to know that you are about to invest in paper gold rather than physical gold if you transfer the TSP by using direct and rollover methods.