Letter Re: Investing Gold Through and IRA or 401(k)?

Dear Jim:
With all of the prevailing concerns about the USG economy and the specter of a hyper-inflated or collapsed USG dollar, many people are seeking to invest in the precious metals like silver and gold. But, unfortunately, many of us have previously invested in dollar-denominated IRA‘s, 401(k) and other pension plans. As you know, if a person withdraws money from these plans he must pay all applicable taxes PLUS a 10% penalty which makes this a prohibitive thing to do. Therefore do you have any suggestions on what to do with existing retirement funds? Are there any precious metal-backed plans that you are aware of? BTW Everbank offers a CD called the Gold Bullion CD where the rate of return is tied to the price of gold bullion over a 5 year period and not to a fixed interest rate. But the potential downside is that it is backed by the USG’s FDIC (for whatever that is worth). What do you think of this instrument? Thank you for your prescient insights. B’shem Yahshua Ha Moshiach Sar Shalom, – Dr. Sidney Zweibel

JWR Replies: I consider the Everbank Gold Bullion CD a decent investment, but it is two steps removed from the ideal situation.  Instead, I recommend rolling over your existing IRA and 401(k) into a gold deposit IRA, through Swiss America.  I did so six years ago, and I’m glad that I did, since gold has nearly doubled since then.  The IRAs is in the form of U.S. Mint Gold Eagle bullion coins, held in vault storage by American Church Trust, in Texas. In a perfect world, we would be allowed to hold the coins in our personal possession and yet still have them qualify as an IRA–but sadly we live in world managed by bureaucrats and bean counters. The next best thing is a gold deposit IRA, through Swiss America. I suggest that you get your IRA converted during the current advantageous dip in prices. This still looks like a long term bull market for precious metals.