Red Oak Capital was founded on the belief that everyone should have the opportunity to afford and benefit from owning precious metals. As such, we create investment strategies tailored towards each investor based on their specific desired asset protection outcomes.
An IRA, or individual retirement account, is the foundation of most people’s retirement plan. This investment opportunity permits a taxpayer to contribute a portion of their income up to a certain amount. You are allowed to contribute up to $5,500-$6,500/year – depending on your income, tax-filing status, and other factors.
With a traditional IRA, these contributions are tax-deductible. However, all contributions can realize returns on a tax-deferred basis until retirement and withdrawal. When you begin to withdraw from your Retirement Account at age 591/2, withdrawals from the IRA will be taxable. The benefit of postponing this tax payment is belonging to a lower tax bracket in retirement.
Once you reach the age of 70½, withdrawals from an IRA become mandatory. If your IRA contains different assets in it, you can choose the specific amounts of assets you remove and when. Furthermore, an IRA is created solely for a single individual person. It is not associated with one’s employer or workplace.
IRAs can contain a wide variety of asset types and may be invested in any asset type that the custodian institution, such as a bank or brokerage, allows. Stocks, bonds, mutual funds and ETFs are some of the more common components of an IRA. However, with a self-directed IRA, you can hold more types of assets, including precious metals and real estate. Due to their subjective values, collectibles, including antiques and collectible coins, and cash-value life insurance, are prohibited from an IRA.
Funds can be withdrawn from one retirement plan and contributed to another IRA within 60 days of the initial withdrawal. The transaction is 100% tax-free and penalty-free. Funds are sent from an old retirement plan directly to the individual account holder, and they are responsible for contributing it to their new IRA within 60 days to avoid paying taxes. This is the most commonly used method for people with employer-sponsored retirement plans (401k, 403b, 457b). Generally, this can only be done one time per year, per account.
The individual account holder instructs that money be transferred directly from their current IRA trustee into a new IRA account. Money moves from one company (trustee) to another company (trustee) without the account holder having to take receipt of funds at any time. This type of transfer is 100% tax-free, IRS penalty-free, and has no restrictions on how many transfers possible. Transfers or rollovers must be made from “like plan” to “like plan.”
A traditional IRA allows the individual investors to contribute pre-tax income toward investments that can grow tax-deferred (no capital gains/dividend income is taxed). The account owner is allowed to contribute up to $6,000-$7,000 depending on the taxpayer’s age, income, tax-filing status, and other factors.
Contributions are tax-deductible. Money is taxed upon withdrawal. The account owner may withdraw funds at any time – however, if you are younger than 59 ½ years old, a Federal penalty will apply.
A Roth IRA permits the account owner to contribute post-tax income toward investments that grow on a tax-deferred basis. The account owner is allowed to contribute up to $6,000-$7,000 depending on the taxpayer’s income, tax-filing status, and other factors. Contributions are NOT tax-deductible. Since money is taxed PRIOR to being contributed to the Roth account, it does NOT get taxed upon withdrawal.
A Roth IRA is completely free of withdrawal penalties, as long as the account owner is over 59 ½ years old. If funds are withdrawn before they reach age 59 ½ and the Roth account is less than 5 years vested, Federal penalty applies.
A Simplified Employee Pension (SEP) retirement plan is a retirement plan that an employer, or self-employed individual can establish for themselves and their employees. Contributions are tax deductible – very similar in nature to Traditional IRA. The individual establishing the plan must be the owner of the business/President/CEO/self-employed. SEP IRA’s can be transferred or rolled over into a Traditional IRA or a new SEP IRA. In a SEP IRA you are allowed to contribute up to 25% of your income, up to $55,000 per year.
A Savings Incentive Match Plan for Employees of Small Employers is a retirement plan that may be established by employers/self-employed individual. Contributions are tax-deductible. These accounts can only be transferred to Traditional IRA’s or SIMPLE IRA’s after they have been established for at least 2 years. If the account is less than 2 years old it may not be moved.
A 401k is an employer-sponsored retirement plan for a “for profit” company. 401(k)s are the most common kind of defined contribution retirement plan. These plans can generally only be rolled over if the individual is over 59 ½ years old or separated from service (no longer working for the employer).
A 403b is an employer-sponsored retirement plan for a “non-profit” company. A 403b, generally can only be rolled over if the individual is over 59 ½ years old or separated from service (no longer working for the employer)
If you’re an employee of a city, county, township, park board, water district or similar entity, your employer may offer a tax-exempt savings benefit known as a government 457(b) deferred compensation plan. This retirement plan allows employees to make pre-tax salary deferrals. An advantage of the 457(b) plan is that it is not subject to the IRS age 59 ½ rule and there is no 10% penalty for withdrawing your funds before that age, although the withdrawal is subject to ordinary income taxation.
Commonly found in many 403b plans, tax-sheltered annuities allow an employee to make contributions from his or her income into a retirement plan. The contributions are deducted from the employee’s income and, as a result, the contributions and related benefits are not taxed until the employee withdraws them from the plan. Because the employer can also make direct contributions to the plan, the employee gains the benefit of having additional tax-free funds accruing.
A Thrift Savings Plan (TSP) is a retirement plan for Federal government employees. Employees are either “civilian” or “uniformed.” Employees must be either 59 ½ years old and/or separated from service from Federal Government in order to rollover funds. TSPs have their own set of forms to be used for any rollovers.
There are two safe, tax-free and penalty-free methods used to transfer money between retirement accounts: the direct trustee-to-trustee transfer and the 60-day rollover option. Again, the Red Oak Capital has an entire IRA-dedicated department that will handle the details for you.
The trustee-to-trustee process moves your retirement monies (either partial or full) from your current IRA provider directly into the hands of your new Precious Metals IRA provider.
Your current IRA account provider mails a check to your home address; you will then simply mail that check directly to your new Precious Metals IRA provider. As long as this check is provided to the new IRA custodian and deposited into your new IRA account with 60-days, there are no taxes or penalties incurred.
We know that the rollover process can seem complicated so we urge our clients to let us do the heavy lifting! With your consent, the Red Oak Capital will assess which method works best for your portfolio and will handle the entire process on your behalf, filling out the paperwork or making any necessary phone calls. Red Oak Capital IRA Department has processed many of these types of transactions and you can rest assured that our IRA Department will assist you step-by-step through the entire process.
Precious metals IRA depository storage provides clients with the ultimate security.
The safety and security of your precious metals IRA is extremely important. As such, clients have the option to work with multiple private, non-government, non-bank storage facilities with a number of depository locations throughout the United States. Every Red Oak Capital client can have their IRA metals stored with either Brinks Global Services U.S.A. or the Delaware Depository. Both depositories are IRS approved and carry “all risk” insurance policies from Lloyds of London.
Both depositories have locations in jurisdictions with no sales tax on the purchase, administration, or storage of precious metals.
You are not permitted to hold the Precious Metals yourself while owned in the IRA.
Investments inside IRAs are taxed as ordinary income upon distribution. The same investments held outside of Qualified Plans are taxed as capital gains, which can be significantly less than the income tax for most investors.
When your IRA is invested in the stock market, and it comes time to take a required distribution (RMD), your distribution is given to you in dollars. Given the fact that the buying power of the US dollar continues to diminish with every passing year, what are those dollars going to be worth in 10 years?
This is where an IRA backed with precious metals starts to shine.
Precious metals are the only assets you can own in an IRA that do not require liquidation or sale before taking distributions. Unlike every other investment in your IRA (which need to be liquidated before distribution), metals give you a choice: they can be liquidated inside the IRA, or they can be taken out of the plan in their physical form (and delivered directly to you) as “in-kind” distributions.
Taking physical possession of your metals can be a great opportunity. Taking delivery of your assets allows you to maintain the gold or silver, even after taking your distribution. This allows for the investment to continue to grow and protect your wealth until you decide to liquidate your assets. Your metals are now held outside of your IRA and will have a different tax implication than inside the plan, should you decide to liquidate. Should you decide never to liquidate your metals, and pass them on to your beneficiaries, they would be inherited on a “stepped-up” basis. This allows for all the gains on the metals, once outside the plan to be realized when inherited.
The first step is establishing a self-directed IRA (SDIRA) with your new custodian. An Red Oak Partner will walk you through the short application. Once your application has been completed and returned to our office, your Partner will process and complete the opening of your new SDIRA, usually within 24 hours. Once your new SDIRA has been established, your Red Oak Partner will contact your current IRA custodian and make arrangements to complete the tax-free/penalty-free rollover of your retirement account funds. Transfers can take anywhere from 3 business days to 10 business days, depending on how quickly your custodian is able to send the funds. Your Red Oak Partner will contact you as soon as your funds are transferred to your new SDIRA. Your Partner will then go over your precious metals options. You will decide what combination of gold, silver, platinum, and palladium is best for you. Your metals will then be shipped, via secured courier to the depository where the metals will be inspected, itemized and placed into your personal deposit box.
The Red Oak does not provide any paper or certificate products. When you open an SDIRA with the Red Oak, your depository will have actual physical precious metals in your own safe box. In fact, you will have the actual metals you purchased. You will have access to your metals at any time. You will have 24-hour online access to your account and when you reach the mandatory age of distribution, you will have the option to either take possession of your precious metals or choose to have an Red Oak Partner liquidate your assets so you receive the cash value as required by the IRS. Click here for a list of IRS approved Gold, Silver, Platinum and Palladium products.
Once you have decided which metals you would like to have in your SDIRA, the Red Oak will ship your metals, via insured carrier, to either the Delaware Depository (DDSC), located in Wilmington, Delaware, or to the Brinks Depository in Salt Lake City, Utah. Both DDSC and the Brinks Depository are insured through Lloyds of London – one of the oldest and most respected insurance providers in the world. Your metals are completely cover should anything happen to them while in either depository. The insurance policy protects your assets against physical loss or damage arising from any cause, even Acts of God (fire, flood, etc.).
There are no taxes or penalties for transferring your retirement account into an SDIRA. Your Red Oak Partner will work with you and your custodian to ensure that all proper procedures are taken during the rollover/transfer process. We will make sure that you do not incur any taxes or penalties for the transfer process.
The entire application process usually takes between 10-15 minutes to complete. You should have your beneficiary information available as well as a copy of your driver’s license or state identification as well as a copy of a statement from your current retirement account. Your Red Oak Partner can even complete your application for you over the phone and send it to you to review and sign.
You may only rollover IRAs or other qualified retirement accounts into an SDIRA. Qualified retirement accounts include Roth, SEP or a SIMPLE IRA, 401k, 403b, 457b, Pension plans, or Thrift Savings accounts. You can visit our IRA Information page for more information.
Your Red Oak Partner can open your new SDIRA within one business day from when we receive your completed application. The time it takes to transfer funds from one retirement account to another varies, depending on your current IRA custodian. Most custodians can transfer your funds within 7-10 business days.
Your new SDIRA has a flat fee charge. There are no percentages or charges outside of the $200 yearly charge for accounts. All charges to maintain your account are tax deductible and there are no other charges for having a precious metals IRA.
Your SDIRA custodian will provide you with online access to your account. You can track the performance of your precious metals at your convenience. You will also receive a quarterly statement from your new custodian. All clients also have the option of receiving a monthly statement mailed to them for an additional fee.
You are able to continue to make contributions to your new SDIRA. You can either send the contributions on your own to your new custodian, or an Red Oak Partner can make arrangements to have your contribution to be automatically transferred to your SDIRA. Your contributions can remain as cash in your account or you may invest in additional precious metals.
Your Red Oak Partner will make all RMD and distribution arrangements for you. Your Partner can either liquidate your metals for you so you receive a payment, or you can have your metals shipped to you directly. If you choose to liquidate your metals, your distribution can be wired to your bank account or you can have a check mailed to you. Liquidations and distributions usually take one business day to process.