By Doug Young

Are you investing in a Profit Sharing Plan? Want to diversify your current retirement assets and invest in Gold or Silver bullion? You are definitely in the right place!

You can find a broad range of Profit Sharing Plans. Many times they’re used for complimenting another existing retirement vehicle. They may not always be discussed alongside other more dominant types of defined contribution plans, but they can offer a very good tax advantage for a lot of people.

Here I’ll have a look at what Profit Sharing Plans are and how they measure up when compared to other types of retirement plans like your 401ks and IRAs.

I’ll delve into precious metals investing and also how to safeguard your retirement assets with protection against currency collapses and stock market crashes.

What Exactly are Profit Sharing Plans?

A Profit Sharing Plan is something that employers set up to give employees another form of compensation that enables them to partake of or ‘share’ (via a trustee) in company earning with other participating employees.

Employees who are participating in a Profit Sharing Plan will receive contributions from their employer into their account that will be invested and have the ability to grow tax free.

Similar to other retirement plans that are employer-sponsored, you may not be considered as being ‘fully vested’ until you are several years into your plan.

Unlike a regular Money-Purchase Plan (where the contributions are pre-determined), Profit Sharing Plans have contributions that are tied into the profitability of your company.

There are certain restrictions that come with these plans, like no withdrawals before you turn 59½ without incurring penalties. You cannot withdraw funds early unless you accept a 10% early withdrawal penalty, and your distributions will be taxed just like personal income.

Profit Sharing Plans are generally placed into annuities, company stock, life insurance, or mutual funds. There are specific job conditions that will call for allowing individual employees to directly invest into their account.

The Rollover Limitations & Rules for Your Profit Sharing Plan

Only monies that have been vested are ever eligible for rollovers. Make sure you keep an eye on your vesting schedule before trying to move your retirement funds.

You will find that the IRS allows you to only transfer vested account funds, and also requires your plan’s administrator to send you a personal written explanation as to how these perform tax-free.

Penalties are involved in taking cash distributions before your retirement age.

If you’re attempting to do a rollover, I recommend that you elect to make it a direct rollover rather than an indirect rollover. The indirect rollovers come with withholding requirements. They also run a good risk for incurring penalties for early distribution.

How Can Gold Protect Your Retirement?


Certain Gold Types You May Invest in With a Profit Sharing Plan

Your choices for Profit Sharing Plan investments are limited to whatever your plan custodian makes available to you. Most of the time you won’t be able to choose and direct the investment vehicles to be included in your plan yourself.

Profit Sharing Plans do have the option legally to offer you these following investment types:

  • Mutual Fund Shares
  • Individual Bonds (government & corporate)
  • Individual Stocks
  • ETF (Exchange Traded Fund) Shares
  • Options

What this really means is that you can’t invest in any sort of physical gold bullion or any other type of investment metals via your Profit Sharing Plan.

Your only option for investing in gold via your Profit Sharing Plan is to purchase stocks from gold mining companies or to buy into a mutual fund that also includes stocks in gold mining businesses. They call this method buying ‘paper gold’.

Why Gold?

Gold is always an excellent hedge because it generally goes up in value during times of economic uncertainty, stock market volatility and increasing inflation. So including gold as a percentage of your investment portfolio helps to protect its value.

Historically the value of gold has always increased over time. It should not be seen as an opportunity for short term gains even though that may occur from time to time. Overall gold should be seen as a long term investment, which is why it fits well with retirement plans.

I have written more information about this here: Why Invest In Gold?

How To Include Physical Gold in Your Retirement Investment Portfolio

To include physical gold and other precious metals in your retirement investment portfolio you will need to rollover some of your funds into specialized type of Self Directed IRA known as a Gold IRA.

I have explained in detail about Gold IRAs elsewhere on this site, here: Everything You Need To Know About Gold IRAs

There are many Gold IRA Companies to choose from. I have reviewed the leading ones here.

My reviews are based largely on customer feedback and the company’s track record over time. I also check with authority websites that people trust in like the BCA, BBB, and Trustlink.

Read Analysis

What Makes a Good Gold and Silver IRA Provider?


About the Author: Doug Young
Doug YoungDoug is a highly experienced professional and widely trusted authority in financial investing, commodity trading, and precious metals. With over 20 years of expertise, he helps others make informed decisions by sharing a combination of personal experience, extensive knowledge and meticulously researched information on gold IRAs, precious metals investing and retirement planning. He regularly writes news items on these topics. He has considerable experience of evaluating Gold IRA and Precious Metals Companies, gained over a period spanning more than a decade.

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