Money Purchase Plan

Understanding The Money Purchase Plan

Does the job you have offer an MPP, or Money Purchase Plan, that you take part in? Do you ever think about how to hedge your retirement funds, by buying silver and gold bullion? If so, you have landed on the right website.

Money Purchase Plans are not mentioned in the press much, however they are a significant, employer funded, tax advantaged retirement program. We will explain what MPPs are, how they differ from mainstream retirement programs (such as 401(k)s or IRAs), how bullion investing operates, and most crucially, how your retirement assets can be safeguarded against currency/stock market fluctuations.

What is a Money Purchase Plan

MPPs are retirement instruments provided by a few for profit firms, where employees and employers make contributions relative to yearly wages. In contrast to Profit Sharing Plans, where contributions are linked to a company’s yearly profitability, the yearly salary percentage that is allocated to MPPs stays the same every year, as per the plan’s conditions.

In spite of the requisite employer contributions, MPPs are defined contribution programs nonetheless, the same as 401(k)s. The reason for this is that employees still control their investments (in the manner permitted by the program), and still get to decide when to withdraw cash.

Every contribution you make to your MPP is tax deductible, and capital growth is taxed at a later date. One big drawback to some MPPs is that they often have large admin fees for retirement accounts, which depletes your investment ROI. Moreover, you are not allowed to use your MPP to take a loan out, in contrast to several defined contribution programs. It is hard to roll over MPPs, based on the program’s rules.

Plan Type Sponsorship 2018 Contribution Limit Roth Option? Allow Gold Stocks? Allow Gold ETFs? Allow Gold Bullion
401(k) Private Employer $18,500 / $55,000 Yes Maybe Maybe No
Solo 401(k) Self-employed $18,500 / $55,000 Yes Yes Yes Yes
Keogh Plan Self-employed or Unincorporated Employer $55,000 No Maybe Maybe No
403(b) Government or Non-profit Employer $18,500 / $55,000 Yes Maybe Maybe No
457(b) Government or Tax-exempt Employer $18,500 / $55,000 Yes Maybe Maybe No
Simple IRA Private Employer $12,500 / $55,000 Yes Yes Yes Maybe
SEP IRA Business Owners & Self-employed $55,000 Yes Yes Yes Maybe
Profit Sharing Plan Private Employer $55,000 No Maybe No No
Money Purchase Plan Private Employer $55,000 No Maybe Maybe No
Annuity Individual None No Maybe Maybe No
ESOP Private Employer Varies Yes Maybe No No
SARSEP Private Employer $55,000 No Yes Yes Maybe
Self Directed IRA Individual $5,500 / $6,500 Yes Yes Yes Yes
Traditional IRA Individual $5,500 / $6,500 Yes Yes Yes No
Precious Metals IRA Individual $5,500 / $6,500 Yes Yes Yes Yes
Thrift Savings Plan (TSP) Government or Military $5,500 No No No No

Rollover Limitations & Rules for Money Purchase Plans

If you’re below the age of retirement and employed, consult your particular program paperwork for MPP rollover regulations. With regards to the Internal Revenue Service though, Money Purchase Plans are categorized in the same way as other certified retirement plans, and you can roll these over into a new IRA, or an employer’s 401(k).

If you withdraw cash before you reach retirement age, penalties are applicable. Furthermore, if you plan to try a rollover, you ought to carry out a direct rollover, as opposed to an indirect rollover. You may be subject to early distribution fines, due to the withholding requirements associated with indirect rollovers.

Paper gold investments can be risky in several ways, such as:

• Legal Risks – Exploration and mining organizations are taxed and regulated more stringently.

• Production Expenses — Mining tools depreciation, rising value of land, rising labor costs, etc can    all affect the valuation of a mining firm negatively.

• Supervising Risks — Poorly supervised or overly leveraged organizations regularly become bankrupt, or go out of business altogether.

• Risks Related to Fiat Currency — Whenever you sell securities, such as gold mutual fund shares or gold stock, you are still paid via fiat currency. Should a currency collapse occur, you might end up with worthless currency.

Physical gold values have never hit naught, and have kept value for centuries. With regards to reliability,  investing in physical gold bullion is much better than ‘paper gold’.

historical gold price

Advantages of Allocating Five to Twenty Percent of Your Retirement Investments to Gold Bullion

Gold bullion is a straightforward, reliable means of diversifying your retirement investments. Gold (as well as other precious metals, such as platinum, palladium and silver) allows you to safeguard your retirement portfolio against inflation and stock market volatility.

In addition to being an excellent hedge, gold provides lots of potential for growth. Actually, lots of investors buy gold because of its’ growth potential, and many experts believe that gold will rise in value in future.

The quantity of gold bullion in your portfolio will vary, based on your attitude to risk and retirement date. Opening a self directed IRA is among the best methods for setting up a diverse retirement portfolio, with tax advantages on your gold bullion investments.

Selecting a Gold IRA Company for Your MPP Rollover

Our Gold IRA Company Reviews are compiled from feedback from customers and scores from respected organizations, like the BBB (Better Business Bureau), Trustlink and the BCA (Business Consumer Alliance).

Rank Company BBB
(Rating A+ to F)
(Rating AAA to F)
TrustLink Storage & Admin Fees
#1 Regal Assets
0 Complaints
0 Complaints
(587 reviews) $250 per year
#2 Capital Gold Group
1 Complaint
10 complaints
(142 reviews) $250 per year
#3 Rosland Capital
7 Complaints
7 Complaints
(21 reviews) $225 per year
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