Can I Invest My 401k in Gold

By | June 22, 2022

Investing in gold is a popular choice with individuals looking to diversify their retirement investment portfolio and to protect it from inflation. Unlike corporations, gold never goes bankrupt (!), meaning they are much better shielded from market instability than all our so-called ‘paper money.’ If the economy collapses, your gold coins and bullions will always be there.

Top Companies To Convert Your 401(k) Into Gold

Several companies will help you to invest in gold and other precious metals through your IRA and/or 401(k). However, the fees and terms vary widely from one to the next. So, do your research and read all the fine print in detail before you open your new account with one of these companies. According to our own research, below are the three best companies at current that can assist you with investing in gold.


– Our Top Pick

An IRA brokerage company, Goldco will assist you with many different processes associated with investing in gold as well as in other precious metals like silver. These include buying and selling your gold; completing all the paperwork during a 401(k) rollover and facilitating a smooth and hassle-free transfer; handling all paperwork related to custodians, storage facilities and more.


• A+ rating with BBB (Better Business Bureau)

• 10+ years experience

• Top-notch customer service


• Annual fee of $175 for any account worth below $100,000

• Don’t offer custodian services

>>Click Here to View The Official Website and Get A FREE Gold Guide


Augusta Precious Metals

You can buy gold coins, bullions, rounds and bars as well as collector sets and commemorative coins through Augusta’s recommended custodians (Kingdom Trust, Goldstar Trust, Equity Trust and more) or through any custodian of your choice. The company is also popular with the investors for its various promotional offers as also for its special price protection program. To know more about these, visit their official website here.


• Simple and fast setup process

• Competitive prices

• Lucrative promotional offers

• Excellent customer support


• All new accounts must deposit at least $50,000


Birch Gold Group

Another brokerage service, the Birch Gold Group of California will help you buy gold, as well as other precious metals, including palladium, silver and platinum. And this applies to tangible gold, but also to gold ETFs, mining stocks and gold futures and options. The company can help you find a reliable custodian or will work with the custodian of your choice to buy and store your gold. They also offer free shipping of your gold to approved depositories such as Brink’s Global Service and Delaware Depository.

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However, what we like most about the company is their genuine dedication in educating investors regarding precious metals investments and risks accompanying therewith. This helps their clients make more informed decisions vis-à-vis their gold investments.


• Excellent service at all levels

• Highly positive review from consumer organizations and industry professionals

• Highly helpful educational materials

• Free service for the first year to all clients depositing $50,000 or more into their new accounts


• Setup costs and annual fees are not clearly disclosed in the company website


Once you decide to invest in gold, you’ll need to have a plan as to how to go about it. The simplest option is to do a 401(k) or an IRA rollover. Typical 401(k) plans offered by employers come with high fees and limited investment options and rarely will you enjoy the option to invest in gold or other precious metals with these plans.

As such, you must find a new 401(k) or IRA that are cheaper in terms of fees and offer diverse investment options, including direct investment in gold. A rollover (to a new IRA or 401K) is simple enough. You just need to transfer the funds from your old plan to a new one of your choice. However, IRS rules dictate that the funds transfer is completed within 60 days. Failing this, you’ll have to pay penalties and taxes for the transfer/rollover (since it will then be interpreted as a standard withdrawal).

If you purchase gold through a gold IRA or 401(k), it comes with same tax benefits as with any traditional IRA.

STEPS TO FOLLOW When Converting Your Present 401(k) to a Gold IRA or 401(k)

1. Select Your Account Type

When doing a rollover, you are allowed to choose from any of the standard retirement accounts or plans, such as a Traditional IRA, a Traditional 401(k) or a Roth IRA. With the first two, you need not pay any taxes for the transfer of funds, again as long as the funds are transferred within the stipulated 60-day window. For a Roth IRA rollover, you will have to pay taxes on the money you transfer, just as you need to pay taxes on all your Roth IRA contributions. All withdrawals and investment gains are tax-free with Roth IRAs.

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The government allows you to own several 401Ks and IRAs at the same time, meaning you can open separate solo 401(k)s or self-directed IRAs (both essentially the same thing, with the only difference being that you can contribute more every year through a solo 401k) for investing in precious metals.

2. Set Up a New Account

You can open a new account through a bank, an online broker or through robo-advisors.  However, online brokers are a preferred choice for people who want to enjoy more direct control over their investment decisions. Commissions and fees of online brokers however vary considerably from one broker to the next. Make sure to find a provider offering easier fees and equally importantly, someone who specializes in gold.

3. Communicate Your Plans to Perform a Direct Rollover to Your Current 401(k) Provider

Typically, there is some paperwork involved and you’ll need to fill up a couple of forms. After that is done, your present provider will transfer the funds to your new account via check or wire transfer.

Now, TAKE NOTE that you must be on your toes all the time from the initiation of the process to its completion. The transferred money must reflect in your new gold IRA or 401(k) account within 60 days. Otherwise, most providers will withhold as tax payment as much as 20% of the total withdrawal/transfer amount. This means that your current providers have good reasons to drag their feet when it comes to completing the rollover process. So, always stay on top of it and don’t let them do that.

Finally, communicate in no ambiguous terms that you want a DIRECT and not an INDIRECT rollover. The latter involves the provider sending the money to your bank account which you will then have to transfer individually to your new account. This only complicates the process and takes up more time to transfer the funds.

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4. Choose Your New Investments

Although most individuals interested in investing in gold go for tangible gold, there are certain drawbacks associated with physical gold investments. These include paying regular broker commissions, gold storage fees, custodian fees, etc. This is why most industry experts recommend that you diversify your gold portfolio and adequately explore other methods of investing in gold such as:

• Gold mining stocks

• Gold futures and options

• Gold ETFs (exchange-traded funds)

How To Move A 401K To Gold Without A Penalty

As already mentioned, IRS terms make it clear that you’ll have to pay a penalty unless the rollover process is completed within 60 days. Other than that, early withdrawals (before age 59 ½) invite a 10% penalty plus a tax bill. And if you’re required to pay state tax in addition, as much as 45% of your funds can get eaten up by penalties and taxes.

However, you can avoid all those penalties and taxes as long as you finish the transfer process within the stipulated 60-day window. Again, in case of indirect rollover, you can only sidestep the penalties if you are age 59 ½ or older and if the new IRA or 401k account is a tax-deferred plan.


Am I Allowed to Invest My Current 401K in Gold?

Very few 401(k) plans allow investing in gold and precious metals. If yours doesn’t, you will need to perform a 401k rollover to a reputed gold IRA (or solo or self-directed 401k) in order to invest in gold.

Does An IRA Rollover Need Me to Pay Taxes?

When done correctly, the money retains its tax-deferred status during an IRA rollover from an old 401(k) and the process doesn’t trigger any early withdrawal penalties or taxes.

Can I Buy Tangible Gold in My 401(k)?

Yes, you can. However, according to IRS terms, all physical gold bought through a 401(k) can only be held by a third party depository, meaning you cannot store the metals yourself. Also, your IRA cannot simultaneously be the seller and the holder of the gold.

>>Click Here to View The Official Website and Get A FREE Gold Guide

Can I Invest My 401k in Gold


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