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Can I Buy Physical Silver with My 401k?

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The only way that you can put silver into a 401K is to have a self-directed solo 401K.

That means that you must be self-employed and have no other employees other than your spouse if you are married. The other thing is that your solo 401K must comply with IRS Code 408(m).

That code stipulates that any silver in the 401K may not be a collectible of any kind. 

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Silver bars that are at least 99.9% pure, however, are not considered collectibles, so if you meet all of the other qualifications, too, then you can put that silver into your 401K. The only thing other you're not allowed to do is keep the silver at home. It must be in the possession of a bank or of a trustee. 

That trustee may not be a bank itself nor an employee of any bank. Of course, if you'd rather have an IRA than a 401K, then you can roll your 401K money over into a qualifying IRA that lets you own actual silver.



Silver has a stable value. Many industries rely on it for parts and construction, so the demand should remain high for the foreseeable future. It's a strong metal and is also quite ductile and malleable, though not as much as gold.

It has a high melting and boiling point, conducts electricity quite well, and can also withstand cold. All of this makes it much more desirable than second-rate alternatives for many businesses in various industries.

In the medical, power, and electrical fields, silver is indispensable. Although it is not as rare as gold, it is rarer than either copper or aluminum. It also has more of the necessary qualities that businesses in those industries and related industries require for their operations.

You find silver in solar panels, home electronics, kitchen appliances, and medical monitoring devices. Such high demand, coupled with more than average difficulty in mining, will keep the price of silver stable.

Other countries' interest in silver has created a global marketplace for it. Both China and India, who together make up more than a third of the world's population by themselves, have focused on precious metals recently to bolster their economies.

That global demand further buttresses silver's stability, making it a wise investment. China itself accounts for nearly a fifth of all of the demand for silver in the world. As the demand grows, so will silver's value in the long run.

Precious Metals

Precious metals are already a long-term investment because of their slow but steady growth, resistance to catastrophic corrections, and tight controls. Those controls, which include the fact that silver cannot be manipulated by central banks because it's not tied to any one form of currency, also help with silver's stability.

By either creating and maintaining a solo 401K or converting your 401K into a self-directed IRA, you can take advantage of silver's many positive benefits. Remember, though, that you're not allowed to have it in your possession; it must be managed by a custodian and meet purity standards.

Methods of Purchase

When it comes to a solo 401K, there is one big advantage over all other forms of precious-metal accounts: You're allowed to match your own contributions because, as a business, you can offer "your employees," in other words, you, a "100% match" option.

If you're not self-employed, or incorporated if you are, then the solo 401K won't work for you. In that case, you'll either have to convert your 401K to a self-directed IRA or transfer your funds from an existing regular IRA to a self-directed IRA.

You have to go through a few steps to create such a self-directed IRA. First, you have to check out what you currently have to ensure that the funds are eligible for transfer.

Some might not be. If that's the case, then you'll have to speak with a professional to find out what's what and what you can do with the stuff that's left over.

401K to IRA

Next, you have to pick how much you want to invest in the precious metals account. It has to be within the legal limits, obviously, but within that zone, it can be any amount. Once you've decided, then it's time to sign the paperwork and move the money.

Your custodian will assist you with all of this. Some companies provide you with a custodian while others will direct you to find someone yourself. As long as you follow the rules and transfer or rollover only eligible funds, then there shouldn't be any tax penalty for you doing so.

At this point, you can direct your custodian to buy silver for you in any form allowed by the IRS. Your custodian will also discuss with you where you want your bars, allowable coins, or whatever other silver you buy, stored.

Which Items?

Aside from the 99.9% pure silver bars, you're allowed to own certain coins that the IRS has approved. One example would be a silver American Eagle. You can also own a proof of that coin. You are allowed to have a single or a twin maple leaf coin from Canada and Australian florins.


You have to buy new precious metals or allowable coins to roll over your 401K to the self-directed IRA. If you have precious metals in a solo 401K, for example, those metals aren't transferable. Also, remember that there are very likely going to be fees associated with such a transfer or rollover along with storage fees for the physical silver you buy.

There are limits to how much you can deposit per year. If you go over that amount, then you might incur a penalty as big as 6% of your total investment. You also cannot touch the funds in these accounts until you are more than 59.5 years old.

If you do, then the penalty can be as much as 10%. There are exceptions, however, and these include the death or incapacitation of the account holder, trustee, or custodian, huge medical or education bills, job loss, lack of childcare, and even serious or life-threatening illness.

When you roll over your 401K to a self-directed IRA, you have 60 days from the time you begin the process to complete it. There are more penalties if you don't.

What About "Paper Silver?"

You may have heard that you can "buy silver" for your regular IRA or Roth IRA. That is not true. With either kind of "regular IRA," you are actually prohibited from buying actual precious metals.

The only option you have is to buy "paper silver," which is not backed by actual metal. 

Paper Silver

Some examples include stocks in a silver mine, silver certificates, or silver futures. Although tied to silver, these investments are more akin to stocks or mutual funds rather than metal-backed IRAs.

Caveat Emptor

As with anything that involves large amounts of money, there will be folks who push different schemes on you to "get something for nothing." It pays to know about these schemes. Some of them are just mean-spirited. Others are downright fraudulent.

One of the most common schemes is the "once-in-a-lifetime opportunity." As stated, investing in precious metals is a long-term strategy. Killings and disasters are rare. But, fraudsters rely on people's inherent desire for "the fast buck" and promise the moon if you "just give us a quarter of what you want to invest."

We'll cover the rest and take "our cut" after the price "goes through the roof." The problem then is that there was no deal. The person never bought precious metals for you. Yet, the person charged you storage fees and transaction fees and also kept your 25%. You could suffer a margin call or even lose your shirt entirely.

Also, avoid "commemorative editions." Coins like that have significant markup that can be as high as 200%. The price is much more than the simple cost of the silver in the coins. The promise is that "coins always appreciate in value," but that is not the case.

For example, a 1914 D wheat penny, which is minted from nearly worthless copper, in "about uncirculated" condition is worth about $180 in 2023. Two decades ago, that same coin would be worth about 10 times that.

Even the rare 1921 Peace Dollar that used to cost thousands in "extremely fine" condition now costs just $197. The same holds true for commemorative editions of silver coins. It's far better to purchase coins that are approved by the IRS for 401Ks and IRAs.

If you have questions or have uncertainties about a custodian, banker, trustee, or other person involved with your 401K or rollover, organizations like the Commodity Futures Trading Commission can help. The No. 1 tip when it comes to precious metals investing is to get everything in writing so that there are no entanglements at a later date.


First, it must be said that all of these procedures and warnings apply equally to gold, platinum, and palladium as well. All investment in precious metals falls under the same guidelines and laws.

It's a good idea to check out any company with whom you want to invest when you are searching for someplace to set up your precious metals account.

Read reviews from the general public and from a company's peers. Make decisions deliberately because your future, and that of your family if you have one, depends on those decisions. Don't fall for cold-call promises or things that are "too good to be true." It's a sad fact that those things usually are.

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