How to Convert Your 401k to Physical Gold

How to Convert Your 401k to Physical Gold

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A 401(k) provides workers with numerous advantages, including tax benefits, employer matching contributions, and generous contribution limits. However, there are certain drawbacks that some investors might find concerning.

For example, a 401(k) typically offers limited investment options, higher fees, and a contribution schedule that does not account for market fluctuations.

Given these limitations, many individuals seek to diversify their retirement portfolios to enhance their wealth. One compelling strategy is to convert a 401(k) into physical gold.

Before we get started, investing your savings is a serious task. When it comes to adding precious metals to your portfolio, how do you know which companies to trust?

That is why we have researched every company in the industry and selected the very few with the highest customer service standards.

This way you can easily compare the best companies in the business, and choose one that fits your needs and investment goals.


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Physical gold has many benefits and is a great asset to have in any economic climate. For starters, it can protect against inflation risks. As inflation increases, so does the value of money.

This is why it's not the best idea to have your investment in cash since it will depreciate. A better and more secure alternative is investing in physical gold. It has been noted that gold has outperformed the inflation rate over the years. Investors that want to protect their portfolio should consider diversifying a portion with gold.

Moreover, gold is easy to buy and easy to sell. Gold can be bought from a jewelry store and purchased from a precious metals dealer. Furthermore, gold is always in demand. When you're ready to sell, you will have a variety of options to choose from. If you buy from a reputable dealer, it's a great possibility that they will buy back your gold.

How Come You can't Invest Gold in a 401(k)?

A 401(k) is a self-directed retirement savings plan sponsored by an employer and allows tax advantages for the holder. Through this plan, individuals are allowed to save for their future by setting aside a specific amount of earnings before taxes.

If you're looking to maximize your earning potential, holding physical gold is a good option. Unfortunately, 401(k) does not allow you to do this. These plans have limited choices when it comes to investing in physical precious metals. The best option is to convert your 401(k) into physical gold through a gold IRA.  This transaction is known as a 401k to gold rollover.

What is a Gold IRA?

A gold IRA is a specialized type of individual retirement account that enables a custodian to hold gold and other precious metals on the account owner's behalf. With a gold IRA, investors can acquire physical gold and place it in storage, among other investment opportunities.

The Benefits of Investing in a Gold-Related IRA

Note that the IRS has strict laws and regulations when it comes to holding metals. It's crucial to make yourself aware of these regulations to prevent any fines and penalties.

How to Convert a 401k to Physical Gold Before getting started, let's discuss what it means to roll over your 401(k) into physical gold. When you choose to roll over (convert) your 401(k), this means you'll be taking your retirement savings from your 401() account and moving it into a precious metals IRA where you can hold physical gold.

Luckily, converting a 401(k) is a seamless process when following the right steps. Here's how you can get started:

Step 1: Research and Choose a Gold IRA Provider

Finding the right gold IRA provider is a crucial step in the process. You'll need an educated gold dealer or broker and a custodian who can assist you through the process.

There are many providers available online. This means you'll need to comb through several companies before making any decisions. Some of the things you'll want to consider when selecting a gold IRA provider are fees, customer service, the company's network of clients, and insurance policies.

You'll always want to spend time looking at their reviews and reputation. Additionally, see if there is any past performance data available.

Once you found the right broker or dealer, you'll be one step closer to holding physical gold.

Step 2: Choose a Self-Directed IRA Custodian

While gold IRAs are self-directed, you'll still need a precious metals IRA custodian to hold your funds. With that said, it's essential to select the best custodian that will suit your needs.

Custodians play a huge role when it comes to managing your investments. Your custodian's primary role is to hold your assets separately from other assets and ensure their protection against theft or loss.

A good custodian will perform a wide range of services like recording transactions in identifiable accounts, documentation and reporting, and working with your metals dealer when buying or selling to ensure you comply with the IRS.

When looking for a custodian, ensure that the custodian offers physical and tangible services. Additionally, pay attention to what fees they have and whether those fees are suitable for you. Lastly, make sure your chosen custodian has the right to insured nongovernment depositories where all of your assets can be stored safely and securely.

Step 3: Choose Your Investments

Once you've decided on your custodian, you'll be ready to select your investments. The goal is to minimize your risks, increase your earnings, and ultimately meet your personal goals.

For this reason, you'll want to spend a little time thinking about which metals will make the most impact.

Luckily, there are plenty of coins and bars that you can purchase. Just keep in mind that there are only select precious metals that are approved by the IRS for your gold IRA.

Some IRA-eligible coins include the American Gold Eagle, British Britannia (2013+), Chinese Panda, and Canadian Maple Leaf.

Here are the specific requirements set forth by the IRS:

  • Gold must be 99.5% pure,
  • silver must be 99.9% pure, and
  • platinum and palladium must be 99.95% pure.

Bars, rounds, and coins need to be produced by a refiner, assayer, or manufacturer. The producer must be accredited/certified by NYMEX, COMEX, NYSE/Liffe, LME, LBMA, LPPM, TOCOM, ISO 9000, or the national government mint.

Proof coins need to be in their original mint packaging and in excellent condition. Additionally, it must include a certificate of authenticity.

Small bullion bars (except for 400-ounce gold, 100-ounce gold, 1000-ounce silver, 50-ounce platinum, and 100-ounce palladium bars) need to be manufactured to exact weight specifications.

Non-proof coins need to be in brilliant, uncirculated condition and free from damage.

If you need help navigating which coins are best for your gold IRA, you should be able to work with your gold dealer who can assist you with selecting metals.

Step 4: Submit Your Paperwork

Next, you'll need to submit all required paperwork to initiate your rollover. This ensures there is a smooth transition of assets and should be completed before any transactions take place.

You'll also want to ensure that all associated documents are filled out as needed since some documents may need notarization for IRS purposes.

Step 5: Initiate the Rollover

Once everything is set up you can contact the company in charge of your 401(k) to begin the rollover process. You'll have two options: direct rollover or indirect rollover.

A direct rollover moves your money directly between accounts without it ever touching your hands. This also means less risk of IRS penalties.

An indirect rollover requires you to withdraw the funds from one account and deposit it into another. You will have 60 days to get the funds into the new account. If you're 59 and a half and younger and you wait longer than 60 days, you'll be subject to a 10% early withdrawal penalty.

Step 6: Purchase Your Assets

Once you've rolled over all or a portion of your funds from your 401(k) to your new gold IRA account, you'll be able to purchase approved precious metals.

After you make the purchase, your custodian will ship your metals to the safe and secure, agreed-upon storage facility.


Can I own gold in a regular IRA?

You cannot own physical gold in a regular IRA. You can invest in a variety of assets with exposure to gold, such as gold stocks or gold ETFs.

However, if you're interested in precious metals specifically, you'll need to open a self-directed IRA. This enables you to invest in alternative assets that you wouldn't be able to own otherwise.

What about home storage?

Many investors want to physically hold gold themselves at home. For some people, keeping their gold nearby provides a sense of security.

With that said, there have been many ads online advertising home storage gold IRAs. While this may seem tempting, it's best to proceed with caution before working with these dealers.

According to the IRS, precious metals must be placed in a storage facility. This means that any company that is advertising home storage would be violating the rules and ultimately operating illegally.

What type of gold can be held at home?

Not all gold is restricted from home storage. The IRS strictly prohibits home storage for IRA-purchased gold and its precious metals. For more details, you can review Section 408(m) of the IRS code.

What are the penalties or taxes for incorrectly opening a home storage gold IRA?

Holding physical precious metals at home is a big risk to individual investors. Doing so will likely lead to many financial consequences.

In particular, you may face taxes, penalties, and fees on your entire IRA if the IRS decides that you are in violation.

What are the best Gold IRA providers?

Choosing the right gold IRA provider is an essential step in owning gold. Here is a list of a few gold IRA providers that you may want to check out.

Goldco - Most 5-Star Reviews in the Industry

Goldco is our #1 recommendation and a highly-rated precious metals IRA company. The company has received an average rating of 4.9/5 across all platforms.

They offer a simple re-purchase program, a comprehensive investment guide, and top-notch customer service.


One of the things that Goldco is known for is its easy phone application. Those who are looking for a seamless account process but would love some guidance may be interested in what Goldco has to offer.

Augusta Precious Metals - Best for Educating Investors

Another great option to consider is Augusta Precious Metals. With an average rating of 4.7/5, the company has worked to deliver personalized gold IRA services.

The company has a minimum investment threshold of $50,000, making it a great option for more established investors.

Augusta Precious Metals

They also have a 24-hour account set up, no IRA fees, and secure vault storage. Additionally, investors will enjoy the benefits of simple account management.

American Hartford Gold - Best for Bullion Purchases

 This is a highly-praised precious metals dealer with an A+ rating from BBB. They've also received 5-star reviews across the board.

The company is known for its exceptional customer service and has been recommended by Bill O'Reilly and Rick Harrison.

American Hartford Gold

American Hartford Gold advertises competitive prices and no buyback fees. With over $1 billion in precious metals delivered and thousands of satisfied customers, it is one of the top choices for those looking to buy gold and other precious metals.

For more added benefits, you'll be glad to know that the company offers up to $10,000 in free silver.

Red Rock Secured

If you're looking for an additional gold IRA provider, consider Red Rock Secured. This company has received a solid 4/5 review across platforms and is known for its impressive portfolio rebalancing for investors who need help reallocating assets.

Red Rock Secured

Investors will particularly enjoy dedicated account executives and their buyback commitment that gives you the confidence to buy and sell with confidence. To get started, there is a minimum investment of $10,000.

Another top dealer is Lear Capital. One of the things that make this company excel is its real-time pricing. Investors can feel confident that they're buying and selling at the best price by monitoring the market value of their metals.

Lear Capital also offers premium rare coins to give investors access to more investment opportunities. Additionally, you'll enjoy the benefits of market charts, fast shipping direct to your home, and a professional coin grading service.

While these are five great precious metal companies, there are various other dealers that you can consider. Just be sure to conduct thorough research, consider your goals, ask about fees, and always check out reviews.

How do I withdraw from my gold IRA without penalty?

To withdraw without penalty, you'll need to be at least 59.5 years old. Once you've reached this age, you can choose to withdraw and take possession of your investments. Or, you can liquidate those assets and withdraw them for your cash value instead.

If you have a 401(k) and want to diversify your portfolio, converting your 401(k) into physical gold is a great option. Gold has several benefits that can protect your wealth in the long term. Be sure to perform thorough research when choosing your gold provider, custodian, and physical gold.

Remember to read out list of the Top Gold Companies.

>> Click HERE to read our Best Precious Metals IRA Companies list <<


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