401k To Gold IRA Rollover Guide


How to Transfer a 401k to a Gold IRA 

In this 401k to gold IRA rollover guide, we’ll explain the steps of how to transfer your 401k to a gold IRA.

Here’s our top 2 gold IRA companies who can help with the process:

To rollover a 401k plan into a traditional self-directed IRA is a common practice, but if you want to transfer your 401k to a gold backed IRA, the process is a bit different. A gold IRA specialist might be your best bet to make the process as smooth as possible. Goldco Precious Metals and Augusta Precious Metals are both top rated companies that specialize in the precious metals IRA process.

With the economic uncertainty that we’re facing today, gold and precious metals are the best choice to hedge against inflation. The dollar is losing value at a rapid pace, and many people facing Retirement want to protect their savings from inflation, uncertainty and currency debasement given today’s volatile market.

For that reason, a lot of the top investors in the world are recommending converting some of your wealth into precious metals.

The term ‘gold IRA rollover’ is used for this process and it’s actually pretty easy to convert some of your retirement wealth into precious metals bullion.

With a gold IRA, you can have real, tangible precious metals as part of your retirement savings on a tax-free or tax-deferred basis. You will be able to fund this gold IRA rollover account by transferring cash or assets from your existing IRA.

The following guide to gold IRA rollovers will hopefully help you to make a decision about whether this is something that’s right for you.

If you decide to go ahead with this type of investment, you will be able to convert bonds, stocks and various other assets into physical, precious metals which are within a tax-advantaged account for retirement like a traditional IRA or self-directed Roth.

What is a Gold IRA Rollover Exactly? 

The definition of a gold IRA rollover is converting some of your existing investment portfolio or retirement account like a 401k, into gold bullion or gold coins, the reason being this is a sensible way to hedge against inflation and economic uncertainly.

Funds will be withdrawn from your existing account for the rollover and are held for a maximum of 60 days until they have to go into the new IRA under another administrator or custodian.

Gold IRA Transfer vs Gold IRA Rollover: What’s the Difference? 

There are two choices for investors funding a gold IRA. They can choose from a transfer or a rollover. Basically, transferring is a more secure method of moving assets than a rollover.

A rollover comes with several conditions and rules you need to know before deciding to do this. Breaking any of these conditions can result in the account holder having to pay an IRS-imposed penalty. Transfers have their own rules but not as many rules or conditions as rollovers. We can take a closer look at the differences between a gold IRA transfer and a gold IRA rollover, and also fine out in which way(s) they are similar.

Gold IRA Transfer Rules

  • No penalties for early withdrawal
  • No 60-day transfer rule applied
  • No annual limits
  • Not taxable
  • No withholding of taxes

Gold IRA Rollover Rules

  • If the account holder is under 59.5 years of age, there is a 10% early withdrawal penalty
  • The 60-day transfer rule does apply, and the gold must be invested in the new gold IRA within this timeframe
  • IRA holders are not allowed more than one rollover per calendar year
  • Violating the 60-day rule means the distributed funds will be taxable like regular income
  • If a rollover is done from one personal IRA to another, there is no withholding of taxes

With a gold IRA transfer, or IRA gold transfer as it’s sometimes known, funds are moved from one custodian to another. This means the account holder won’t receive any of the money taken out of their account.

Instead it is transferred between the account holder and the third party without any involvement from the account holder. This is a straightforward, contactless process which is completely handled by the custodians only.

The main difference between transfers and rollovers is with transfers the money doesn’t go into the IRA holder’s bank account at any time.

Most individuals will choose to do an IRA gold transfer (instead of a rollover) since there is less risk of human error involved. With a rollover, there are various elements which can go wrong, such as failing to move the funds into the new account in time, which will result in a steep fine from the IRS.

With a transfer, this error cannot happen because the account custodian handles the process automatically.

Rollover of 401k to Gold Backed IRA 

It is absolutely possible to rollover or transfer funds from your existing self-directed or employer-sponsored 401(k) into a gold backed IRA, although there are certain rules in place for this process which must be clarified before going ahead with a rollover.

Rolling over funds from your 401(k) with a former employer to a new gold IRA should not be a problem. Just pick a gold IRA custodian and let them set up the 401(k) rollover for you. Now if you’re considering a rollover of a 401(k) with a current employer, this can be slightly trickier and you will need to read the terms of your policy.

Some employers don’t let you invest any of your 401(k) in precious metals while you’re employed with them. If you’re unsure whether this applies to you, it’s best to ask your employer about current 401(k) rules and regulations, asking whether or not you are allowed to transfer or rollover some to a gold IRA. Some employers do allow this while others don’t, so you will need to ask yours.

Choosing Your Gold IRA Rollover Strategy 

There are different approaches to choose from when making a transfer or rollover to a gold IRA and your financial plans will dictate the type of rollover strategy you pick to fund the account. Although many people interested in investing in precious metals will ask how much of their portfolio they should invest, there is no one-size-fits-all answer.

How much of your funds you decide to invest in gold, silver or other precious metals depends on how close to retirement you are as well as your personal risk tolerance level.

If you are within ten years of retirement and you don’t want to take much risk, you might want to dedicate 20% or so of your portfolio. If retirement is further off and you don’t mind more risk, you might prefer to convert just 5 or 10% of your savings into precious metals.

However, much you choose to invest, diversifying your portfolio with precious metals like gold or is useful for hedging against instability in the market.

Lately, the stock market has been volatile and precious metal prices were especially high, as were some cryptocurrencies like Ethereum and Bitcoin. More investors are choosing to supplement their portfolios with precious metals because of the uncertainly about traditional markets.

Determining How Much of Your Funds to Convert into Gold

As already explained, it’s your choice how much you want to invest in precious metals. However, some of the best investors on the planet (including Tony Robbins and Kevin O’Leary from Shark Tank, as well as Ray Dalio) suggest investing somewhere between 5 and 10%.

But there are other top investors who are more risk-averse who suggest a greater figure. If you’re trying to decide what is best for you, consider the following questions:

  • When am I planning to retire?
  • How has your portfolio performed over the past 5 years?
  • Where do you think the economy is headed over the next few years?
  • What is your main goal for investing in precious metals

Your motivation for investing in gold is perhaps the most interesting question. Let’s take a closer look at some of the most common orientations and reasons for transferring money into a gold IRA.

Diversification Of Your Investments

This describes investors who want to buy gold simply to protect their existing portfolio from the overexposure they might get to bonds, stocks and other types of traditional assets.

A lot of investors who are conscious of risks like to diversify with precious metals to limit any potential losses if there is a recession or downturn in the stock market.

If this sounds like you, consider a 5 to 10% allocation in gold. This means think about investing about this much of your total portfolio in precious metals.

Inflation and The Dollar Losing Value

You might like to invest a higher percentage of your portfolio in precious metals if you are concerned about inflation or currency debasement. A gold IRA can be helpful if you wish to protect yourself from widespread inflation and you’re concerned about the US dollar declining in value.

There is currently a severe threat of inflation in the US since the highest rise in CPI (at +4.2%) occurred back in April 2021. Think back to the 1970s when inflation went crazy and gold’s value rose more than 600% because of the instability of the dollar.

If you’re considering finding a safe haven to protect your assets from inflation, you might like to invest substantially in precious metals, perhaps 10 to 20% of your total assets. If the dollar does keep backsliding, investors with precious metals will probably do better than those without.

Possible Economic Collapse

Investors who are concerned about the state of the economy and wondering if it can even be sustained in the future might prefer to dedicate more of their assets to gold or other precious metals, since their value tends to increase when there is widespread instability in the global or geopolitical environment.

Gold does well whenever panic strikes the market. Look at the OPEC+ oil crisis in March 2020 and how, at that time, gold hit a 7-year record high. Gold prices went up by 1.4% overnight during a stock market selloff when the US-Iran airstrike took place in January 2020 and a top Iranian general was killed. And now fast forward to 2022 and we have even more problems with the Russia/Ukraine situation.

Investors seeking a safe haven and protection against war or collapse should invest more of their funds in gold, perhaps as much as 20 to 30%.

Click below to get the Goldco Precious Metals gold IRA guide:


Click below to get the Augusta Precious Metals gold IRA guide:

Invest in IRS-Approved Bullion 

There are strict standards regarding gold asset types set by the IRS that you can hold in a retirement account with tax advantages. IRS-approved gold assets include the following (and more):

  • Johnson Matthey Gold bars
  • American Eagle Gold coins
  • Canadian Gold Maple Leaf coins
  • Valcambi Gold CombiBar
  • Credit Suisse Gold bars

Collectibles aren’t allowed from any 401(k) or IRA per regulations set by the IRS, meaning any precious metal falling under the ‘collectible’ category (and also rare coins) are not allowed in your precious metals IRA. Gold bullion bars aren’t classed as a collectible. There are three main exceptions regarding coins which allow for gold coinage investing in a gold IRA rollover:

  • Coins which were minted and issued under any sovereign state rules
  • Coins which are described under Section 5112 of 31 USC
  • Bullion or coins held by a bank or non-bank trustee

You might be subject to fines or penalties if you invest in any unapproved assets, so it’s best to only invest in gold bullion rather than investing in rare coins. If you do invest in coinage however, ensure you are investing in approved ones.

Physical Gold vs Paper Gold IRA Rollover

Physical gold refers to the hard metal bars kept in vaults by trusted custodians. Paper gold refers to any type of security that’s gold-based like ETF or gold mining stock for example.

Paper gold might be more convenient than actual bullion but it doesn’t have many other benefits really. Gold stocks have additional liquidity and this makes buying and selling easier. Paper gold is therefore more volatile that real gold bullion.

If you want to enjoy the myriad gold investing benefits, you should look into a real gold IRA rollover, since in the case of economic collapse or uncontrolled inflation, your gold stocks might plummet in value.

Here are some of the main advantages of investing in real physical gold bullion instead of securities-based gold, or ‘paper gold’:

  • Counterparty Risk: Gold bars, unlike public-traded stocks, can’t fail to honor obligations or declare they’ve gone bankrupt, so if you invest in actual gold bullion you don’t risk this happening like it can with paper gold.
  • Ease of Transfer or Moving: Gold bars can be taken out of your IRA because they’re portable and you can withdraw them from an IRA into your hands or into another vault.
  • Tangible Ownership: You actually own the gold bullion you invest in making it hard to seize or confiscate, while paper gold is easier to seize since it’s in the form of electronic assets.
  • Safe Haven Storage: If there happens to be some kind of economic crisis, actual real gold can be valuable while paper assets, in the worst case scenario, might not end up being worth much more than the paper they are printed on.

Although the above benefits don’t only apply to precious metals, they are some strong reasons why gold is a great option to add to your investment profile.

How to Find a Gold IRA Custodian 

To open a Roth IRA or traditional IRA, you just need to head to your local Fidelity or Vanguard branch and ask to get one. Rollover gold IRAs, on the other hand, aren’t quite this straightforward.

Fidelity, Charles Shwab and other conventional brokers don’t deal in gold IRAs, so you must research, locate and choose a gold IRA custodian instead.

The custodian is basically the company working on your behalf to initiate and then facilitate the gold IRA rollover with your current 401(k) or IRA provider. A good custodian will work closely with you to monitor your holdings being vaulted safety and will also obey all relevant IRS regulations and protocols.

A reputable gold IRA custodian will help with the rollover from start to finish and will be honest and transparent, giving you all the documentation and paperwork needed to complete the gold IRA rollover without any unexpected fees or clauses added at the end.

So who should you choose as your custodian for a gold IRA rollover? You can read reviews and testimonials online, which can be helpful, but there are some other simple rules you should stick to when trying to find the best gold IRA custodian for your needs. Take a look at the following rules to assist you in your custodian search.

Rollover Limitations

The IRS specifies you are only allowed one rollover without penalties per year, which means if you rollover into a gold IPA on June 1, 2022, you won’t be able to do another one until June 1, 2023.

Because of this, it’s critical to ensure you pick a good custodian, since if you aren’t happy with your choice and want to use a different custodian before a year has elapsed, you will likely face an early distribution penalty if you do rollover the funds again, so don’t rush your choice.

Prestige and Reputation

The most important consideration when selecting a custodian is making sure you pick a company with a great reputation and excellent customer satisfaction profile. There are companies out there who prey on unsuspecting clients and have bad intentions.

Any gold investment company which isn’t reviewed well online should be avoided for obvious reasons. You can find real customer reviews on Trustpilot, Reddit, Google My Business, YouTube, and the Better Business Bureau. These should all show authentic reviews from real customers.

The word ‘authentic’ is the most important term because some companies do ‘pay for fake reviews’ on social media. So how can you tell what’s real and what’s not? Well, if every review is about the same length and the information in each one isn’t very different on each, this could mean they aren’t authentic.

Only IRS-approved nonbank trustees are allowed to operate a gold or other precious metals vault. Don’t ever use a custodian who isn’t approved by the IRS, since they might be trying to sell numismatic coins not authorized for an IRA or poor-quality gold.

Best-Rated Gold IRA Companies

There are many different IRA companies specializing in precious metals to choose from, so it isn’t always straightforward which is the most suitable for your requirements.

From all the precious metals IRA companies out there, two of them have made the top of our list

They are:

Goldco Precious Metals Company

<< Click Here To Visit Goldco >>

Augusta Precious Metals Company

<< Click Here To Visit Augusta >>

Which Account Types are Eligible for a Rollover to a Gold IRA?

You can do a gold IRA rollover from any existing retirement account which is tax-advantaged. The following are some examples of suitable account types:

  • Self-directed 401(k)
  • Traditional IRA
  • Roth IRA
  • 403(b)
  • 457(b)
  • Employer-sponsored 401(k)

With employer-sponsored accounts like 457(b) or 401(k) for example, you might have to wait until you are no longer employed by that company before you will be able to facilitate the rollover. The reason behind this is that some employers don’t allow rollovers from one account into another account. Sometimes it’s possible for a partial rollover to take place while you are still employed if you are at least 59.5 years old.

All you need to do in order to move funds from one existing account into a new gold IRA account is to register this new, self-directed IRA using a gold IRA provider. Next you will start the process of rolling over the funds by filling out a transfer request. This should take a maximum of 14 days to complete by which time you should see the funds appearing in your new IRA.

Ready to Begin Your Rollover?

401k to Gold IRA Rollover Guide – Conclusion

Once you have decided to go ahead with your 401k to gold IRA rollover, you can begin by checking out one of our top 2 companies for gold IRAs and truly start to enjoy the various wealth-building advantages that come with diversifying your money. They are gold IRA experts that will guide you through the whole process. Both of our recommended companies offer a free gold IRA kit, and then they can offer you a consultation to see what is best for your situation.

Click below to get the Goldco Precious Metals gold IRA guide:


Click below to get the Augusta Precious Metals gold IRA guide:

Disclaimer: The content offered in this guide should not be taken as financial advice. It is only for informational purposes.  

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