How to Convert a 401k to Physical Gold – Getting a Gold-Backed 401k


It’s no secret that gold is one of the most popular investment items, especially since we’re facing a financial recession and many people still do not trust cryptocurrencies. This has caused them to search for investment alternatives to secure their assets and have a safe retirement fund. 

Although the company you work at might offer a 401k, you can use gold and other precious metals as a hedge for it by performing a Gold IRA rollover. However, this process can get complicated for those who have never done it before, which is why the following article will explain how to successfully convert your 401k to physical gold.

Top 3 Gold Backed IRA Companies to Assist Your 401k Conversion

It’s wise to click each link and get a free investing kit from each company so you can compare and contrast their offers for yourself.  

Benefits of Converting Your 401K to a Gold IRA Account

When you convert your 401k to a Gold or Precious Metals IRA, you earn more benefits than simply storing your money in a bank. Doing this will protect retirement funds from inflation and market instability because gold is one of the most reliable assets you can add to your portfolio.

Gold investments are a great asset to safeguard your money and retirement savings, especially because once you understand the procedure, it becomes super simple, and you’ll quickly start to notice its many benefits.

Tax Benefits

If you currently own a 401k and want to boost your investment, we highly recommend getting a Gold IRA to reduce your tax burden. This is done by withholding part of your earnings instead of paying large tax penalties.

However, if you want to get all the tax benefits a Gold IRA offers, you must understand how much you’ve withdrawn from your 401k account for investing in precious metals. Since Gold IRAs have different tax regulations, you won’t have to include this money in your taxes until you reach retirement and choose to start withdrawing money from your account.

Moreover, you may also get compound interest without worrying about additional taxes, as this will gradually increase the earnings you keep in your Gold IRA account.

Precious Metals IRA Low Costs

Precious metals IRAs offer low costs and affordable structures for all of its investors, as well as yearly account protection fees, which would significantly cut the transaction expenses you would have to pay if you own a 401k.

In addition, if you choose the correct Gold IRA company, you won’t have to pay transfer fees, which is highly appealing to most investors who want to save money.

High Liquidity

Investing in precious metals is one of the best ideas you can have if you’re looking for an asset with a high liquidity level. This is because precious metals have lower price points and are highly diverse. However, please make sure to do it through a certified Gold IRA company, as this will make sure you get the best possible pieces that will secure your investments.

Gold has become one of the most valuable assets in times of uncertainty, as it has proven to be a fantastic way of keeping your assets safe from inflation and providing peace of mind to everyone who invests in it.

Moreover, one of the best parts of a 401k gold rollover is that you will get immediate access to your retirement account without incurring extra or hidden fees.


Diverse Portfolio

The best way to secure your investments is by having a diverse portfolio, and having a Gold or Silver IRA is one of the best ways to do this with a 401k. Diversifying your assets can ensure you will still have enough money to live a relaxed life even if one of your investment tactics doesn’t work out.

In a precious metals IRA, you will be able to keep all sorts of assets, such as gold, silver, platinum, palladium, etc. This will ultimately protect you from inflation and provide amazing tax advantages only IRAs can offer.

<<<<Get Your Free Investing Guide>>>>

Potential Returns

Investors don’t only want to secure their financial future; they also want to increase their earnings, and although precious metals aren’t a volatile investment like cryptocurrencies, they offer returns comparable to other popular assets, such as equities and real estate.

If we compare how much real estate investments have grown within the past 10 years, we discover that their value has increased by around 10% each year, while stocks increased by 8%, and gold tends to provide an annual return of at least 5%.

However, if we adjust these percentages to inflation and consider the returns on equities, which is around 9%, and bonds, which is around 6%, investing in gold assets provides solid yet interesting yearly returns.

Nevertheless, you must be aware that although gold is one of the safest investments out there, there is no such thing as a 100% safe investment. Moreover, these figures don’t include the costs you’ll have to pay to transfer your 401k to a Gold IRA or the taxes you’d have to pay if you decide to sell your assets after owning them for a while.

It is also crucial to remember that certain market circumstances can’t be predicted, and they may expose you to additional risks, which can ultimately affect your returns. However, this is a risk that all investors must take, no matter which asset they choose.

401k to Gold IRA Rollover Options

If you’re switching jobs, you have four alternatives you can take to make the best out of your 401k plan:

  • The easiest alternative is to transfer it to a Gold IRA.
  • If you have a new employer who also offers a 401k plan, you can do a simple transaction between both plans.
  • However, if that’s not an option, you can withdraw the money, requiring you to pay taxes and possibly be penalized.
  • Finally, the last option is only possible if your previous employer allows it: to leave the account as it is.

Still, you already know which option we recommend the most. Performing a gold 401k rollover and creating a self-directed IRA is one of your best options, as it will give you more control over your assets and several tax benefits you wouldn’t get with 401k accounts.

Best Gold IRA Companies for Your Rollover Process

#1:  Goldco

The first option on our list of Gold IRA companies is Goldco, a gold investment firm that started operating in 2006. It is based in Los Angeles and offers several Gold IRA plans for those interested in precious metal investments. Moreover, it makes sure to guide its clients through the entire process of opening and maintaining their accounts.

If you choose this as your Gold IRA provider, you will have access to gold, silver, and all sorts of precious metals to diversify your IRA with assets of the highest possible quality.

Moreover, over the past six years, this company became one of the world’s most rapidly growing private companies, and it was awarded the name “Company of the Year” in both 2021 and 2022.

Now, to open an account with Goldco, there are several steps you must take, and some of them include paying straightforward fees, which is common among most IRA providers. The first step is to pay a $50 opening fee and an $80 yearly management fee. Also, all IRA precious metals must be kept in an IRS-approved depository, which isn’t precisely cheap. Therefore, if you prefer your precious metals to be kept with other people’s metals, you must pay a $100 yearly storage fee, but if you’d rather have a private depository, you will have to pay $150 instead. The difference between these two is that non-segregated depositories don’t ensure you’ll get the exact precious metal you bought. However, the monetary value of your assets will still be protected. On the other hand, segregated depositories will return you the exact coins or bars you purchased.

Goldco Pros

Goldco is the company we recommend the most because of its several pros confirmed by its loyal clientele.

  • Firstly, you will get a free starter kit, which will help you understand how gold and precious metal investments work. All you have to do is study Goldco’s handy guide, and you’ll be all set to start investing.
  • You can also get special discounts on certain transactions. Some of these incentives include free delivery and 10% off all your silver purchases.
  • Goldco also has the luck to have gathered a strong reputation over the years, as it has hundreds of positive customer reviews and many other evaluations, such as an AAA rating from the Business Customer Alliance, an A+ rating from the Better Business Bureau, and a 4.8 rating from Trustpilot.
  • Finally, it is crucial to consider Goldco’s wide experience in the precious metals market, as it has been providing services for 18 years.

Goldco Cons

Although Goldco is a fantastic option for opening your precious metals IRA, you must also consider its negative sides before committing to it.

  • The first thing we didn’t like about this company is that its initial investment is expensive compared to similar companies. You have to pay $25,000 as your initial investment to open an account, while some companies don’t even have a minimum initial investment.
  • Also, if you’re looking for a wide variety of precious metal assets, this might not be the company for you, as you can only purchase physical gold and silver. On the other hand, other companies allow you to purchase paper assets, exchange-traded funds, mutual funds, gold mining equities, and other precious metals, such as platinum and palladium.

#2:  American Hartford Gold

The second company on our list is American Hartford Gold, also headquartered in Los Angeles. This company is popular for helping individuals and entire families secure their financial future through precious metal investments. It will directly send your precious metals to your door or offer one of its many account options, such as an IRA, Gold 401K, or TSP. 

American Hartford Gold will surely help you diversify your portfolio by providing you with premium gold and silver assets at highly competitive costs. Moreover, purchasing precious metals at this company is super easy, as you only have to go to its website or call its customer service team to receive guidance on opening a Gold IRA.

After contacting the company, you will be required to fill out some paperwork, but don’t worry about it being too complicated, as you will have a professional assistant by your side at all times, and they will gladly explain everything to you. Then, you can start the rollover process. Whether you want to convert your regular IRA to a Gold IRA or transfer the money in your 401k to a new account, this company got you covered.

Finally, you can get assistance from an experienced account executive to choose the best IRS-approved precious metals for your IRA. However, remember you can only choose from gold and silver goods.

Once you reach 59 and a half years, you can start withdrawing money from your IRA, but we highly recommend starting to invest as soon as possible, as the best way to get high returns on your gold is by storing them for at least five to 10 years.

American Hartford Gold Pros

Now, we’ll summarize the best aspects of American Hartford Gold:

  • Firstly, this is a company that highly focuses on serving its customer. Therefore, its customer service is top-tier, and you will surely enjoy a high level of attention, trust, compliance, and honesty when dealing with American Hartford Gold.
  • It also features a client-only repurchase scheme, which has lowered liquidation costs.
  • Your personal broker will make sure to find the gold pieces with the lowest possible pricing and will make sure to offer complete transparency before executing the sale.
  • Finally, you can get a free consultation with a precious metals expert whenever needed.

American Hartford Gold Cons

Sadly, no company is perfect, and American Hartford Gold isn’t an exception, so please read these downsides we found before deciding to open your IRA.

  • The prices of the products this company offers aren’t shown on its website, so you will have to speak directly to a salesperson, which might feel a bit pushy for some people who only want to look at the prices.
  • Like Goldco, this company doesn’t offer platinum or palladium, so you must settle for gold and silver assets.

#3:  Augusta Precious Metals

The last company on our list is Augusta Precious Metals, a highly popular Gold IRA distributor founded in 2012 by Isaac Nuriani. Although it only has a bit over 10 years in business, it has become one of the leaders in the gold and silver IRA market.

This is because it offers a wide variety of high-quality services, such as IRS-approved metals, several gold and silver assets, secure IRS-compliant depositories where you can store all your metals, a life-long personal Gold IRA custodian who can guide you through the entire process of purchasing precious metals and solve all your doubts, a high transparency level, and a fantastic user experience thanks to its easy-to-use platform and incredible customer service.

Augusta Precious Metals promises all of its clients to always be there for them, but it has some drawbacks, such as its $50,000 minimum initial investment, which is by far the highest on this list. Still, if you have enough money to afford it, it might be beneficial, as the yearly charges are much lower than other companies.

We know how scary it is to invest, especially because investments inherently represent some sort of risk. Still, with this company, you can ease your anxiety, as it takes time to teach all of its customers how gold investments work and take time to understand the needs of each person they deal with. This way, you won’t feel pressured to make a decision.

Augusta Precious Metals Pros

Now that we’ve seen the overview of one of the best Gold IRA companies, you can read the following perks you’ll get if you work with this company.

  • Education is incredibly important for this company, so it takes time to teach each customer about all the investment options they can opt for.
  • The company will also assign a personal broker to assist you with all the paperwork you must fill out to open your IRA. Moreover, this assistance doesn’t stop there, as you can ask a Gold IRA custodian to solve all your doubts for as long as you keep doing business with the company.
  • The Better Business Bureau gave it a rating of A+, and it features no fees until you reach 10 years with your account.

Augusta Precious Metals Cons

Although we’re fascinated by how great this company is, it still has a downside: its $50,000 minimum initial investment, making it a bit inaccessible for some people.

How Can I Transfer My 401k to Gold without Penalty?

Learn If You’re Eligible

If you’re wondering how to move your 401k to gold without penalty, you must know that not everyone with a 401k is allowed to do so, as you need to meet certain IRS standards to be eligible for this transaction. The conditions you need to meet are:

  • Being at least 59 and a half years old
  • Providing a good cause for wanting to transfer your 401k to a Gold IRA
  • Having worked at the business that offered you the 401k for at least one uninterrupted year

Convert 401k to Gold and Silver

The next step on how to buy gold with your 401k is to contact your plan administrator and execute the transaction from your 401k to your Gold IRA. In order to do this, we recommend you have an investment plan laid out, as you must choose how much money you want to invest in precious metals, which you can only use for retirement purposes. If you don’t know how to do this, you can always consult an investment expert from the Gold IRA business of your choosing.

Monitor Your Investments

Finally, once you have precious metals in your Gold IRA, you must keep an eye on it to know which next steps to take. Quicken and Mint are some of the best monitoring programs for this, but you can also perform a manual monitoring session each month. During these monitoring sessions, you must focus on the following aspects:

  • Any applicable tax rules you must carry out for your physical assets
  • Check how to comply with the necessary rules so you don’t get penalized over time

Frequently Asked Questions about How to Buy Gold with 401k

What Is a 401k Rollover to Gold IRAs?

401k to Gold IRA rollovers are procedures that some investors execute to safeguard their investments because precious metals, such as gold and silver, are much more reliable and stable than fiat currencies. Therefore, they take the money in their 401k accounts and purchase precious metals to keep in their IRAs.

A 401k plan is similar to other investment possibilities, such as Roth IRAs and mutual funds, but these options tend to limit the type of assets they offer to investors.

How Can I Know Which Gold IRA Company to Trust?

The truth is that there are many unreliable Gold IRA companies. Nevertheless, in this comprehensive guide on 401k rollovers, we went through some of the most reliable companies out there, such as Goldco, American Hartford Gold, and Augusta Precious Metals. We chose these Gold IRAs companies because they have created a solid reputation for themselves over the years they’ve been in business. They have gathered a huge and loyal clientele, which only shows the quality of its products and services.

However, suppose you want to look for other Gold IRA providers. In that case, you first know what options you’ll need from a company and then check whether it is reliable enough or not by checking its ratings, licenses, insurance options, and customer reviews.

Bottom Line

Performing a Gold IRA rollover is one of the best ideas you’ll have. With an Individual Retirement Account, you can use gold coins, silver coins, and gold bullion as a hedge against inflation. That’s why we created this simple guide on choosing the best Gold IRA companies to keep your retirement savings.

However, remember that opening a Gold IRA account gives you several options besides changing your 401k to gold. You can also open a Roth IRA to keep gold and silver coins with special tax benefits.

<<<<Get Your Free Investing Guide>>>>

Advertising disclosure: We may receive compensation for some of the links in our stories. Thank you for supporting the Village Voice and our advertisers.