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What is a Gold 401(k) Rollover & How the Process Works?

Donny Gamble
January 20, 2022
gold 401k rollover
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Your 401(k) is an integral part of your retirement plan. A good 401(k) with healthy, maximum contributions can give you a lofty retirement after years of work, but liquid cash only depreciates, so what are you supposed to do about it?

Roll it over to a gold 401(k) to not only fight inflation, but to help your 401(k) investment accrue value beyond just dumping 20% of your paychecks in there. It’s time to actually put your money to work in an asset that’s been time-tested and proven to benefit workers.

Turning your 401k to gold isn’t difficult, and the benefits outweigh the negatives. Let’s take a look at a gold 401(k) rollover and what you can do today to start securing your future ASAP.

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How to Open a Gold 401(k)

A 401(k) is generally offered by your employer, even for minimum wage jobs that you might not expect to offer one. Check with your HR department or an equivalent staff member, and learn about what they offer.

More often than not, you’re going to find that a 401(k) plan doesn’t offer the opportunity to purchase gold directly within the 401(k). The few that do will come with fees and a packet of information that you have to learn about (different from a self-directed IRA, which we’ll get into in a moment).

With that information, it will tell you how to put in gold purchase orders, or how it auto-invests in gold and where it’s stored. A gold 401(k) usually buys gold in fractal amounts, such as coins or single ounces at a time, or it may be purchased and stored communally as a company asset, of which you own a certain portion of.

Each plan is different, and there are very few of them.  Your 401(k) isn’t self-directed, so you don’t get to decide everything about it. A self-directed IRA means you can choose what to do with the funds (within the account, of course), so you could buy gold, crypto, silver, platinum—whatever you’d like.

With your IRA, you can store liquid cash in it, but that’s not going to benefit you much since it won’t appreciate. You’re essentially converting 401(k) matched funds to an IRA account—which is also tax-deferred—and converting that cash to a long-term investment asset.

Why Invest in Gold?

A 401(k) is great and comes with many benefits, but cash is liquid, and it doesn’t appreciate with time. It actually depreciates, so you want to find a way to make sure your money isn’t losing value.

At an average rate of 2% or higher, inflation eats away at your earnings. It may not seem like much, but a U.S. dollar in 2010 is worth $1.27 today.

Money is printed, put into circulation, and the cost of living rises, meaning a dollar becomes worth less over time. If you secure your money in an asset with a proven average increase over time, such as gold, you can stand to gain money.

In 2010, gold was worth $1,424 per ounce. In 2022, it’s worth $1,828 per ounce (both numbers adjusted for inflation). While gold isn’t 100% assured and has its peaks and valleys over time, overall it’s a much better investment than keeping everything in liquid cash.

Even if you cash out and sell your gold when it hits a certain peak, you can keep all the money from that sale within your IRA and receive no taxation until you withdraw money.

Overall, gold is better than keeping your cash liquid by protecting you from inflation and being poised for a much higher return than other traditional investment methods.

Gold can still be volatile, but it’s a risk many of us are willing to take.

Should You Do a Gold 401(k) Rollover?

Rolling your 401(k) over to an IRA allows you to do much more with your retirement investment. However, if you have a gold 401(k) and not a traditional 401(k), there may be some hoops to jump through, such as choosing a new custodian and using segregated storage.

With a gold IRA, you have to arrange things yourself, but it’s a one-time setup and doesn’t take much effort to get it done. Rolling over your 401(k) to an IRA gives you financial freedom. 

As long as it’s maintained within the container of your IRA account, you can invest in multiple assets, including gold.

Your 401(k) is great to receive employer contributions (who doesn’t like free money?), but it shouldn’t be your only solution for a retirement account.

Next Steps

Your 401(k)is a great program to increase your retirement savings. Your employer receives tax benefits for contributing, so it’s best to take full advantage of it, but just know that very few 401(k) programs allow gold.

The ones that do will come with some sort of an annual fee or weekly fee depending on how much gold you’re buying. This could also depend on the total contribution you’re making to your 401(k) each week as well.

Typically, you’ll be rolling your 401(k) over to a gold IRA, and that’s where you can stand to gain money on your assets. Keep your 401(k) open, receive those matched contributions from your employer, just occasionally roll it over into your IRA to put it into gold if that’s the asset you want to hold for the future.

Gold 401(k) Rollover FAQ's

How can I transfer my 401(k) to gold without a penalty?

Turning a gold 401(k) into a gold IRA is actually a very easy process. Fill out the forms to get a self-directed IRA, and simply fill out a rollover form so that you can change your 401(k) into a gold IRA.

This way, you won’t get hit with a withdrawal penalty because it’s being traded between tax-deferred accounts. You’ll only have to worry about making sure you check the right boxes and there are no miscommunications during the account transfer process.

What is a gold 401(k) rollover?

A gold IRA rollover is when you transfer one account type to a gold IRA. This could be a standard IRA account, a 401(k), or other investment types that you want to place into a tax-deferred account.

Can I take physical possession of my gold in a gold 401(k) or gold IRA?

No, you absolutely cannot. You can purchase gold with the intent to physically hold it, but that is taxed differently than, and completely separate from gold you buy for an IRA.

When you buy IRA gold, it has to come from a verified mint, and go directly into third-party storage in a depository that’s accredited by the IRS. Otherwise, it can’t be a verified asset.

Behind the scenes, the process for buying, shipping, and storing gold is very intense and thorough. Auditors maintain gold in depositories while custodians care for and safeguard it, and brokers are responsible for putting in purchase orders to mints and other approved gold dealers

Thankfully, all you have to do is direct the buy order and sit back as the gold makes its way to your vault.

Augusta Precious Metals

This company has proven its commitment to exceptional customer experiences and education to help Americans savers use physical gold and silver in an IRA to gain retirement peace of mind.

About the author 

Donny Gamble

I’m Donny. I’m a world traveler, investor, entrepreneur, and online marketing aficionado who has a big appetite to compete and disrupt big markets. I thrive on being able to create things that impact change, difficult challenges, and being able to add value in negative situations.

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