401k to Gold IRA Rollover

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Rolling over your 401(k) into a traditional or Roth IRA is a common yet potentially daunting process, especially for first-timers.

Typically, individuals choose to roll over their 401(k) when they leave an employer, aiming to consolidate their retirement savings into a single plan. This strategic move not only simplifies the management of your retirement funds but also opens up opportunities for diversification.

If you're considering ways to protect and grow your retirement savings, diversifying with assets that are not directly tied to the economy could be a smart move. One option to explore is rolling over your 401(k) into a gold IRA.

Fortunately, professional financial advisors are available to guide you through this process, helping you develop a retirement plan tailored to your unique needs and objectives.

This expert advice can make the transition smoother and ensure that your retirement strategy aligns with your financial goals. Keep reading to learn more about how a gold IRA can enhance your retirement portfolio.

image of gold bars with arrow trending up

Before we get started with this article:

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Definition Of A 401(k) Plan

several $100 bills saved for retirement

The Internal Revenue Code has defined a 401k under subsection 401(k). This addition to the Internal Revenue Code was included in the Revenue Act that Congressed passed in 1978.

The purpose of this addition is to give employees to opportunity to have deferred compensation that allows the tax to be paid at a future date.

It is a qualified retirement saving and investing account sponsored by the employer and offers tax breaks (tax is deferred up to the point of withdrawal of the funds).

Contributions to a 401(k) account are defined and are received from an employee’s pre-tax paycheck. The funds can be invested wherever the employee wishes.

Employers may contribute to the employee’s pension account through a company match. A company match to the account can vary; rather commonly a match is expressed in percentage terms.

However, there is a limit to how much can be contributed to the account per year; as of 2015, the pre-tax contribution was capped at $18,000.

You are allowed to self-direct one rollover from an IRA to another IRA or the same IRA in any 12-month duration; it does not matter how many IRAs you presently own.

What is a Gold IRA?

gold coins protected by a lock

The formation of a gold IRA was facilitated by the Taxpayer Relief Act of 1997.  A Gold IRA is a form of long-term individual retirement account that holds precious metals in custody for the owner of the account.

While a regular IRA holds assets in paper form, a gold IRA holds physical precious metals in form of bullion coins and bars.

Despite the name “Gold” in a gold IRA, you can use this plan to buy particular types of other precious metals apart from gold. They are silver, platinum, and palladium.

Please note: Gold IRAs are self-directed accounts, meaning the account owner can diversify their investment beyond the traditional IRAs. 

Another important point to note: you are not allowed to collect or buy and add anything simply made of silver, platinum, or palladium and consider them eligible for Gold IRA.

The Internal Revenue Service has very strict requirements on the expected fineness of all the precious metal assets allowed for a gold IRA.

What is a Self-Directed IRA?

A self-directed individual retirement account (SDIRA), is very similar to a regular IRA which most savers and investors are familiar with except for a few important differences.

The biggest difference is obvious by the name of the account, the "self-directed" part. SDIRAs are managed by the individual investor and not a third party Wall Street financial firm like Blackrock, Fidelity, Vanguard, etc.

Why would you want a SDIRA?

Well, most people are just normal.  They work a job and try to save some of their money.

They are not really "investors", and they don't manage their money, they just want to put it in an account that is tax-protected, and let someone else (Blackrock, Fidelity, Vanguard, etc.) tell them where the can invest their money.

This is why the vast majority of IRA's only allow you to invest in a few different mutual funds that offer exposure to stocks and bonds, and give Blackrock, Fidelity, Vanguard, etc. hefty management fees, for doing essentially nothing.

Because of this, most investment advisors won't even tell you about self-directed IRAs, because they don't make money from them

Self-directed IRAs were created because there were people that took control of their finances, real investors, that demanded more investment choices inside of their tax-protected savings accounts.

While it is still possible to hold stocks and bonds in a SDIRA, you are also allowed to invest in a variety of assets like: 

  • Physical gold, silver, and other precious metals
  • Real estate
  • Private companies
  • Promissory Notes
  • Cryptocurrency
  • Private Equity
  • Foreign Currencies 
  • Many other types of alternative investments like Farmland

Now, there are limitations to these accounts.  There are restrictions on various asset classes.  

You want to speak with a custodian that specializes in administering these accounts so that you don't waste your money, and expose your investments to additional taxes, by investing in non-approved assets.

What is a Gold IRA Rollover?

A 401k to gold IRA rollover allows individuals to shift retirement funds from a traditional 401k to an IRA specialized in gold and precious metal investments. This method diversifies retirement portfolios and provides a safeguard against inflation and market fluctuations.  

A gold IRA rollover is when you take an old retirement account that is IRS approved such as a 401k, both Roth and Traditional IRAs, as well as other less well known accounts like 403b and TSPs and transfer them into a self-directed IRA.

In order to hold physical precious metals like gold, silver, platinum, and palladium, you need to have your self-directed IRA administered by a custodian that specializes in accounts that are allowed to hold physical precious metals.

The custodian will need to work with your gold broker to take delivery of your metals and to ensure that they are IRA approved so you don't get hit with tax penalties.

Protect Your Savings - Tax and Penalty Free!

Types of Saving Accounts Eligible for Rollover into a Gold IRA

Not every type of tax-protected savings account is qualifies to be rolled over into an Precious Metals IRA.  

Here is the complete list of accounts that are eligible.

  • Roth IRAs
  • Traditional IRAs
  • 401(k) from a former employer
  • Self-directed 401(k)
  • Thrift Savings Plan (TSP) - for government and military employees
  • 457(b) - for government and non-profit employees
  • 403(b) - for public school and non-profit employees 

For investors that have savings account that was created as part of their employee compensation package, you can only rollover if you are no longer employed by that company.  

Partial rollovers are allowed for by current employees that are over the age of 59 1/2 years old, but they are complicated and you must speak with a knowledgeable custodian about this special situation before attempting to move your account.

Setting Up An Account: How To Open A Gold IRA

The process of setting up a gold IRA is quite easy and direct. The initial step is to find a custodian for your precious metal assets.

It is against the law for any individual to store the gold for themselves; you have to use a custodian to hold your gold in an IRA. 

man looking at a clipboard

For leads, reach out to your nearest bank, trust company, or credit union to get a referral for a custodian.  Or you can speak to the representatives at Goldco or Augusta Precious Metals and they can recommend trusted custodians.

Also, ensure you conduct necessary due diligence on the select number of custodial companies and narrow down on a reputable option with a demonstrable record in gold IRAs. 

Next, you will need to find a broker or precious metal dealer who will sell you the gold. Look for leads from your preferred custodian because they often have a list of brokers whom they have worked with before, and it is a good place to begin your research. 

Once you have settled on your preferred choice for custodian and precious metal broker, proceed to open an account and buy your precious metals. 

When your time to retire comes, you will be allowed to either collect your precious metals or have them liquidated to get cash. At this point, the IRS is going to tax whichever option you go for as both are considered types of distributions.

Reasons To Invest In Gold

There are several concrete reasons why investing your retirement savings in gold as a method of risk diversification is a smart decision. The following are the main reasons why you should include gold in your retirement asset portfolio:

  • Value of gold is negatively correlated to stock prices. Based on historical figures, the price of gold has tended to go up whenever the prices in the stock market fall. Including gold in your portfolio will save you from huge losses in case market forces negatively impact your “stock only” portfolio. 
  • The value of gold is quite resilient in tough economic times. This is because most people prefer to hoard gold to preserve their wealth during an economic crisis. In case of an economic downturn, gold tends to increase in value.
  • Gold safeguards an individual’s purchasing power. In a time when inflation is going up, gold has been proven a good hedge against erosion of purchasing power.

How To Rollover A 401k to Gold IRA

gold bars

Once you have set up your gold IRA, you can request the company managing your 401 (k) account to set off the rollover process.

To begin with, you have to decide what you want between a direct or indirect rollover. For an indirect rollover, you are requesting the withdrawal of funds from one account and depositing them in another account.

On the other hand, in a direct IRA rollover, the savings are moved from one account directly to another. A direct rollover is simpler and has less exposure to IRS penalties. 

Indirect rollover allows you up to 60 days from the day you receive your funds to transfer the money to your gold IRA company or custodial company.

If you fail to complete the transfer within the 60-day window, the transaction is considered a withdrawal, and your funds will be taxed.  Also, if you are aged 59.5 years or less, your account will be charged a 10% penalty for early withdrawal. 

Regardless of the rollover option you opt for, you must fulfill all specific conditions the company you are dealing with may have concerning the application and processing of rollovers.

After you have met all the requirements, the company will send over a check with your funds to you or your gold IRA custodian. At that stage, you will have finalized your 401(k) rollover to a gold IRA.

The Types of Gold and Silver Authorized by the IRS 

The Internal Revenue Code only permits one to own gold, silver, platinum coins, and gold, silver, platinum, and palladium bullion of a particular fineness standard.

For instance, the coins you are allowed to own include the America Gold Eagle coins, American Silver Eagle coins, Canadian Gold Maple Leaf coins, and American Platinum Eagle coins.

stack of gold coins

The fineness level of these coins must be at least 99.9% or more.

Some brands like the South African Krugerrand are not allowed, as well as other bullion bars that are not pure enough.

How You Can Own Precious Metals in an IRA?

You own the physical gold and silver in an IRA, however, the precious metal coins and bullion can only be held by an IRA trustee and not the owner of the precious metals IRA.

This means you are not allowed to keep your IRA coins and bullion in some safe storage at home, deposit box, or even bury them in your yard.

IRA tax rules apply the same way to both traditional and Roth IRAs. For instance, if you have an IRA, you can easily transfer your assets to gold or silver. However, if you decide to take over the physical possession of your precious metal assets, the IRS recognizes the transaction as a distribution.

The best way to avoid IRS penalties and taxes is by allowing a depository to store your gold and silver.

The main role of the depository is to offer safekeeping services for precious metal assets and allow easy access to the owner when they finally need to take possession of their precious metals assets.

Is a Gold IRA Rollover a Good Idea?

cartoon of woman looking at taxes and a calculator

Do you want to diversify your retirement assets to protect the wealth you have worked so hard to save? Are you looking for an investment asset that is not linked to the instability of paper currency or the stock market?

If the answer to any of these questions is yes, you have to consider going for a 401(k) to gold IRA rollover.

An investment in a gold IRA can be extremely attractive for risk-averse investors, primarily because gold prices usually move in the opposite direction of the stock prices.

This means when the value of your securities is trending downwards, the value of gold is most likely going up and vice versa.

For this reason, many investors invest in gold to safeguard other investments from market fluctuations; it is rare for investors to hold a portfolio made of a single asset.

Most gold sellers use the dissimilarity in price volatility between gold and the stock and paper currency market to market gold IRAs as a much safer investment. Additionally, gold will forever have a value attached to it.

It is important to remember all types of investments and commercial ventures have inherent risks in them. For instance, the price/value of gold is bound to go up or down in the future. 

There is also the possibility of gold theft although some custodians are likely to take insurance cover for such incidences.

Here at BMOGAM Viewpoints, we think it makes sense to have a portion of your savings in physical gold and a 401k rollover into a gold IRA is the most tax efficient way to fund these accounts. 


The goal of this article is to provide a brief insight into the rollover of 401(k) accounts from a former employer into a precious metals IRA which involves physical ownership of gold and silver.

For this to be possible, some specific rules and guidelines must be followed.

If you own a 401 (k) account with your present employer, we advise that you talk to your plan’s sponsor about your needs and desires for the physical ownership of gold and silver.

Ensure you discuss with them all the options available for you.

Investing in gold and other asset classes is a good opportunity for diversifying your retirement savings. Investing in gold includes buying physical gold coins and bars or buying shares in a gold company.

If you are looking for the right investment opening for your 401(k) funds and you want an asset whose performance is not tied to the economy or the stock markets, it is fair that you seriously consider rolling over your 401(k) to gold IRAs.

After all, it is always vital to diversify your investments; your retirement plan also should include several asset classes for safety.

Having different classes in your portfolio will protect your funds from risks in different economic industries.

Our Top Recommendations to Help Your Rollover

Rollovers are a complicated process.  We have done a ton of research on this website to help our readers pick the best options when considering a gold back IRA.

All of our research has lead us to find that these two companies, Augusta Precious Metals, and Goldco are by far the best for folks that are interested in rolling over the 401k, and both offer FREE information and consultations.

Best for 401k Rollovers

Goldco and its precious metals specialists go the extra mile to make sure that both existing and potential customers receive all the information needed to make an informed decision.

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Augusta Precious Metals

The customers of Augusta Precious Metals not only enjoy low costs but also know exactly how much they are paying and for what.

It is due to this reason that Augusta finds itself as the best gold IRA company on this list due to its transparent pricing.