How To Move a 401K to Gold Without A Penalty

Disclaimer: We are reader supported.  We may be compensated from the links in this post, if you use products or services based on our expert recommendations. Please read our Advertising Disclosure.

401(k) accounts offer a powerful way to build your savings, leveraging the IRS's tax-deferred advantages. By contributing pre-tax income, your savings can grow significantly over time, allowing you to withdraw the funds during retirement when you may be in a lower tax bracket.

While this strategy is highly effective for savings and retirement planning, it's crucial to understand the rules and regulations to avoid penalties—essentially, additional taxes. The goal is to protect and grow your wealth while minimizing tax liabilities within legal boundaries.

With a growing interest in diversifying retirement portfolios, many are exploring the option of converting a portion of their 401(k) savings into precious metals like gold and silver. While this is both allowed and legal, it's important to follow the proper steps to incorporate these assets into your 401(k) without incurring unnecessary taxes.

Continue reading to discover the best practices for adding gold and silver to your 401(k) and how to navigate this process efficiently and effectively.

Before we get started with this article:

We understand how difficult it is to pick a company that you can trust with your hard earned savings.  That's why we create informative and useful information to give you as much knowledge as possible to make the right decision.

We created a list of our highest recommended investment companies, to make comparing and choosing the company best suited to your needs as easy as possible.


Get a FREE Gold Investing Kit from our #1 recommendation, by clicking the button below:

Protect Your Wealth - Tax & Penalty Free!

Rollover a 401K to Gold IRA

There are several different types of accounts like 401k, 403B, TSP, as well as a few more obscure retirement accounts that IRS allows you to convert to a rollover IRA. 

Of course the most popular of these is the 401k to gold IRA rollover

The biggest difference between an IRA compared to a 401k is that IRA are saving vehicles for individual investors whereas a 401k is something that is usually given as a benefit from an employer to their employees.

cartoon of woman looking at taxes and a calculator

A rollover IRA is a savings vehicle that allows individual investors access to a more diverse set of asset classes and investments than what the IRS allows in a 401k.

The most common time to set up a rollover IRA is when someone retires or when an employee moves on from a company.

A rollover IRA is similar to a 401k in that you are transferring savings from one tax protected account to another tax protected account, so this transaction is tax free.

The most popular way to exchange a percentage or the entirety of your 401k to gold IRA rollover is to open a self-directed IRA.  This is possible because self directed IRAs have a lot more options that you are allowed to invest in to seek higher returns.

Using a gold IRA rollover, there are even two scenarios in which savers can minimize their tax liability even further:

  • If you retire and move to a lower tax bracket, gold that is in your IRA is taxed at a lower rate than gold you simply possess in your home.
  • If you choose to place your savings in a Roth Gold IRA, you won’t take any tax penalty on the returns you get from increasing gold prices.

Once you have open a Self Directed IRA, next you need to appoint a precious metals broker/dealer as the Trustee of your account.

Ultimately, the easiest way to avoid taxes or penalties when transferring or rolling over your 401K to a self directed gold IRA is to work with an expert in precious metals investments that can guide you every step of the way to protect your savings.

Are You Allowed to Convert a Traditional IRA to a Gold Backed IRA?

Yes, the IRS does allow investors to roll all or part of a traditional IRA into a gold backed IRA.  There are some requirements that you must follow when you choose this.

  • The gold has to be a minimum of 99.5 percent pure gold.
  • It must be held by a certified custodian
  • The standard contribution limits for regular IRA accounts still apply
  • You can not place gold you already own in your gold backed IRA account, but you are allowed to add new gold purchases.

The government does have some exceptions to these rules with investing collector coins and gold bullion.  You can read more about that here:

It’s good to talk to a specialist or do some of your own homework before perform a gold IRA transfer.

What is the Difference between a 401K Rollover and a Transfer?

The IRS view rollovers and transfers differently.

A transfer occurs when an investor takes possession of funds from a 401K account (this is also known as a distribution) and places this money in a separate tax deferred account.

A rollover occurs when the money transfers from the trustee to a different trustee without the investor taking possession of the money.

What is the Difference between a 401K Rollover and a Transfer?

You’ll notice a lot of folks using the phrase rollover and transfer as if they are the same thing, and they are not, and the IRS treats these two very differently.

Here’s a simple way to know the difference:

If you take possession of the money, even if it’s temporary, it’s a transfer.  If you do not take possession, it’s a rollover.

What are the Advantages of a Gold 401K Rollover?

  • You can’t own gold in 401K, you can in an IRA
  • Precious metals protect you from an ever inflating currency
  • Precious metals are real diversification for your retirement portfolio unlike stocks, bonds, or real estate which are all highly correlated
  • You can own gold while still enjoying the tax advantages of an IRA account

IRS Penalties You Need to Know

Do not surpass your annual contribution limits

  • You’ll get a 6% penalty for going past the permitted amount
  • It must be held by a certified custodian
  • The standard contribution limits for regular IRA accounts still apply
  • You can not place gold you already own in your gold backed IRA account, but you are allowed to add new gold purchases.

Not allowed to invest in collectibles.

If you pull out any funds before you are of at least 59 ½ years old, you’ll get hit with a 10% penalty fee and be liable for this in your income tax.

Smart Tactics to Own Gold

Current tax laws allow investors to own multiple 401Ks and IRAs.  This is advantageous to a metals investor because you can convert one of these into a self directed IRA and you can use this one account to hold all your precious metals investments.

This technique is not required, but it does make it easier to keep your portfolio in order for many investors. 

Of course you’ll need to assign a trustee that is a precious metals broker to act as they guardian of storing the physical gold or silver or other qualifying metals.

Any easy way to find a good custodian that will educate you and walk with you every step of the process is to read our article on The Best Gold IRA Companies.

Are There Contribution Limits to an IRA?

Yes, and this number does change slightly with time due to inflation, but as of this writing the maximum contributions are $6,000 annually.  The exception is if you are over 50 you can contribute a maximum of $7,000 annually.

Keep in mind that these annual contribution numbers are per individual investor, not per IRA account as the investor is allowed to have multiple accounts.

There is also another break for investors older than 50 that allows them to put away additional money, known as “catch up contributions”, but this number is constantly changing and you want to talk to a gold IRA specialist before taking action, so that you do not make a mistake and incur a penalty from the government.

Why Invest Gold in Your IRA?

Individual Retirement Accounts (IRA) protect your retirement as well as your family's financial security.

These special accounts allow you to set aside tax protected savings that you can use in the future.   

With these long term accounts it's important to allocate a significant portion to assets that are solid and reliable, so you have a secure and worry-free retirement. 

a couple listening to a financial advisor

You can have cash in an IRA, but that is devaluing at a rapid pace and inflation is out of control

You need an asset that's dependable, retains it's value, and even increases in value over time, and there is no better asset for this than gold. 

With the world's economy struggling through lockdowns, shortages, wars, and inflation, uncertainty has never been higher and investors are protecting themselves by placing physical gold in IRA's. 

A gold IRA investment prospers from these crisis that negatively affect most other assets. 

Risk is knowing the economic dangers and doing nothing to protect yourself and your family. 

Safety is knowing the economic dangers and taking action to protect your financial future, and this is easy to do with a gold IRA.


The writing is on the wall.  The government has normalized the spending of trillions of dollars every year making the bailout of the Great Financial Crisis look quaint by comparison.

There is no going back.  Government will just keep printing as this is their only solution to address the problem.

Rolling over one of, or a portion of your 401K to a gold IRA will safeguard the lifetime of saving that you have worked so hard to build, while also making the best moves to keep your taxes (really penalties) to the Internal Revenue Service at the minimum.

If you'd like help rolling over all or part of your 401K into precious metals, we recommend reaching out to one of the companies listed below.  Of the hundreds of precious metals companies we have researched, these they are the best. 

By far.

Our Top Recommendations for Help Moving Your 401k


Goldco Precious Metals


Goldco is the Most Trusted in the industry, 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



  • Best Gold IRA service
  • 100% FREE IRA Rollover
  • Fantastic reviews
  • No high pressure sales tactics
  • Best Gold & Silver Deals in the Industry


  • The minimum investment amount of $25,000

"The friendly and professional staff at Goldco made my precious metals buying experience one-of-a kind! Their knowledge and expertise in the industry was unsurpassed by other metal firms. 

That knowledge was also passed on to me, giving me the confidence that I was making the right choice. For that, I would definitely recommend Goldco if anyone out there is considering a precious metals purchase. 

Thank you Tony and your awesome team. I can’t wait for my next experience."

- Trever H. 5 star rating on Google


Augusta Precious Metals-Small

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.



  • Transparent pricing
  • Money-back guarantee
  • Great educational materials
  • Cost and transparent fee structure


  • The minimum investment is $50,000 which is on the high end

"The consultants are knowledgeable and the webinar was informative and very helpful. They patiently answered my questions and concerns. 

Ebony, one of the representative in charge of assisting new clients, walked me through the whole process of signing up and rolling over of my 401K." 

-Marissa of Mission Hills, CA 5 star rating on Consumer Affairs


american hartford gold logo

American Hartford Gold

American Hartford Gold is a family owned company that made the Inc. 5000 list of America’s fastest-growing private companies.



  • Lowest minimum Gold IRA
  • Minimum investment of just $10,000, which is one of the lowest available.
  • Cost and transparent fee structure


  • Online purchases are not allowed
  • The company does not list all the fees charged to account holders on the website.

Frequently Asked Questions

  • What exactly is a Gold IRA?

A gold IRA is like any other IRA that is approved by the IRS with the important distinction that you get to invest in physical precious metals.  

Unlike traditional IRA accounts that limit the investment options available to you to paper instruments like stocks and bonds, gold IRAs allow you to hold physical precious metals like gold, silver, platinum, and palladium, as long as the metals meet IRS purity requirements.

Since you hold physical metals in your account, when it is time for you to take withdrawals, you can take physical gold as your payment, or the cash equivalent, which is a unique feature you don't have with traditional IRAs.

  • How much does the IRS allow me to contribute to my IRA annually?

If you are under the age of 50 you are allowed to contribute up to a maximum of $5,500 per year to your IRA account.  If you are 50 years old or older, you are allowed to contribute up to $6,500 annually.  

As long as you do not exceed these limits the IRS will not penalize you.  Also, it's important to know this applies to all your IRA accounts combined.  If you have 1 IRA, the maximum allowed annual contribution limits are the same as if you have 3 IRAs.  

The contribution limits apply per person, not per account.

  • Can I buy gold without paying taxes?

It depends, here's why.  There is a lot of bad information out there about taxes and gold. Plus, the IRS frequently changes tax laws.  

IF you purchase a qualified savings account like if you have an old 401k from a company that you no longer work for, you can roll that over into a self-directed IRA that can hold physical gold bars and coins, and other precious metals.

Basically the only way to escape paying taxes on your gold investment is if you make these in a tax protected IRA account.  

If you want to invest in physical gold in the most tax efficient way possible, it's best to work with a company that specializes in these transactions.  

They can guide you through the process and keep you from making mistakes that will get you hefty penalties.

  • How does Inflation effect my retirement savings?

We live in perilous times of extreme uncertainty and inflation is higher than it has been in 40 years.

A carton of eggs just 2 years ago cost $1, now it costs $3.  

The average price for a new car just passed $47,000.  The average for a new car in the year 2000 was only $19,000.

The simple devastating effect of inflation on your retirement nest egg is that it will cause you spend far more dollars, just to obtain the same amount of daily necessities.  

The response to any crisis, whether the housing collapse, the pandemic response, wars, or whatever crisis comes next, is for all governments to print their way out of the problem, which is basically just stealing money from people that have saved their earnings.

Physical Gold defends you against reckless government policies, because a bureaucrat can't just print more gold simply by pressing a few buttons.

Protect Your Wealth - Tax & Penalty Free!