What Is a Gold IRA Rollover

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Why you should consider switching your 401(k) investment to a Gold IRA​

Investing in gold is appealing for many investors planning for retirement as it offers diversification away from other volatile investment markets.

Investors are unable to own physical gold in a general IRA account, other than the option to invest in stocks of certain gold mining companies. However, with a self-directed IRA, investors are able to invest in assets such as gold and other precious metals. As such, a Gold IRA has the potential to be a great retirement investment solution, giving investors all the tax benefits of a Traditional IRA with fewer costs and greater portfolio diversification. 

So have you heard of a Gold IRA before and considered switching your 401(k) to a Gold IRA account? In this article, we will give you the breakdown of what exactly a Gold IRA is, the benefits a Gold IRA offers, and an overview of the process of switching your 401(k) to a Gold IRA.

Top companies include Augusta Precious Metals, Goldco, Birch Gold Group, and American Hartford Gold.

Augusta Precious Metals

What is a 401(k)?


A 401(k) is a retirement account that allows you and an employer to make contributions. A 401(k) allows you to make pre-tax and post-tax contributions depending on your preference and tax situation. Employers usually make a matching contribution to the account, resulting in the accumulation of funds that are then withdrawn in retirement in later years ahead.

401(k)’s can be great for potential tax savings, but they do come with some drawbacks. The funds contributed to a 401(k) usually go to investments in the stock market, leading to the growth of your investments based on the health and growth of the stock market. If the stock market is down, odds are your investments are too.

The employer contributions of the 401(k) are also only available if you are employed by that company. If you leave the company or even lose your job, you will also lose the employer matching contribution. 

401(k)’s are a great investment for many planning for retirement, but this does have some potential risks and limitations. As such, many investors and people planning for retirements make the decision to consider other more stable investments, such as a Gold IRA.


What is a gold IRA?

A Gold IRA is a different type of retirement account that allows you to invest your money into gold and other precious metals, like silver and platinum.

Through a Gold IRA not only can you invest in physical metals, but you also have the ability to invest in stocks in the precious metal industry, such as coins and bullion. A Gold IRA is held separately from your other retirement accounts as you will be purchasing physical precious metals. In this case, the physical gold will be stored away with this being the big difference between a Traditional IRA and a Gold IRA account.

If you’re considering taking the leap of faith and rolling over your 401(k) to a Gold IRA, it’s worth understanding the IRS requirements for these types of IRA accounts. It’s important to note that only certain companies can hold the Gold IRA investment, and traditional brokerage companies are not able to help with the setup. It is recommended to set up a Gold IRA account with companies such as Augusta Precious Metals, Goldco, Birch Gold Group, and American Hartford Gold.

Despite the assets held in a Gold IRA differing from a Traditional IRA, the rules and regulations are similar. In 2021, the $6k contribution limit is in place for individuals under 50, and $7k for individuals over 50, which is the same for Traditional IRAs. The same 10% early withdrawal penalty also still applies for investments taken out before reaching the age of 60 years old.

Birch Gold Group

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How do I roll my 401(k) to a Gold IRA?

There are a few different options to roll your 401(k) investment into a Gold IRA. If you leave or lose your job, you will have to determine what to do with your existing 401(k) funds. Many people choose to cash them out, which is not a wise decision based on the early withdrawal penalties and income taxes.

Alternatively, other options include maintaining separate 401(k) accounts from your old and new employer and paying double the maintenance fees or attempting to roll your old account into your new one. The preferred option may be simply to roll your existing funds into a Gold IRA.

When rolling your 401(k) to a Gold IRA you can either choose an indirect rollover, which includes cashing out your existing funds and then depositing them into a Gold IRA. The funds need to hit the new Gold IRA account within 60 days to avoid taxes and penalties. The alternative would be a direct rollover, which is when the 401(k) custodian directly sends the funds to your new Gold IRA, bypassing any withdrawal issues.

It’s worth noting that if your 401(k) is through a government agency, additional steps will be required in the transfer process.

American Hartford Gold

Benefits the move can provide

A Gold IRA offers many new benefits that a traditional IRA does not, such as:

401K to gold IRA rollover guide

Fees associated with the Gold IRA

As many investors are aware, there are fees associated with any type of investment or retirement accounts. However, when choosing a Gold IRA you are able to benefit from reduced fees in comparison to other Traditional IRA accounts. Common fee savings with a Gold IRA include:

Get Your FREE Gold IRA Guide Here!

Companies that specialize in Gold IRA?

As mentioned above, only certain companies can hold Gold IRA investments with traditional brokerage firms not able to do the setup. If you’re looking to go ahead with the rollover process from a 401(k) to a Gold IRA, it’s recommended to work with one of the following companies:
Choosing the right company can be difficult, but with some due diligence and research, you can find the perfect fit for you and your investment opportunities. 

Our Gold IRA Company Recommendation

Although all the companies listed above are excellent choices, we recommend Augusta Precious Metals as the top Gold IRA company to work with. 

Augusta Precious Metals has a highly trusted name in the gold investment industry, with an A+ rating from the Better Business Bureau, as well as a AAA rating from the Business Consumer Alliance, and loads of reviews from satisfied customers.

They can help you move an existing registered plan into an IRA, as well as set up a new one. Augusta Precious Metals team members are always there to answer your questions and concerns, and to help you pick the right precious metals that will suit your needs. With your personal financial goals in mind, the Augusta Precious Metals team ensures a smooth and clear transfer process with no additional IRS fees.

Augusta Precious Metals offers a wide variety of precious metals so that you can diversify your portfolio with a selection of gold and silver bars and coins. As you work your way towards retirement, continue to add to your IRA each year to grow your wealth.

We are confident that you’ll choose Augusta Precious Metals as your top pick as well. Visit the Augusta Precious Metals website today and fill out their application form to begin the process in setting up your IRA. You’ll be happy you did!

Augusta Precious Metals

Frequently Asked Questions (FAQ)

A Gold IRA is an example of a Self-Directed IRA. Self-Directed IRA’s were designed to give individuals more freedom in the selection of investments that they could hold in their retirement account. A Gold IRA is unique to precious metals, where the investor/individual has the ability to hold gold, silver, and other precious metals such a platinum and palladium in their account rather than being limited to traditional stocks and bonds.

By holding precious metal investments in a Gold IRA, this gives the ability for individuals to make their portfolio more diverse and prepare themselves for future financial success. Having a diversified portfolio makes for a better chance to survive a stock market crash and still have some of your funds held in other categories, such as gold.

There are various options when it comes to investing in gold. One option is to purchase gold coins or bars from a local retail shop or gold investment company. You may then hold the metals until you are satisfied with their growth, ready for retirement, or need them for another expense. 

Another option to invest in gold is by setting up a Gold IRA. These are a form of a Self-Directed IRA, only your funds can be held in gold rather than stocks and bonds. This is a good way to invest in precious metals without worrying as much about taxes.

The value of a gold coin increases as the value of spot gold increases. The number that is printed on each gold coin (known as the face-value) is not an accurate reflection of its true valuation. In fact, its value is likely much higher than the face-value based on the current price of gold today.

Depending on your age, current financial position, and personal preferences, the answer to this question will vary per person. If you are coming up on retirement, you’ll want to take fewer investment risks and may not want a large portion of your money in gold. If you’re still young and have more time to take greater investment risks, you may want a larger percentage of your portfolio invested into gold. 

Like many investments, it is optimal to buy at a low value. Generally speaking, when the stock market is over-performing, the value of gold is at a much lower amount. Gold also follows some trends such as a decrease in certain months of the year, including January, March, and April.

It is always a good idea to seek out a financial advisor to help discuss the best options for your current situation. This way you can shift your investments based on what makes the most sense for your financial goals, and the current economy.

Your current plan may not give you the option to invest in gold, but there are numerous other plans that allow gold investments. Keep in mind that there are specific rules set out by the IRS regarding how gold can be bought and stored. Because of these rules, it’s important to find a reputable company to work with.

You are legally allowed to do a 401(k) rollover and avoid paying taxes and penalties, but to do this you must follow the correct process. Start by contacting your current 401(k) plan and explain your situation. The rollover may take several weeks or months to complete, so it’s best to begin as soon as possible.

Traditional 401(k) plans and IRA’s are tax-deferred savings accounts, meaning you do not need to pay any taxes on your contributions. Once you retire and eventually withdraw your funds, you will pay taxes on those withdrawals. You will not get any tax breaks if you purchase gold for personal ownership. Right now, the only way to avoid paying taxes on gold is by purchasing it through your 401(k) plan or IRA.

Although this process is a bit tricky, you absolutely can purchase physical gold in your 401(k) plan. Since your IRA cannot be the seller and holder of the gold, they will need to store the physical gold with a third party. You are also not personally allowed to hold the gold. You may only keep gold and silver in a plan of this type if someone else is storing it, according to the IRS. While you will not be allowed to have physical control over the gold, you may still be allowed to access the storage facility.

Yes, any gains made on the gold held in a Gold IRA are subject to capital gains taxes. Additionally, if you take a distribution from the Gold IRA before you reach the age of 59 and a half, you may be subject to income taxes and a 10% early withdrawal penalty. Things may differ depending on whether you have a traditional IRA or Roth IRA.

No. You are not allowed to take physical possession of the gold or other precious metals held in an IRA account. 

No. Home storage is not allowed and could have serious tax implications if you are found to be taking physical possession of the gold held in your IRA. You must store the gold with an IRS-approved custodian. Any company that promotes home storage is not providing sound advice and should be avoided. 

No. The IRS does not allow precious metals to be stored in a safe deposit box. The custodian/depository must always maintain possession of the gold.

This is a tricky question. 

Mostly, no. For most folks, it’s impossible to take physical possession of their gold without paying severe fees.

There is however a workaround for very (VERY) few individuals. 

A “Checkbook IRA” allows the IRA owner to have more control over their investments. They can use an LLC to make investment decisions and hold assets on behalf of the IRA. The LLC is owned by the IRA and managed by the IRA owner or someone else. The assets, including precious metals, can be stored in a place chosen by the LLC, like a storage facility or the IRA owner’s home as long as it’s secure and insured. Though, the IRS has strict rules for using a Checkbook IRA and storing IRA-owned assets. 

Some of these rules include:

  • A minimum net worth of $250,000.
  • Must have a corporate legal counsel.
  • Ownership must be shared among multiple individuals.
  • And much more

Keep in mind that this loophole is not recommended. There is a possibility that you will be penalized and even possibly disallowed from future investments. It’s not worth the risk, even if you do meet all these requirements. 

Remember that your specific situation and goals should always be discussed with your tax advisor.