401k To Gold IRA Rollover: Complete Guide (2024)

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In the contemporary world, investors and retirees do all possible to protect their wealth from volatility, inflation, and currency depreciation using gold. Gold is a tangible and durable asset that retains its value or yield increase during inflation, deflation, crashing stock market, or devaluation of paper currency value.

Gold offers an excellent way of wealth diversification as an investor or a way to diversify your 401k retirement fund to a less volatile asset.

Suppose you think of owning gold as a physical asset instead of gold as stocks and funds. In that case, you should consider creating a gold individual retirement account (IRA). Proceed on this guide to understand Gold IRA, why you should own a gold IRA, and how it is a better retirement plan.

What is a Gold IRA?

A traditional or Roth gold individual retirement account (IRA) is a self-directed retirement account used to hold precious metals, coins, bars, and bullion such as gold, silver, platinum, and other IRS-approved valuables as physical assets.

In contrast to a regular retirement account (IRA and 401k), you can invest in stocks, bonds, and mutual funds with physical ownership of the assets. A self-directed Gold IRA offers a retirement platform where owners can invest in alternative gold-related investments. Commonly called 'Paper-based assets, such as stocks, mutual funds, and bonds.

Furthermore, gold IRAs follow the conventional tax benefit rules, contribution rules, and disbursement rules as other regular IRAs. Recently, IRS implemented an additional tax for self-directed gold IRA because of the complexity of the account’s content (tax for record-keeping and report).

Why Rollover A 401k Into A Gold IRA?

Why Rollover a 401k into a Gold IRA

Are you searching for possible ways to diversify your retirement fund? Or do you want a retirement option that is primarily stable against the volatility of paper currency and the stock market? In either case, rolling over your 401k fund to a gold IRA is your best shot.

Gold IRA retirement plan or any physical gold investment plan is appealing since the value of gold is significantly stable. And gold typically moves in the direction opposite the stock market. Therefore, if the stock market crashes or performs poorly, gold properties are mainly on the rise and vice versa. Below are some reasons why you should Rollover your 401k plan to a gold IRA:

To Create a Diversify Portfolio

Investing all or part of your 401k retirement plan in a gold IRA of physical gold and other precious metal creates a non-correlated asset with a track record of stability against stock markets and paper currency, especially when stocks, currencies, and government wavers.

Gold Hedge against Inflation and Deflation

Inflation affects stocks, mutual funds, bonds, and other security investments, which devalues your 401k funds. The less volatility of gold’s value gives a hedge over inflation and deflation. It makes your gold portfolio stable even at a high inflation rate.

High-Profit Opportunity

Over the last decade, the historical performance of gold shows about a 99% increase in value. Other precious metals such as palladium and silver have shown great profit potential over the last decade.

As a case study, in the previous ten years, gold has only seen a low of $1,049.41, a high of $2,067.16 per Troy Ounce, with a current price of $1,950.09. Gold has proven itself a potential asset to obtain as a retirement plan.

However, no matter how appealing the gold investment plan looks, it's essential to understand that there's no investment without risk. The same applies to gold IRA; it isn't a risk-free retirement plan. The value of gold can rise and fall, and as a physical asset, it is vulnerable to theft. However, we strongly advise you to insure your assets against such incidence.

401k to Gold IRA Rollover Guide

What’s The Difference Between a Gold IRA Rollover and Transfer

IRA rollover is the movement of funds from one retirement account to a traditional or Roth IRA. This process is typical when one changes employer and wants to move retirement funds from the former employer’s company retirement plan, e.g., 401k, into a Gold IRA. The gold IRA rollover process is also possible if you wish to switch from any IRA plan to a gold IRA plan.

Once you've decided to own your 401k retirement fund as a physical asset in a gold IRA, you've to open a gold IRA. After then, you contact your 401k plan managing company to start the rollover process. The rollover process is possible in two ways: Direct Rollover and Indirect Rollover.

Direct Gold IRA Rollover

This form of Rollover is known as a trustee-to-trustee transfer. The direct Rollover is a simple process that involves the wire transfer of funds from your 401k plan to the gold IRA. Let's say you switch jobs. Implying that you can no longer contribute to your former company's 401k plan, and you wish to move to fund in the retirement plan to a gold IRA directly.

To roll over the 401k fund directly, you need to open a gold IRA. You contact the administrator of the 401k to notify of the rollover plan. To make an effective direct rollover, you need to provide the administrator of the 401k account your gold IRA details (name of account and account number).

Depending on the financial institution you own the gold IRA account, they may ask you to verify the 401k from its administrator. Next, the employer will draft the amount available for Rollover and wire the fund to the financial institution you own the gold IRA. The transaction occurs between the 401k administrator and the gold IRA financial institution.

Indirect Gold IRA Rollover

With the indirect gold IRA rollover, the trustee/administrator of the 401k plan will send you a check through email for the amount of the Rollover or deposit the retirement fund in your account. Then you will need to deposit it into the gold IRA.

The most critical factor in indirect Rollover is to ensure you deposit the check or the amount paid to your account into the Gold IRA account within 60 days. Suppose you fail to complete the process within 60 days.

In that case, IRS will treat the deposit as an early distribution; and you will pay additional income tax to deposit the fund. In addition, you may pay a 10%  fee for early distribution as a penalty for withholding such an amount.

Survive Double Digit Inflation

What’s The Difference Between a Gold Rollover and Transfer

When it comes to funding gold IRA, you can execute this process in two ways: Transfer or Rollover.

A transfer is a risk-managed movement of financial assets between retirement saving accounts (e.g., 401k to gold IRA) by the custodians of the financial institution you own the accounts.

Accordingly, Rollover involves the movement of funds from one type of account to another. In Rollover, your 401k is first turned over to you and then deposited into your gold IRA. A significant example of Rollover is the movement of 401k funds to gold IRA.

In addition, several rules guide gold IRA rollover, and investors must follow strictly as any attempt to disobey the laws may lead to IRS-imposed penalties. However, fewer rules govern IRA transfer. Below are some of the significant differences between gold IRA transfer and Rollover.

Gold IRA Transfer

Gold IRA Rollover

There is no early withdrawal penalty, implying you can transfer to your gold IRA account at any age.

The distributed funds are subjected to 10% early withdrawal penalties if you are below the minimum withdrawal age of 59.5.

Deposition of the fund within 60 days is ineffective.

A 60-day transfer rule in which the account holder must pay the deposited amount to the gold IRA is effective.

The disbursed fund is not taxable.

If the disbursed fund violates the 60-day deposition rule, the financial institution regards it as ordinary income taxable.

There is no annual limit to the amount you can transfer.

Holders of IRA are allowed to make a rollover per year.

Pros and Cons of Gold IRA


  • Create a diversified retirement portfolio.
  • Hedge against inflation.
  • Low risk making it perfect as a retirement plan.


  • No dividends or interest
  • Not liquid.

IRAs are for everyone, but the gold IRA plan is not for all who intend to own an IRA. Although gold has a track record of reliability and stability against the financial market, this doesn’t make the gold IRA the best plan for the retirement fund. Hence, the gold IRA unarguably has its benefits and disadvantages. This section will discuss some pros and cons of the gold IRA.

As previously discussed, a gold IRA helps create a diversified retirement portfolio. Investors who understand gold and other precious metal assets during the financial market crash know they could use gold as a hedge due to less asset volatility. Historically, gold has more stability than other security investments, and it's believed to often move in a direction opposite to stock.

However, the account holder of the gold IRA plan must be diligent enough to evaluate all assets in the account before making a buy/sell decision.

Also, fixed-income investment is a low-risk means of owning a retirement plan. Still, inflation may significantly affect the value of its returns. But if the effect of inflation on fixed-income investment bothers you, investing in gold is a much lesser-risk means of having a retirement plan.

Furthermore, one of the significant disadvantages of a gold IRA is the absence of dividends or interest. So holding gold in your IRA does not give any yield aside from its increment in value.

In addition, gold isn’t a liquid asset that you can easily convert to cash. So once you reach the required retirement age, you need to make a Required Minimum Distribution (RMD)  which makes withdrawal a little tedious.

Frequently Asked Questions

Is It A Good Idea To Rollover A 401k To IRA?

Rolling your 401k fund to IRA depends on you. For many people, rolling their 401k into an IRA is a great choice to diversify their retirement fund. It allows them to avoid tax as the retirement fund grows. Also, IRA offers more investment choices, such as Exchange Traded Fund (ETF), mutual funds, stocks, bonds, and other security investments.

How Long Does It Take For A 401k To Rollover To IRA?

A 401k to an IRA rollover typically takes two to four weeks to complete the process.

Why Invest in Gold?

Gold is an excellent precious metal with a stable, increasing value record. Gold has been seen by many as a hedge against the volatility of stock markets, mutual funds, and other security investments. Many investors also invest in gold as they believe paper currencies may lose their value to war, natural disasters, and political fault.

Also, it is advisable not to own gold as your only investment. Still, you can hold it as part of your diversified portfolio.

Final Thought

A 401k to IRA rollover is common when one switches jobs and moves retirement funds from the employer to the IRA. The general process is not complex, but it is advisable to contact your financial institution and the 401k administrator to determine the best way to move the fund.

I highly recommend getting in touch with Augusta Precious Metals who are the leading industry experts that will guide you smoothly with your Gold IRA rollover. Visit them below to get your free investors kit or check out my detailed Augusta Precious Metals review.

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About Roy Guller

I have been an investment adviser for more than 30 years and managed more than 500 million dollars for my exclusive group of clients. My expertise lies in retirement funds and I want to share my wealth of experience with you so you can make the right decisions for your future.

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