How To Move 401k To Gold Without Penalty: Complete Guide (2023)

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It's possible to convert your 401k to gold without causing undue damage to your financial situation. If you've discovered that your 401k isn't performing as desired, it could be time for you to consider switching to a gold-based investment. 

Although there is no guarantee that a gold investment will outperform a traditional 401k in the future, there are some reasons to invest in gold instead of a traditional 401k. Gold has been shown to secure its value in the long term.

In volatile times, gold can increase in value significantly. This is in contrast to traditional 401k plan, which could be subject to declines in value if the stock market were to plummet. Gold will not lose money in a time of economic uncertainty, such as a recession, making it an attractive option in volatile times.

So, how do you move your 401k to a gold IRA without a penalty?

How To Move 401k To Gold Without Penalty

To avoid penalty payment over moving 401k funds to a gold account, you must roll over the funds through the direct rollover process.

To directly roll over your 401k funds, you have to open a Gold account in your preferred financial institution. Then provide the gold account details (account name and number) to the administrator of your 401k account.

After validation of the process, the administrator of the 401k makes a wire transfer of the funds to the gold account; then, the funds automatically show in the new account.

In addition, you can choose to handle the movement of the funds to your gold account personally through the indirect rollover method. This method involves the withdrawal of the retirement fund from the 401k account. Then you deposit the fund into the gold account and ensure you complete the deposition process within 60 days.

Note: If the administrator of your 401k account holds 20 percent of the funds for taxes, you will have to replace the funds after the indirect rollover process is complete.

Ensure the gold account is tax-deferred for the indirect rollover process to work. Also, you must not deposit the money in your bank account unless you are at least 59.5 years old; else, you will pay the penalty for early withdrawal.

Will You Be Taxed On A 401k Rollover?

The rollover of 401k funds into an Individual Retirement Account (IRA) may involve tax, depending on how it's done.

According to the Internal Revenue Service (IRS), the rollover process is not taxable except if you move the pre-tax 401k funds to a Roth IRA or a designated Roth account. 

The taxation occurs because the Roth IRA account receives funds with post-tax earnings. In addition, if you roll over your 401k retirement funds into a traditional IRA, and you roll all the funds, you won’t pay any tax for the process. The funds remain tax-deferred until you withdraw the money permanently from the account.

Can I Invest My 401k In Gold?

Interestingly, investors who own a 401k account cannot hold gold as physical assets. Still, a 401k retirement plan allows owners to purchase the precious metal as ‘paper gold’ in mutual funds or Exchange-traded Funds (ETFs) form.

Can I Buy Physical Gold With 401k?

You cannot buy physical gold with a 401k. To buy physical gold with your retirement fund, you must have a self-directed IRA. This account allows you to buy gold and other precious metals and keep them as physical assets with a third-party custodian.

Where Is The Safest Place To Move 401k Money?

Today, a dollar will not buy the same value of goods in the next few years due to inflation. Therefore, there is a need to level up against inflation to hedge the value of paper money. Hence the safest way to hold the value of your 401k fund is to roll over the funds into a gold IRA plan.

A gold IRA is a self-directed account that can hold precious metals, coins, bullions, and bars such as gold, silver, platinum, and palladium as physical assets.

Furthermore, a gold IRA account is a means to diversify your retirement fund for a high-profit opportunity. High-profit opportunity is possible because gold and other precious metals as physical assets have a track record of price stability even when the stock market crashes. It is believed that when the stock market crashes, the price of gold increases or remains constant and vice versa.

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How Do I Protect My 401k From A Stock Market Crash?

Market volatility is inevitable, and you cannot determine the extent of a stock market crash. Anytime you input funds in the stock market, there is always a risk, so talking about money is as important as your retirement fund. The decision-making step is crucial to minimize loss.

Below are some of the strategies you can follow to minimize risk in crashing the stock market as no business is risk-free.

  • Diversification and assets allocation: Knowing the right assets allocation is crucial in protecting your 401k in the stock market.
  • Rebalance your portfolio: changing the amount you invest in a particular asset is a means of protecting your retirement funds from crashing.
  • Ensure you have some cash at hand: Financial professionals often recommend to retirees to ensure they have a substantial amount of cash at hand that can cater for up to five years of expenditure.

What Is The Best Thing To Do With A 401k When You Retire?

One of the most challenging decisions for young retirees is knowing what to do with their 401k fund when they retire to create a stream of income. Also, the decision depends on the individual since there is no risk-free one-size-fits plan.

The two primary decisions for your retirement savings are to keep the money in your 401k account or roll over the funds to an IRA.

Rolling your funds to an IRA account, especially a gold IRA plan, is the best thing with your 401k. A gold IRA account is a self-directed plan that offers an avenue to hold precious metals such as gold, silver, platinum, and palladium as physical assets. It also allows you to diversify your portfolio into more investment choices.

Below are a few reasons you should consider rollover with your 401k.

  • It offers several investment choices to keep a stream of income.
  • It offers flexible withdrawal options.
  • Investment in precious metals gives a hedge over inflation, deflation, and devaluation of paper currency.
  • You can get an annuity option from any IRA plan.
  • You can get personalized advice from the financial institution holding your IRA plan on the best investment choice to select.

Where Should I Roll My 401k?

It is most advisable to roll your 401k into a gold IRA or any physical gold investment plan. The gold and other precious metal markets are less volatile than the stock market since the value of these precious metals are significantly stable and partially independent of the stock market.

In addition, the gold IRA plan allows you to invest in ETFs and mutual bonds.


Moving your 401k into gold can be done without penalty if you obey all the IRS rollover rules in both the direct and indirect method of rollover. The process can be complex, so I advise you to contact a reputable precious metals company that can run you through the process smoothly to ensure you don't make a mistake and be penalized.

I highly recommend Augusta Precious Metals as they are the most trusted company in the space. I have talked extensively with their team and there's a reason they have ZERO complaints since their inception in 2012. They are genuine people who care about getting your finances sorted.

You can read my full Augusta Precious Metals review here or click the link below and get your free investors kit which will teach you more about rolling over your 401k without a penalty.

Augusta Precious Metals

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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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