How to Convert a 401k to Physical Gold

How to Convert a 401k to Physical Gold

Disclaimer: We are supported by our readers. We may receive compensation from links on this page if you use products or services because of our expert recommendations. Please read our Advertising Disclosure.

Investing a portion of your 401(k) fund into physical gold can be a smart strategy for several reasons. First and foremost, physical gold provides a tangible asset that can serve as a reliable hedge against market volatility and economic uncertainties.

While stocks and bonds can be subject to fluctuations and market risks, gold's value tends to hold steady or even increase during times of economic downturn or crisis.

By including physical gold in your 401(k) portfolio, you can add a layer of stability and diversification, reducing the overall risk exposure. Additionally, physical gold is a valuable long-term asset that has consistently preserved its purchasing power over time, making it an effective wealth preservation tool.

As part of a retirement investment strategy, physical gold can offer protection against inflation and help secure your financial future.

Before we get started:

Inflation and rising interest rates has destroyed many people's savings.  Many investors feel defeated and helpless, but you can fight back.

Gold and other precious metals have been used to protect against inflation for thousands of years.  And when you hold physical in a tax-protected savings account, it gets even better.

Opening a gold IRA can sound complicated, but it's really not.  

That is why we created a list of our most trustworthy investment companies, to make comparing and choosing the company best suited to your needs as easy as possible.


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

Protect Your Retirement Savings from Inflation & Taxes!

Table of Contents

Evaluating 401(k) Satisfaction

Many investors start with a 401(k) plan because it's offered by their employer. With a single form, contributions are automatically taken from each paycheck and allocated to stocks, bonds, and other products. However, savvy investors may want more from their saving efforts.

One of the major drawbacks to 401(k)s is their lack of selection. For example, investors can only choose from employer-approved stocks and options. There are plenty of other products in the marketplace today, including gold.

401(k)s don't typically allow for precious metals investments. Look for these opportunities in self-directed IRAs or Individual Retirement Accounts. Being satisfied with current investments can only help the investor find the right mixture for a bright retirement.

Knowing the Truth About Gold

Investing always has some risk involved. Gains and losses will happen at any time. By investing in physical gold, investors lower their overall risk. Previously, the investor may have had all paper assets.

Although they may have been a mixture of stocks and bonds, their value could've dropped at any time. Gold is a steady investment that usually gains value over the years. Incorporating gold into any portfolio reduces risk and improves future outlooks.

Currency always has a fluctuating value. Money doesn't have any inherent value to each dollar bill, for instance. It simply has a face value based on economic conditions. Gold is a physical object that can be held in the hand. It's been traded, bought, and sold for generations.

Gold's value remains strong throughout any economy. In fact, it has historically gained value over time. Investors must purchase the gold and securely hold it to see any returns.

Overall, gold allows an investor to diversify a portfolio. Any economic changes will barely impact a varied group of investments.

Learning About Rollovers

Because most 401(k)s don't allow for precious metals investments, investors can use a rollover to convert some or all the funds into physical gold. A rollover may sound complicated, but it's a simple process.

A rollover is a transfer of funds from one retirement account to another. It can occur between a 401(k) and a precious metals IRA, for example. Rollovers are possible between two separate IRAs too.

These transfers are critical in the investment world because they protect the investor from any taxation concerns. Because the money was never withdrawn from the account, it cannot be taxed.

It was simply moved with a rollover process. With funds in a precious metals or gold IRA, investors can now buy gold for the new account.

Knowing When It's a Good Move

Every investor should look at their monthly or quarterly 401(k) statements. Find any fees that are associated with the account, such as maintenance costs. Investors might look at any costs accrued across an entire year. Investors might be surprised at how much the costs add up over time.

Self-directed or gold IRAs have their costs, but they're often lower than 401(k)s. It's a good move to roll over at least some of the 401(k) funds into a gold IRA to save on fees alone. In most cases, 401(k)s have fees based on a percentage of the assets.

Rolling over funds is also a good move because of diversification. 401(k)s can't offer the varied options involved with a precious metals IRA. Gold, silver, and other products give investors an edge over inflation and substantial loss.

Starting the Move to Gold Investments

Before moving any funds, investors must learn about how a gold IRA functions. Investors sign up with a custodian who acts as the account's caretaker.

Custodians assist the investor with precious metals purchases and arrange for the products to be shipped to a separate facility.

This location is known as the depository. It's essentially an IRS-approved vault for investors' precious metals. Once received, the precious metals remain there under tight security.

Investors cannot buy the precious metals on their own. The IRS requires a custodian or middleman to facilitate any transactions. This process protects the investment so that it can be used as a tax incentive.

The initial step toward gold investment is to roll over money from the 401(k) to the gold IRA. These funds can then be converted into precious metals, which the custodian cares for from this point forward.

Choosing an Investment Amount

Investors must decide whether they want to use part of their 401(k) or all of it to fund the gold IRA. Because a diverse portfolio is always the goal, investors should only use part of the 401(k) for physical gold or silver investments.

Precious metals can be purchased in several weights and quantities. Investors must compare their 401(k) savings to their purchasing goal. For instance, investors may buy only a handful of coins to fund the gold IRA. Some coins can cost thousands of dollars. They can always buy more later on.

Contact the gold IRA custodian to open up an account for the precious metals. Investors need an active account to allow for a fund deposit. The rollover transaction is the next step.

Transferring Funds Into a Gold IRA

With an amount in mind, investors ask the 401(k)'s administrator to transfer funds into the gold IRA account. This transaction might require a phone call, email, or contact request through the administrator's website. Every 401(k) has a slightly different process.

Although today's typical banking transfers take a few seconds to facilitate, 401(k) transfers can take time. Investors might ask the administrator about rollover time frames. Currently, a rollover might take two to four weeks.

The IRS provides some wiggle room so that investors can avoid taxation, however. Investors usually have 60 days to move funds between accounts without penalty.

When the funds' post to the gold IRA, the custodian can then work with the investor about precious metals purchases.

Exploring Investment Products

Opening up physical gold to the nation for investment purposes also came with some limitations. Investors can't buy just any gold product. The federal government has specific requirements for gold that are allowed in a precious metals IRA.

For instance, gold purity levels must be at 99.5 percent or higher. This rule stands for gold coins, rounds, and bars. Silver has its purity requirements too.

Luckily, there are many different coins available to investors. Coins from across the globe can qualify, such as products from Australia, Britain, and Canada.

Because of these strict rules, it's critical to have a custodian who's well-versed in gold IRA legalities. As a result, every transaction will have quality products that fit all the tax rules.

There are specialized companies that work strictly with gold IRAs and associated products. Evaluating a few of these entities will get the investor to a comfortable place in retirement.

Introducing the Top 4 Companies to Help Convert a 401k to Physical Gold

  • 1. Goldco

Goldco is a precious metals investment firm that's been around for nearly 20 years. Investors may be familiar with the name because it's been highlighted on dozens of different media platforms. In fact, several celebrities even endorse Goldco.

This business offers consultations with its financial representatives. With a single phone call, investors can set up a self-directed IRA with an affiliate custodian and depository.

Goldco advertises a free Wealth Protection Kit that can be shipped out to an investor's home too. It gives investors time to look over IRA and precious metals transactions before rolling over any funds.

Additionally, this company has many reviews found online for further investor research. There will be a mixture of opinions, so investors should consider all perspectives. During the initial phone call, investors should ask for a list of fees, commissions, and other potential charges for the new account.

It's normal to have reasonable charges to set up and maintain a gold IRA. Requesting everything in writing will help investors make a solid decision.

Pros and Cons

Goldco has the advantage of being in business for almost two decades. It appears to have many industry contacts, which gives the investor plenty of custodian and depository choices. Other companies may only have a few affiliates as options, for instance.

Working with custodians and depositories can take some time. Investors may appreciate Goldco's customer service approach. Initially, investors call Goldco and agree to their terms of service. It appears that investors work through Goldco from that point forward. A single point of contact is attractive to some investors.

A disadvantage that's immediately recognized when visiting the website is the lack of pricing. Goldco encourages every investor to call for more information. They don't list product prices, fees, commissions, or any other costs. Investors who appreciate upfront pricing may be turned off by the website's vague terminology.

In addition, there's very little information about the types of gold or silver available for purchase. Presumably, investors learn more on the initial phone call.

  • 2. Augusta Precious Metals

Augusta Precious Metals is another gold IRA administrator with over a decade of experience. It has an A+ rating with the Better Business Bureau too. Investors who enjoy researching their financial moves will appreciate the plentiful online reviews found on its website.

This company makes it clear that they don't offer custodian or depository services. However, they name their affiliates for these duties. This fact gives investors a chance to research them as well.

Their website has a product page where investors can see what's available for purchase. Although they're generic photos, the product information helps with purchasing decisions when investors call the hotline.

The site clearly denotes which products can be used for gold IRAs or everyday purchases. This feature is extremely helpful to any investor.

Augusta asks investors to call for information and account activation. It cannot be performed online. Investors might have their questions ready for Augusta when they make the initial phone call.

Augusta precious metals homepage

Pros and Cons

Augusta doesn't have any formal complaints posted on the Better Business Bureau's website. For a business that's been serving the public for at least a decade, this fact reflects positively on Augusta. Their reviews are largely positive too.

Products approved for a self-directed IRA are listed and explained in full on the website. For example, investors get to know the purity levels of IRA-approved coins versus unapproved products.

This information isn't necessary, but it's extremely helpful for investors who want to know more details about investing in gold or silver. It offers a level of respect between Augusta and investors by detailing industry standards.

Augusta doesn't add pricing to their website either. This similarity between Goldco and Augusta means that any pricing questions must be asked with a phone call to each company. Investors have to commit some time to these phone calls instead of reading about rough values listed on the website. This disadvantage can be frustrating to busy investors.

  • 3. American Hartford Gold

This company guides converting 401(k)s and other IRA types into gold IRAs. They partner with several custodians and depositories in the industry. Their website offers a listing of these affiliates so that investors can make their own decisions on the best ones.

They have a lot of online reviews for a company that's less than 10 years old. Additionally, American Hartford Gold has an A+ rating with the Better Business Bureau. Their website has also been featured on many news programs, which gives investors a level of familiarity with the name.

The best way to see what this company can do for the investor is by giving them a call. Their website describes dedicated representatives waiting to take care of every investor. It appears that any transaction will be a smooth one with American Hartford Gold.

Pros and Cons

Investors may appreciate the current specials listed on the website. Depending on the month, investors might gain free coins or discounts on fees. They should always ask about these specials when calling the hotline.

American Hartford Gold makes the website as clean and concise as possible. The company makes it very clear that calling them is the best course of action. During the call, investors can ask about fees, current specials, and other details. These phone calls reveal what type of investor is on the line so that the company can discuss the most relevant information.

Investors might be concerned about the lack of pricing on the website. They're also met with an extremely limited contract found deep on the site's pages. It's written to protect American Hartford Gold from every angle. Ideally, investors should ask about pricing and verify any paperwork that must be signed during the phone call. Investors should be able to retain their consumer rights even with a precious metals purchase and 401(k) rollover.

  • 4. Red Rock Secured

Red Rock Secured is a financial advisor with many accolades from trusted review sites across the Internet, including Yahoo! and Google. Their website provides many different articles regarding gold and its importance in an investor's portfolio.

They appear to have a solid presence in social media with posts appearing on Facebook and other sites. An issue arises, however, when investors search for what Red Rock Secured does for the customer. They describe a three-step process, but it's extremely vague. It's not clear if this company performs custodial duties or simply acts as a consultant.

Reading reviews about the company can help investors see history. They might expand on just what Red Rock Secured has done for a gold IRA customer.

Pros and Cons

Red Rock Secured appears to stand behind any reviews whether they're good or bad. They provide links to many review sites for the investor's convenience. This level of transparency is refreshing.

This company follows the others with their lack of upfront pricing, however. Fees and commissions are not disclosed. Any product choices aren't available either. Red Rock Secured relies on phone calls to facilitate business.

In contrast, they're clear about their storage options. By naming the depository and its secure process, investors have a better idea of where their precious metals end up after all the transactions. A discussion about custodians would be a helpful addition to the site.

Investors have many choices in the marketplace to establish a gold IRA. Research, question, and double-check every company's policies before investing any funds. In the end, these funds will create a comfortable retirement.

Remember to read our list of the Best Gold Investment Companies to work with, before investing your hard-earned savings!

>> CLICK HERE to read our list of the Top Gold IRA Companies. <<

Charles Turner

Hi, I'm Charles Turner, founder of Turner Investments.  I created Turner Investments to provide education and guidance to individuals interested in personal finance.

My goal is to make Turner Investments a valuable resource for anyone looking to learn more about personal finance and make smarter investment decisions.

Related Articles