How to Buy Gold With My 401k

Can I Put My 401k into Gold?

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If you have a 401k account, you might want to use those funds to invest in gold. Investing in gold provides benefits that you just can't experience with other types of investments. When it comes to investing your retirement wealth in gold, you'll find that this is one of the best ways to diversify your savings. It provides an effective way of protecting your existing savings as you use your gold holdings to increase your wealth.

The IRS regulates how you can invest in physical assets with your retirement savings, and violating those rules can subject you to income taxes and other penalties. You can avoid a situation that costs you more than you expect while also investing in gold by learning more about the IRS-approved methods for investing in precious metals.

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How to Buy Gold With My 401k

How Can You Invest in Gold With Your 401k?

You can choose to invest directly or indirectly in gold with your 401k funds. While indirectly investing in gold won't allow you to enjoy the full range of benefits that directly holding gold provides, it can provide you a way to grow wealth through a company's gold holdings. These options include investing in gold mutual funds or gold ETFs.

Gold Mutual Funds

Generally, mutual funds invest in companies that focus on a specific industry or product. When it comes to gold, there are mutual funds that invest in companies that discover and mine gold. As these companies generate more gold production, the values of their individual stocks will rise. As a result, the funds that invest in those companies will also increase in value. By investing in gold-focused mutual funds, you can use these increases to grow your own wealth.

Gold ETFs

A gold ETF tracks the market value of gold and allows you to invest in gold bullion that's held by a third-party. This allows you to invest in gold without having to worry about the maintenance of the gold. While this is another way to benefit from gold investing, you won't be able to experience the full range of advantages that you'll get from owning your own gold as a physical asset.

While paper investments, such as funds and ETFs, offer a convenient way to use your 401k funds to invest in gold, you'll still be missing important benefits of directly investing in gold. The better option is to roll your 401k funds over into a self-directed gold IRA. This option does involve a slightly more complex process to get started, but initiating your self-directed gold IRA will provide you with a more advantageous way to diversify your retirement investments.

Before learning more about this process, it may help to understand how owning gold will benefit you. The next section explains why a self-directed gold IRA is beneficial in helping you protect and grow your savings.

How to Buy Gold With My 401k

What Are the Benefits of Investing Directly in Gold?

There are both short-term and long-term benefits to investing directly in gold. Here are just a few ways that owning your own gold coins or bullion will help you protect your financial future. These benefits apply to financial emergencies that might arise as well as helping you protect your retirement savings.

It's a Better Option for Diversification

Even if you invest in gold mutual funds, your savings will still be dependent on a strong and growing market. If something occurs that has a negative impact on the market, most stocks and funds will be affected. This means you could still lose money on your gold mutual funds or ETFs.

However, if you own physical gold, that wealth will be protected in this type of situation. Since gold is a physical asset, it's not subject to the same losses as paper investments. In fact, the value of gold often rises as paper investments lose their value. You can choose to liquidate your gold at a time when the value is higher or you can hold onto your gold and watch its value continue to rise.

Gold is a Physical Asset

The importance of owning physical assets, such as gold, can never be underestimated. Imagine there's a data breach or an event that compromises digitally-stored funds. In that situation, your wealth might be lost and there won't be a way to retrieve it. If all of your wealth is stored digitally, you could end up in a situation in which you'll have to start saving from scratch.

If 15% or more of your wealth is invested directly in physical gold, those savings will stay protected. A data breach or digital glitch can't erase your gold. Your IRS-approved depository will still have your gold, and they will continue to protect it. While the chances of something this catastrophic occurring are remote, you'll enjoy the peace of mind of knowing that your wealth will be protected in that situation.

Combat the Rising Costs of Inflation

There are two types of inflation. The first type is the gradual inflation that we experience from year to year, causing a rise in costs that occurs at a slower pace over time. This is why a new car costs significantly more today than it did in the 1970s. The second type of inflation occurs more suddenly as a result of increased government spending and the printing of more currency. These factors cause the dollar to lose value at a faster pace, leading prices to increase at a dramatic rate.

When either type of inflation occurs, prices of products rise and the value of those items increases accordingly. This is as true for physical assets as it is for everyday items, such as groceries and clothing. This means the value of your gold holdings will remain consistent, and your gold's worth will actually increase. In times of high inflation, your gold will be worth more and you'll be able to buy more with it.

Tighten Your Control Over Your Wealth

Finally, a self-directed gold IRA will help you maintain better control over your investments. In a 401k, your fund manager decides where to invest your wealth, although they might take your thoughts into account. In a self-directed IRA, you can determine just how much of your wealth is invested in gold.

Additionally, it's easier to predict how your investments will perform in a gold IRA. While paper investments can be more volatile, the value of gold changes at a more consistent rate. This will help you determine how much gold you'll need to meet your retirement goals. While gold can and does experience losses in its value from time to time, gold rebounds faster than paper investments. Your losses will usually be temporary, and you can combat them by buying more gold when its value does drop.

Our Best Gold Investment and Rollover Companies:

How to Buy Gold With My 401k

What is Involved in Starting a Self-Directed Gold IRA?

Once you have decided to start your own self-directed gold IRA, you might wonder how to set up your account. There are several steps involved in getting started. While this can seem overwhelming at first, you'll find that you just need the patience to complete each step. Additionally, there will be professionals to help you with this process along the way. Before you know it, you'll be ready to start buying gold.

Set Up Your Self-Directed IRA

Your first step will be to find a self-directed IRA custodian. This involves doing your due diligence in choosing a custodian that will provide you with the best level of customer service. Any self-directed IRA custodian will have an application process that's similar to opening an account with a bank or investment firm. You'll be asked to provide some basic information. The custodian's customer service personnel can help you answer any questions that you find confusing or unclear.

It can help to look for a self-directed IRA custodian with experience in handling gold investments. They will be more familiar with the IRS' regulations regarding gold and other precious metals that are held in a self-directed IRA. You should also look for a custodian with a good reputation among investors. Check online reviews for each custodian and look at each custodian's website to learn more about the services they offer.

Choose a Gold IRA Company

You'll also need to find a gold IRA company and open an account with them. The gold IRA company will help you buy IRS-approved gold with the funds in your self-directed IRA. This is another lengthy process that involves some research since you will want a company that will offer you the best level of service. While you can change companies later if you're dissatisfied, it's better to take your time to find a better company at the outset.

When looking for a gold IRA company, there are several factors to consider. You'll want to choose a company that provides extensive customer service. Be sure they will help you set up your account and provide assistance for as long as you maintain your account with them. They should provide a wide range of products that meet the IRS' requirements for purity. In selecting a gold IRA company, you will also want to pick a company that provides a library of educational resources. A company that offers free access to learning materials demonstrates an interest in helping their customers get the most out of their relationship with them.

Roll Your 401k Funds Over

Your next step will be to roll your 401k funds over into your self-directed IRA. This is the most complicated part of the process since an incorrect rollover can subject you to income taxes and early withdrawal penalties. For this reason, you should complete this process with the help of your 401k administrator and your gold IRA company's customer service team.

One way to roll your 401k funds over is to request a check for the funds and physically deposit the check with your gold IRA company. It's important to note that the funds must be deposited with the rollover application submitted to the IRS within 60 days. If you don't meet that deadline, the IRS will assume you have taken an early withdrawal from your 401k account. While physically depositing a check can give you better peace of mind, this method increases the chances of something going wrong. For this reason, it's not the method that most financial experts recommend.

The second and more common rollover method is a digital transfer. The amount you want to put into your self-directed gold IRA will be wired from your 401k directly into your gold IRA. This helps you avoid delays in transferring your funds. In addition to avoiding complications with the IRS, a wire transfer will be processed faster. This can help you begin investing in gold that much sooner.

Choose a Precious Metals Depository

The final step in the process is to choose an IRS-approved depository. When buying gold for retirement investing purposes, the government won't let you store the gold in your home. They require that the gold is kept in a secure depository that they have approved. Fortunately, there are many depositories throughout the United States and the IRS has approved some international depositories as well.

When you choose a gold IRA company, you'll find that they partner with one or more depositories. It may be more convenient to use one of the recommended depositories, and doing so may help you save on some storage and maintenance costs. If you find a depository that you like better, you're free to use them. For example, an out-of-state depository may offer lower fees or might help you save on income taxes when you begin withdrawing your funds at retirement. There are many options for depositories, so take the time to pick the one that will best meet your needs.

How to Buy Gold With My 401k

Which Gold IRA Companies Offer the Best Customer Service?

While you should take your time to research a variety of gold IRA companies, it can help to focus on the top gold IRA companies in today's market. The following companies maintain consistent A+ ratings with the Better Business Bureau and have high numbers of positive customer reviews.

There are many different gold IRA companies that offer similar services. However, the following companies are the top in their class, offering more of the services you want from your company. Rather than focusing on making sales, these companies focus on providing superior customer service to each investor. This helps them in building long-lasting relationships. By looking at these companies first, you can shorten your search. You can learn more about each of the top 3 gold IRA companies below.


One of the most common advantages that customers cite in their positive reviews of Augusta Precious Metals is their fee transparency. They keep their fees as low as possible to help their customers enjoy a higher ROI. Additionally, you'll be able to review their fee schedule in advance to help you anticipate costs. As a customer, you'll have access to educational resources that focus on precious metals investing. In terms of buying gold products, they offer a money-back guarantee and a pledge that assures customers that they will get fair pricing.

#2. Goldco


For retirement investors, Goldco's superior quality of customer service is what makes this company stand out. In addition to assisting with your account setup, they will offer assistance in managing your account and in using gold to meet your retirement goals. While they do require a minimum investment, new customers will receive a gift of silver worth 10% of their initial investment amount. They also provide a wide range of educational resources to help you learn about investing in gold and evaluating the market. Goldco offers a free start-up kit to help investors learn more about their services and precious metals investing.

Investors can get started with American Hartford Gold easily by relying on their friendly and knowledgeable customer service representatives. You can get help with every aspect of setting up your gold IRA from rolling over your 401k funds to choosing the best IRS-approved gold products to meet your retirement goals. Like the other options on this list, American Hartford insures gold deliveries to your depository, and they won't charge you for the delivery. They offer a buyback program that includes a price-match guarantee.

Each of these companies sells IRS-approved gold and silver products. Additionally, they may sell gold and silver that doesn't meet the IRS' purity standards. These products are available to collectors who want to keep gold and silver in their homes. For this reason, it's important to specify that you're buying gold for your self-directed gold IRA. This can help you avoid confusion in converting your retirement savings to gold and silver.

Closing Thoughts

It's still important to diversify your investments, so you shouldn't abandon all paper investments. Splitting your savings between funds and physical assets, such as gold, will help you minimize your losses through economic downturns. In this way, maintaining some of your wealth in direct gold investments will help you create a safety net by protecting a portion of your wealth. This can help you feel more confident in using the remainder of your savings to pursue a more aggressive investing strategy.