401k To Gold IRA: Do It Right & Without Penalties

How To Move A 401K To Gold Without A Penalty

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Do you want to transfer some or all of the money in your 401(k) into a gold IRA? People do it every day without a hitch, but it's essential to follow the proper steps to avoid getting penalized by the IRS. Making a correct transfer of funds is not rocket science, but if you work with a reputable gold IRA firm, the process is much easier, safer, and totally streamlined.

What's the best way to get a handle on how to begin? First, anyone who currently has a 401(k) and wants to park a portion of the funds in a self-directed IRA (SDIRA) needs to review the standard steps, as noted below. The other crucial component of the process, which is included in the steps, is to evaluate the gold IRA firms and choose which one best suits your needs.

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401k To Gold IRA: Do It Right & Without Penalties

Benefits of Gold IRAs

It's important to know the main reasons that so many working people, retirees, and people of all ages elect to put at least a portion of their retirement money into a gold IRA. While there are dozens of complex motives, the most common ones include the potential tax benefits, the fact that gold is the perfect long-term asset for retirement accounts, and that gold IRAs are the "self-directed" type, which means you make every decision about the account.

Tax Benefits, Potential Earnings, & Control

In other words, gold IRAs offer excellent tax benefits, have a massive upside profit potential, and put you in full control of your retirement money. And, even if you don't want to transfer the entire amount in a 401(k), it's still possible to achieve a high amount of portfolio diversification by putting a portion of the funds into a gold retirement account.

Asset Choices

Note that 401(k)'s, set up and run by employers, typically offer very few asset choices. The normal menu usually includes low-interest asset classes like mutual funds and a very limited number of ETFs and government securities.

Workers who want a chance to earn a potentially better return and take a bit more risk routinely choose to transfer all or some of their 410(k) money to a traditional or Roth IRA or to a self-directed gold IRA. Also, remember that people who open gold IRAs can choose the Roth (using after-tax income) version if they wish.

? Pro Tip: Yes, you can have two retirement accounts at the same time, a 401(k) and a gold or self-directed IRA. It's a common arrangement. In fact, many people who have employer-sponsored 401(k)'s choose to put some of their retirement money into tax-deferred IRAs or Roth IRAs. Roth contributions are made with after-tax income, and future withdrawals are tax-free.

Review the steps and the companies in the following two sections. After that, you should be ready to make a decision about how to get the entire process underway.

401k To Gold IRA: Do It Right & Without Penalties

Steps for Rolling over 401(k) to Gold IRA

  • Desire: Decide if you want to make the switch by checking out the advantages of gold IRAs, which are a type of SDIRA, the only kind of IRA that lets people hold hard assets like gold and real estate in the accounts.
  • Ability: Find out if your 401(k) funds can legally be sent to a gold IRA account. Some specific kinds of 401(k)'s don't allow account holders to pull money out and roll it over elsewhere.
  • Amount: If you have a green light from the first two steps, it's time to decide how much of your 401(k) money you wish to put into a gold IRA.
  • Method of Transfer: There are two ways to rollover the funds. One is to take a payout from the 401(k), to yourself in the form of a certified check or similar instrument. The other is to have the rollover done directly from the 401(k) to the new IRA you have chosen.

    Warning: If you choose to receive a certified check from your 401(k) administrator for any amount of funds, you MUST roll over that money into another IRS-approved retirement account within 60 days.

    Otherwise, you will incur a significant penalty based on the amount you withdrew. Usually, the penalty is 10% of the amount if you are under 60. Even if you're older than 60, you'll be on the hook for tax on the withdrawn amount as if it were ordinary income. Either way, it's imperative to do the rollover within the 60-day timeframe if you choose to receive the funds in the form of a check.

  • Choose a Destination for the Transferred Money: You can't move funds from one place to another before choosing the destination. In this case, that means deciding which gold IRA firm you want to work with. There are many, but only several with top-notch reputations, as noted below.
  • Contact the Gold IRA Agent: It's best to initially work with the person at the gold IRA firm you have selected. These professionals have the tools and experience to do the transfer in a seamless and legal way. They will contact your 401(k) manager, fill out the proper paperwork, and transfer the amount of money you have indicated to go into the new gold IRA account.
  • Make the Transfer: The crucial step is actually moving the money based on whichever of the two methods you opt for. If you have a certified check, the gold IRA company rep will instruct you on transmitting it to the new account. If you're going to do a direct transfer, account-to-account, without a check, the gold IRA rep will take care of all the details of the transfer as soon as you instruct them to get the ball rolling.

Top 3 Companies for 401k-to-Gold IRA Rollovers

There are numerous gold IRA companies, but our research uncovered the top three. The following are all excellent choices for people who want to roll over some or all of the funds in a 401(k) and move the money to a gold IRA.


Augusta specializes in helping people who are close to retirement age or past it diversify their portfolios by adding precious metals to the mix, particularly silver and gold. Not only does APM have a stellar reputation among customers and within the industry, but the company is also one of the few that offers extensive educational resources regarding fees, how to avoid investment mistakes, economic trends, gold IRAs, and more. Augusta is also at the cutting edge of IRA precious metals investing by selling metals directly to buyers, retirees, and investors.

What investors need to know about APM:

  • The company specializes in helping its clients achieve diversification goals and hedge their savings against inflationary pressures.
  • There are no high-pressure sales tactics.
  • The rollover process from a 401(k) or another IRA to a gold IRA is rapid and simple.
  • The firm is among the most transparent in the industry and closely adheres to all IRS and other regulations regarding IRA transfers and setup.
  • They offer customer service and support for the lifetime of the account.
  • Clients can earn up to a decade of fees by investing larger amounts.
  • Online verified reviews are close to perfect.
  • Their agents are happy to answer questions at any time.
  • While the minimum IRA investment amount is $50,000, APM leads the industry in the number of investors and the total amount of IRA assets under management.

#2. Goldco


Not only does Goldco, officially known as Goldco Precious Metals, offer a buyback guarantee for all the precious metals it sells, but the company is known for its attentive customer service. They also sell direct-buy metals for non-IRA investors. For clients who want to do rollovers from 401(k)'s or other kinds of retirement accounts, the Goldco service agents are knowledgeable and easy to work with. Founded in California in 2006, the company specializes in gold and silver IRA setups, rollovers, and IRA planning. They also offer cash sales to the public, for which there are no fees whatsoever.

What investors need to know about Goldco:

  • Has some of the lowest fees in the industry, ranging from $175 annually up to $225.
  • Exceptional customer service and follow-up for questions.
  • Account minimum is $25,000.
  • Customer reviews are high across the board, and the BBB rating for the company is also the highest, at A+.
  • Verified online reviews by actual customers put Goldco at or near the top of every rating scale.
  • They offer a 5% refund on opening balances of $50,000 and higher.

The California-based company is not only family-owned but sells all four precious metals, gold, silver, platinum, and palladium. AHG has carved out a niche in the market by selling gold-backed and other metal-based IRAs and servicing the accounts for all customers. The company offers a buyback guarantee for anyone who wants to convert any of their IRA metals into cash at any time.

The minimum on a new IRA or rollover account is just $10,000, among the lowest of the leading firms in the industry. AGH also assists clients who want to do rollovers from 401(k)'s and traditional IRAs into gold IRAs, and their agents are highly skilled at quickly setting up trustee-to-trustee style accounts or rollovers within the 60-day rule.

What investors need to know about American Hartford:

  • The firm specializes in helping people set up gold IRAs for the first time or as rollovers from other kinds of retirement accounts.
  • Their customer reviews are consistently top-notch.
  • Agents can get new customers set up in a matter of minutes.
  • AHG follows all IRS rules to the letter regarding account setup, rollovers, storage, custodianship, and paperwork.
  • Their main website includes an in-depth education and information section on the precious metals market and price behavior. They're one of just a few gold IRA companies that has a buyback guarantee.

Final Verdict

While rollovers from 401(k) to gold IRAs are common, account holders who have never done a total or partial transfer of funds from one kind of retirement account to another can find the task to be rather challenging as well as a bit confusing. The simple solution to the dilemma is to vet the gold IRA companies, choose one to work with, and contact one of their representatives to help you navigate the steps for making a transfer to a gold IRA.

A gold IRA specialist knows how to cover all the bases and assure customers that they will not be penalized by the IRS for making an error. Specialists take care of all the paperwork, speak with the 401(k) administrator, and get the funds moved quickly and legally. They also help new clients choose the kind of gold, silver, platinum, or palladium to put into the account, select an IRS-approved storage vault, and deliver the bullion directly to that secure location.