How to Move a 401k to Gold Without Incurring Penalties


Gold has long been a commodity that holds and keeps its value unlike fiat currency such as the U.S. dollar. Throughout the troubling economy, rise in inflation, a stock market bound for a huge correction, many wonder what a safe haven for their assets might look like. Although the Gold IRA hasn’t been around for as long as traditional IRAs, they are a great hedge against both inflation and a future of unknown political climate.

A  gold IRA rollover occurs when someone turns their IRA holdings into physical metals such as gold. The gold rollover process allows people to own precious metals in their accounts that are tax-free and tax-deferred. The process can be done by transferring cash or assets from an IRA that already exists. Some people do this to protect their wealth from things they cannot avoid or control, such as inflation, currency debasement, and uncertainty. Individuals can convert stocks, bonds, and other assets into gold coins or bars and put them in a traditional IRA.

So many rules and regulations need to be followed during the process of gold IRA rollovers. A failure to adhere to these rules may result in expensive penalties from the IRS. So make sure and check out this complete 401k to gold ira rollover guide.

-The first rule of the gold IRA rollover is that the account holder must transfer their deposited funds into a new gold IRA within sixty days.

-The second rule is that the funds have a ten percent withdrawal fee if the account holder is under the age of 59 and one-half.

-The third rule is that if the 60-day rule is violated, the money becomes taxable. The IRA holder is only allowed to do one rollover per year, every 365 days.

-The last rule is that there is no tax withholding from a personal account to a different IRA.

Choosing a gold IRA is different for everyone. The decision depends on the risks people take and how close they are to retirement. People who are likely to take more risks and are closer than a decade from retiring are more likely to roll over much more of their assets (around twenty percent). There are four critical things to consider when choosing an IRA.

-The first to consider is how your decision will affect the economy.

-Then you need to consider how your portfolio has been performing, the purpose for investing, and your retirement age.

Searching for the true purpose of investing can be made accessible as most people fit into a category. Diversification orientation is used to describe people who want to invest in precious metals to protects their portfolios. They want the gold to protect themselves from losses. The investors in this category should consider using 5-10 percent of their portfolio for precious metals. Inflation and debasement orientation is the category of investors worried about inflation and debasement because gold is against inflation. Investors in this orientation should use a more significant portion of their portfolio for precious metals, around 10-20 percent. Systemic Collapse Orientation is for those who are more concerned about the economy. If it is sustainable in the future, they want to dedicate much of their portfolio to gold. Investors of this orientation should invest about 20-30 percent.

There are many different options for gold assets, such as American Eagle Gold coins, Johnson Matthey Gold bars, and Valcambi Gold Combibar. The IRS regulations conclude that any gold collectibles or rare items are prohibited. All gold bars are non-collectible. If someone wants to use gold coins, there are three exceptions. Any coins kept in a bank trustee, any coins issued in a sovereign state, and any coins described in 31 USC section 5112 are allowed. Investing in anything that is not approved can lead to severe penalties.

There are both physical and paper gold that is used when investing in a rollover. Physical gold is absolute gold. Paper gold determines gold that is in stocks and ETFs and similar investments. Unlike paper gold, real gold cannot refuse to stand with a contract, and it also cannot declare bankruptcy. If ever a time comes where cash and coins are rendered useless, gold will still hold value. Physical gold is harder to take or seize. Physical gold is much easier to take or transport yourself.

To finish a gold IRA rollover, you can transfer money from many types of retirement plans such as another IRA, your own or employer-directed 401(K), TSP, 457(b), and 403(b). Many providers will charge a storage fee averaging 100-325 dollars. Some providers charge nothing.


Jeff Campbell

Jeff Campbell is a husband, father, martial artist, budget-master, Disney-addict, musician, and recovering foodie having spent over 2 decades as a leader for Whole Foods Market. Click to learn more about me

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