HomeGoldReasons To Rollover Your 401k Account to a Gold IRA

Reasons To Rollover Your 401k Account to a Gold IRA

The stock market is volatile.

That is no secret, and investors are continually looking for ways to hedge the risk that comes with investing in the stock market. The traditional way to mitigate risk was to invest a certain portion of a portfolio (say 60%) into stocks, and a certain portion into bonds (40%).

Bonds are less volatile, but many investors haven’t gotten the gains they’ve wanted out of them. They are looking for other investments that have better returns but aren’t tied to the ups and downs in the stock market. That’s why many investors have turned to real estate.

But there is another type of investment, and it’s been around for a very long time: Gold. But if you go to your 401k and try to invest in gold, you won’t be able to. Even a traditional or Roth IRA may not have the option.

Why Gold?

Gold is a precious metal, purchased in the form of bars or coins. For investment purposes, the IRS has created purity standards that the bars and coins must meet. Jewelry is not allowed. Investing in a Precious Metals IRA is beneficial as they offer a wide range of gold, silver bullion, and certified coins at low prices and also offer special pricing for large volume buyers.

Gold is valuable because we say it is. In that regard, some have compared it to Bitcoin and other cryptocurrencies. There is a correlation, as both are just storehouses for value.

But there is one major difference. Gold is a tangible, physical asset that can be stored in your safe, not in your computer.

401k Basics

401ks are one of the most important options we have for saving for retirement. Many times, it’s the only option. We’re able to take a part of our paycheck, before taxes, and stash it away in a retirement fund. If we’re lucky, our employer will match some or all of our contributions.

These funds are earmarked solely for retirement, and there are hefty penalties for taking them out early. But the idea is, that our contributions get the opportunity to grow over the years before retirement. Then we’ll have a substantial nest egg waiting for us.

But many people have left jobs and still have money sitting in those 401k funds. That can be fine, it’s still your money. But there are many good reasons to roll over your 401k.

Rolling it Over

We can roll over our 401k accounts to either a traditional or Roth IRA. The reasons to do this are:

  • More Investment Options
  • Makes it easier to track your money
  • May reduce fees from old 401k funds

I’ve rolled over a few of my old 401k accounts over the past few years and the process was simple. I created an IRA account (many banks and online institutions will allow you to do this) to receive the rollover.

In one case, the 401k administrator closed my account and sent a check to me. It was then my responsibility to mail the check to my IRA provider, so they could deposit it in my rollover IRA. This is called an indirect rollover.

Another time, the 401k administrator sent the check directly to my IRA provider. This is called a direct rollover. This method is preferable because it eliminates the possibility that you lose or forget to mail the rollover check.

I have done both methods and did not have an issue either way. If you have concerns, consult a financial advisor for help.

Self-Directed Gold IRA

Once your 401k funds have been rolled over to your traditional or Roth IRA, you’re ready to start investing. But if you’re looking to invest in gold, you may have a problem. That’s because to invest in precious metals you will need a self-directed IRA. This allows you to invest in alternative investments. Make sure you’ve specified a self-directed IRA when you set up your account.

Once you have your funds in a self-directed IRA, you’re ready to buy your gold. But there are a few things to keep in mind.

  • Buy from a reputable dealer. There are many scammers out there who want to take your money, but will not send your gold. Check with your IRA provider to make sure the gold broker is legitimate.
  • Your gold will not be shipped to you. Your gold is meant for retirement, so the bars or coins will not be sent to you until you reach retirement age. At that point, you can choose to either sell your gold or have it shipped to you.
  • A custodian will keep your gold safe. You’ll also need someone to watch over the gold. A custodian does this for you.
  • Still taxable by the IRS. Just like any IRA distribution, you’ll be taxed on the gold, or the sale of the gold, when you receive it.

Should I roll over to a 401k Gold IRA?

We’ve already discussed why gold can be a great investment. But are there risks?

There are risks with every investment, and gold is no different. Gold valuation may not be tied to stock market fluctuations, but it does fluctuate based on investor demand. There is also some risk in having a physical asset that can be stolen or lost. But if you’ve done your research and set up your IRA with a quality broker and custodian, you can mitigate that risk.

Depending on your plan, there can also be fees for opening Gold IRAs and storage fees from your custodian. It’s important to be aware of any hidden costs when you purchase your gold. But in most cases, the increasing value of your gold will more than offset any costs there may be to obtain it.


Gold is a wonderful way to diversify your portfolio. Just be sure to do your research and work with a quality IRA, a reputable broker, and a good custodian.

This will ensure that your 401k Gold IRA will bring you stellar returns when you’re ready to retire.

Have a 401k you’re ready to roll over into a Gold IRA? Contact us now to get started.

Ajeet Sharma, the founder of Financegab and a well-known name in the field of financial blogging. Blogging since 2017, he has the expertise and excellent knowledge about personal finance. Financegab is all about personal finance which aims to create awareness among people about personal finance and help them to make smart, well-informed financial decisions.


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