How Does a 401K to Gold IRA Rollover Work?

If you are interested in making an investment in precious metals, you should know that current IRS rules allow you to roll your current 401K to a precious metals IRA. In fact, you can keep physical gold, silver, or another kind of precious metal in this IRA, but you need to understand a few rules first. The rules aren’t that complex, and you can always employ the services of an experienced precious metals broker to help make sure you comply with them.


Basics Of A 401K to Gold IRA Rollover

401k to gold ira rollover

The main things you need to know include:

  • The types of gold that qualify
  • How to store gold bullion
  • Withdrawing gold from your 401k at retirement age

What Kind of Bullion Products Qualify?

Qualified bullion for a gold IRA: Even though the IRS lets you keep gold in an IRA, they are very specific about the kinds of gold you can keep and how you keep it. For instance, you need to purchase bullion products that are valuable because of their gold content and NOT their collectible value. Most US bullion coins, rounds, etc. qualify, but old coins that are valuable because they are old and rare are not qualified. Your gold IRA broker can help you find the right products to keep in your IRA.

How Must You Store Your Gold Bullion Products?

Storing IRA gold: You also cannot store your gold yourself. You need to have a custodian store your gold for you. Your broker might offer these services, or you might use the services of a third-party custodian. For a fee, you will be certain that your precious metals are stored in a safe and legal way.

How Can You Withdraw Your Gold When You Reach Retirement Age?

Withdrawing IRA gold: When you reach 59 1/2, you are free to take possession of your gold as a withdrawal from the IRA. At that point, you can store your own gold or sell it. This is not that different from making a withdrawal from any other kind of IRA. Depending upon the type of IRA and your income, you may need to pay taxes upon your withdrawal. If you make an early withdrawal, you may be subject to penalties, just like any other IRA.

Should You Roll Your 401K Into A Gold IRA?

You might consider investing in gold, silver, platinum, and other precious metals to diversify your holdings. Many people find that precious metals offer them a good hedge against inflation or other economic issues. The amount of savings that you want to invest in gold is something that only you can determine, but you might consider 10 to 20 percent as a reasonable amount. In other words, you might keep some savings in traditional investments and some in precious metals.

To get started, you might find a precious metal broker who has experience with this sort of rollover. He or she can help you with paperwork and selecting the right kinds of precious metal products. The broker may also be able to help you find a custodian to store your bullion.