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How to Move your 401k to Gold Without a Penalty

Affiliate Disclosure: The owners of this website may be paid to recommend the following companies: Goldco, Augusta Precious Metals, Noble Gold Investments, Birch Gold, and Regal Assets. The content on this website, including any positive reviews of the mentioned companies, and other reviews, may not be neutral or independent.

Home » How to Move your 401k to Gold Without a Penalty

You’ve always been curious about investing in gold, but were put off by how you had to leave your 401k where it was and pay hefty fees to move the money around. But now, thanks to the ability to move your 401k to gold without a penalty, you can freely invest in this precious metal without worrying about losing any of your retirement funds. Here’s how it works!

The Truth About the Inflation Rate in the USA

Here’s what you need to know about moving 401k to gold without penalty

There are big changes coming for retirement savings with the implementation of the new GOP tax plan. If you are one of the people wondering how these changes will affect your retirement planning, there is good news: you can now move your 401k account to gold without incurring penalties. However, this does not mean that it’s wise or prudent for every investor.

In order to get started, you’ll need at least $1,000 in your retirement savings account. If you have more than that lying around, feel free to do a full transfer. If not, it may be prudent to hold off until your balances increase so you’re closer to having access to your entire account value before transferring it out. Another factor that might impact how much money you want in gold versus cash is how old you are and whether or not you expect rates will rise significantly over time. After all, if rates were higher when interest on your account was last assessed—and assuming they continue rising—then there’s good reason for leaving your savings untouched until then.

It’s also important to remember that you don’t have to make any changes at all. This is an optional move and one that might not even be wise for your particular financial situation. If you do decide it’s right for you, however, here are some guidelines that can help when deciding on how much of your money should go into gold: Decide what percentage of your assets should be in gold: The new GOP tax plan makes it legal for investors to hold up to 25% of their assets in precious metals. However, many financial experts believe that figure is too high and instead advocate holding 5-10% of your assets in physical precious metals such as gold.

Move 401k to gold without penalty

move 401k to gold

Here’s why you need to do it

If you have your savings in cash, stocks, or bonds, chances are you are missing out on the great opportunities available in the gold market. The price of gold has increased 700% over the last 12 years as compared to 400% for both stocks and bonds combined. Gold is also scarce and its price generally moves opposite to that of other assets such as stocks and bonds, thereby protecting your investment portfolio during times of high volatility. So if you want the best opportunity for growth without taking on excessive risk for losses, then convert your retirement account now before it’s too late!

One of the best and safest ways to invest in gold is by investing through your retirement account. Retirement accounts allow you to invest money that won’t be taxed until you withdraw them, giving you up to 30 years for compounding interest and adding value before it’s taken out. The majority of people with retirement accounts have 401(k)s, 403(b)s, 457 plans, as well as individual retirement accounts (IRAs). If you’re one of these investors who wants safe yet profitable investments in gold and silver then learn how easy it is by reading on… 

How much can I put into my retirement account?

The IRS limits retirement account contributions annually, based on your income. But as long as you don’t exceed those limits, you can invest any amount of money into your retirement account. For an IRA, you’re allowed to contribute up to $5,500 per year if you’re under 50 and $6,500 if you’re over 50. For a Roth IRA, that number is $5,500 for everyone regardless of age.

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Here’s how you can move your 401k to gold without penalty today

A few years back, if you wanted to take your money out of the stock market, you could only do so on a penalty. But as of January 1st, 2014, that is no longer the case. If you want to transfer your funds out of stocks and bonds and into precious metals or real estate with the help of a self-directed IRA account, it’s now legal. 

In order for this move to go smoothly without incurring any penalties from the IRS (due April 15th), here are some things you need in place: 

  1. An Individual Retirement Account – You’re not allowed access your funds until 59 1⁄2 years old, so all plans must be funded in some form by then.
  2. A Self-Directed Individual Retirement Account – Traditional and Roth IRAs, SEP IRAs, as well as Simple IRAs allow for investments beyond stocks and bonds. Because of your income status, you’re not allowed direct access to your retirement funds until 59 1⁄2 years old. As such, traditional IRA accounts make sense if you plan on keeping them invested in stocks and bonds until that time. But if you’re looking to invest in gold or silver in your IRA instead, a self-directed account is required.
  3. A Self-Directed IRA LLC – To move your retirement funds into gold, you need an LLC structure. The IRS no longer requires you be an arm’s length party from your investment (that is, it’s not limited to arm’s length transactions), so it can legally go through your IRA account. A self-directed IRA company will help you set up such an account and establish its management. An experienced team will also handle tax preparation and reporting duties, if applicable, on behalf of your account.
  4. A Legal Transfer of Funds – To start, your self-directed IRA company will walk you through transferring your funds into an existing IRA account. This is done by first rolling over whatever stocks and bonds you currently have into new IRA accounts held at either Schwab or TD Ameritrade. Once they’re in place, you can then take your money out from those traditional brokerage accounts and put it directly into precious metals (such as gold, silver or platinum coins), real estate, tax liens or other alternative investments. The entire process should only take about ten days total to complete.
  5. A Plan for Distribution – For any withdrawal from your IRA, you’ll need to get IRS approval on two fronts: First, you’ll need to determine what type of distribution you qualify for based on how long it’s been since your original contribution. Second, you’ll then have to decide what kind of distribution method works best for your situation. 

Top Gold IRA Companies 

Our recommended Providers are researched and vetted by us and many top consumer organizations. This is the short list of the most consistent companies we could come up with. Request information from them below.

#1: Augusta Precious Metals

Our Rating: 10/10

gold ira rollover

Pros

✅ ZERO complaints with the BBB and BCA

✅ Highest reputation and customer satisfaction in the industry

✅ Non-commissioned sales team

✅ Transparent pricing with up to 10 years of fees waved – with certain minimum investments

✅ NFL Legend Joe Montana actual customer before becoming their spokesperson

Cons

❌ No way to setup online

❌ The minimum investment for IRA is $50,000


#2: Goldco

Our Rating: 9.9/10


#3: Birch Gold Group

Our Rating: 9.9/10

Pros

✅ Great company commitment to education and communication

✅ Impeccable customer service

✅ Silver, gold, platinum and palladium available

Cons

❌ Signup process can only be done thought a specific link

❌ Certain fees are not disclosed up front

❌ No buyback guarantee of precious metals


#4: Noble Gold Investments

Our Rating: 9.6/10

Pros

✅ One of the best no questions asked buyback programs in the industry

✅ Free delivery of your precious metals to your door at any time

✅ Over 20 years of experience in the precious metals industry

✅ Gold, silver, platinum, and palladium available

✅ One of the lowest barriers to entry – ideal for smaller investors

Cons

❌ High annual fees for low balances


Move 401k to gold without penalty: here are some options

  1. The Required Minimum Distribution Method – If you want your distribution in physical form, you’ll need to take it in gold or silver bars. You’ll need an IRS-approved trustee for any precious metals. For real estate and other alternative investments, can be sold and turned into cash right away. Otherwise, if your total withdrawal is less than $10,000 ($5,000 if married filing separately), distributions will be made directly to you (though they will come from a custodian instead of straight from your IRA).
  2. The 5-Year Method – This method gives you more flexibility but comes with an added cost: Withdrawals are taxed as ordinary income. You must use it, however, if your distributions have been less than $200 each year for any of the last five years. Otherwise, you’ll need to file Form 5329 with your annual tax return and pay ordinary income taxes (as well as a 10% penalty) on any distributions in excess of your required minimum distribution for that year.
  3. Roth IRA Distributions – You can withdraw your IRA funds before age 591⁄2 penalty-free and tax-free if you take what’s known as a qualified distribution. Generally, any distribution taken after reaching age 591⁄2 is considered a qualified distribution. These distributions are not subject to income taxes or early withdrawal penalties (though they may be subject to regular income tax depending on how long you’ve had your account). That means if you’re over that threshold and need money from your IRA, it can help maximize your savings. For more information on which distributions qualify for penalty-free treatment, check out IRS Publication 590 at www.irs.gov .
  4. Roth IRA Recharacterization – Recharacterizing a distribution is not something most people need to worry about, but it’s something you may want to consider if you qualify. It can be used when your original contribution was made as part of an employer-sponsored plan, such as a 401(k), 403(b) or 457(b). If so, you have some leeway on how you get those funds out. You can roll over any distributions that don’t meet requirements into another Roth IRA (if one exists), use them to make annual contributions or recharacterize them.

Here’s what you should expect in the future

Companies like Augusta Precious Metals and Goldco have created gold-backed retirement accounts that allow you to convert your traditional 401k into physical gold while avoiding the hefty 10% early withdrawal penalty. How does it work? You first need to have at least $5,000 in cash available in order for them to move your money over. Once this is complete, you will be contacted about which coins you would like your gold backed by. Some coins that you might want are the American Eagles and the Canadian Maple Leaf because these coins have often been more stable than other gold coins in uncertain economic times.

Once you are contacted about which coins you would like your gold backed by, they will provide you with prices. Once you have confirmed what coins you want, they will send over an invoice and once it is paid, they will then purchase these coins in your name. This can be done through a wire transfer or in person at one of their locations. They also accept credit cards for those who wish to use them.

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Can I roll my 401k into gold without penalty?

If you are considering rolling your traditional 401k retirement account into gold, the new rules will not affect you. On January 1, 2016 the Department of Labor expanded the availability of the Roth Retirement Account. The new rules will permit converting a 401(k) plan account (traditional or Roth) into a self-directed IRA and rolling it over into precious metals, stocks, or other assets that are not otherwise prohibited by law. This can help investors who have watched their retirement accounts lose money over the past few years in bear markets as well as retirees who don’t want all their retirement savings tied up in stocks with potential for even more losses.how to buy gold for investing

Can I transfer my 401k into gold?

This question is simple, but not easy. Most likely you are thinking, Wait I’m too young to retire, but I want the stability of gold. You are not alone in this idea. Other people like you want the peace of mind that comes with owning precious metals as an investment strategy and plan for retirement. So what do you need to know? 

First, make sure your 401k has been open for at least five years before transferring it into gold or other precious metals. Second, before transferring your money over, decide how much money you would like to invest into this new asset class- usually 10% of your total portfolio would be a good start. Third, once your account has been converted into precious metal assets contact the company where the funds were transferred from and request paperwork on their behalf. Make sure they have no plans to transfer back any remaining balances from your account because if they do there may be penalties assessed on top of fees incurred by converting assets again. Finally, don’t forget about taxes!

How do I transfer my 401k to gold IRA?

It’s now possible to move your traditional 401k into an IRA, most commonly a gold IRA. This is because more and more people are opting for alternative assets like gold. The transfer from your old plan to the new one doesn’t have any penalties associated with it, making it worth considering for those who are already interested in investing in gold and don’t want the restrictions of a regular IRA.
1) Decide what you want 
2) Investigate different options 
3) Select one and go for it!investing in a gold IRA

Can I roll my 401k into gold and silver?

The answer is YES! We are happy to announce that as of today, your company’s defined contribution plan (such as a 401k or 403b) can now be rolled over into gold and silver. This means that you can take what would have been allocated towards your employer-matched contributions, such as profit sharing or the employee stock purchase plan, and convert it into gold. That translates into owning an investment with low volatility and strong long-term growth prospects—in fact, according to the Consumer Price Index for all commodities including precious metals from 1980 through 2018 gold has returned an average annual rate of 7%.

Can you roll an IRA over into gold?

Gold has become one of the most stable assets over the past decade, but with low interest rates across the globe, and many financial advisors telling you that it is time to switch your cash into gold, it might not be so simple. If you want to change your current IRA account into an IRA that invests in gold then you need to be aware of two things. The first is that if your current IRA investments are in traditional assets like stocks and bonds, then when you rollover the funds into an account with gold they will no longer be tax-deferred investments. You will pay taxes on all gains incurred until the time of conversion.convert 401k to physical gold