How To Buy Gold With a 401(k) Rollover

Many investors are interested in diversifying their retirement portfolio. One method is to invest in precious metals such as gold. This can actually be done with their 401(k) retirement account.

Most people think 401(k)s are only for traditional investments like stocks, bonds, and mutual funds. But it’s also possible to invest in alternative assets through a process called a gold IRA rollover.

If you haven’t heard of the idea of rolling over your retirement account or are not sure how to invest in gold with your 401(k), here's a guide that can help you understand how to get started.

gold bars and gold coins

Many retirement funds can include gold bars and gold coins.

What Is a 401(k)?

First, let’s start with the basics. A 401(k) is a retirement account that’s sponsored by U.S. companies. It allows American employees to allocate a portion of the bi-weekly paycheck to an account that’s devoted to retirement savings. This account is tax advantaged for the individual. This means employee contributions are money that comes out of their paycheck before income taxes are deducted. Taxes don’t need to be paid until money is withdrawn from the account.

In some cases, employers may match some or all of the employee’s contribution. Within the 401(k), there are a variety of investment options that can be chosen including stocks, bonds, or mutual funds. These investments are chosen according to several factors personal to each individual investor. The factors can include risk tolerance or timeline of when you want to retire, among others.

Investing Gold in Your 401(k)

As mentioned above, there are different asset types that can be held within a 401(k). Some plans allow investors to buy precious metals in the retirement account. However, not all 401(k) plans allow direct investment into actual physical gold like gold bullion or gold coins. Physical gold is the most authentic way to achieve gold ownership.

1998 one ounce american gold eagle

American Gold Eagle coins are eligible for a self-directed IRA rollover.

But this shouldn’t deter investors from investing in gold in their nest egg altogether. There are other options that allow you to gain exposure to gold in your 401(k) through other investment vehicles.

A popular option is to invest in gold derivatives such as gold mutual funds or gold exchange-traded funds. This involves finding a fund through your brokerage firm. The fund holds individual stocks of companies involved in gold exploration, mining, or production.

Investing in a Gold IRA

A gold IRA (individual retirement account) is classified as a self-directed retirement account. This is a type of long-term retirement vehicle that allows investors to have more control and flexibility in the type of assets held within the account compared to traditional IRAs. Gold IRAs are considered alternative investments.

For example, in a self-directed IRA, you can invest in a wide variety of assets outside of the traditional stock market and bond funds. These include real estate, private equity, and physical assets such as precious metals. This means you have the chance to invest in physical gold, like gold bars and coins, in addition to gold-related assets like gold stocks, ETFs, and mutual funds. As a result, you have another way to personalize your long-term investing strategy.

To use a self-directed IRA, you must work with a custodian or trustee who holds and administers the account on your behalf. If you decide to open a gold IRA and buy physical gold, you need to work with a custodian, who buys the gold on your behalf. You will be working closely with your custodian so it’s important to do research on which company best suits your investment goals.

In addition to buying investments, the custodian will perform administrative duties. For instance, they will make sure your gold IRA is IRS-compliant. The gold IRA company will also manage the delivery and work with the approved depository where the gold will be held in storage.

empty vault

According to IRS rules, any precious metals held in a qualified retirement plan must be held in vault storage.

Rolling Over from 401(k) to Gold IRA

After you open an account with a custodian and find a gold IRA company to work with, the next step is to fund the account. This can be done through a process called a rollover.

A "gold rollover" allows investors to transfer funds from an employer-sponsored retirement account like a 401(k) to an IRA. Gold IRA rollovers are for investors who are seeking diversification in gold. Gold has historically provided protection against high inflation, recessions, and geopolitical issues. All of these factors are present in today’s environment.

A rollover involves moving funds from one eligible retirement account to a different type of account. By contrast, a transfer involves moving funds from one account to another of the same type.

For example, you can move over funds to a new gold IRA account from an existing IRA. This would be a transfer because both accounts are of the same type.

When choosing which gold investments to include in your gold IRA, make sure to review IRS guidelines. The IRS permits specific kinds of gold to be held in the account. It depends on certain characteristics, including where the precious metals are to be stored.

Silver Eagle   Silver Bar (1) (1)

Gold IRAs can also include silver coins, platinum coins, and palladium bullion.

In a gold IRA rollover, investors don’t have to be concerned about tax implications. The event is only a matter of moving assets, not making a sale of assets. In other words, a rollover is not a taxable distribution in either a Traditional or Roth IRA.

Similar to a traditional IRA account, the gains in a gold IRA are tax-deferred. After the age of 59 1/2 is when account holders will have to pay taxes on any withdrawals. At that time, you can convert gold for cash or hold onto your physical metals with no early withdrawal penalties.


Buying alternative assets like gold with a 401(k) can be a smart investment strategy. It helps with diversifying your retirement portfolio and protecting against inflation risks, market volatility, economic uncertainties, and instability in the financial system.

For more control and flexibility, a self-directed gold IRA can also be a great option for investing in gold into retirement. In any gold purchase from a gold dealer, investors should consider factors like:

These factors can influence fees which can add up and eat into potential returns.

It’s important to understand IRS requirements on gold investments in different retirement accounts. This will allow you to make informed decisions when purchasing long-term gold investments. Buying gold with a 401(k) or gold IRA can be a suitable option for protecting your retirement savings. It's also a good step toward achieving long-term financial goals.

Written by Paulina Likos

Read more about gold & silver precious metal investments:

Get Started With a Precious Metals IRA

How to Invest in Gold and Silver IRAs: IRA FAQs

How to Invest in Gold Stocks: Gold Mining Companies

How to Invest in Gold ETFs

Best Place to Buy Physical Silver: Find a Trusted Precious Metals Dealer

Investing in Gold and Silver Coins: Guide for Investors and Hobby Collectors

What Does the Silver Supply Deficit Mean for the Precious Metals Market?

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