How to rollover a 401k plan to a gold IRA?

Rolling over a 401k plan to a gold IRA provides a convenient way to help balance out your retirement portfolio’s risk during times when its other assets are affected by the economy.

This is because the value of gold tends to increase when U.S. market prices go down, so it is considered to be a safe investment.

And it’s pretty straightforward to perform a 401k rollover to a gold IRA using the following steps:

Cease Employment With Current Employer or Request an In-Service Withdrawal

Once you have parted ways with your previous employer or you have retired, you are free to convert your 401k plan and all of your personal and employer-matched contributions to a gold IRA for increased inflation protection and greater control over the assets in your retirement account.

However, even if you are still currently employed by your employer, you may still be eligible to use some or all of the proceeds in your 401k to invest in a gold IRA via an in-service withdrawal.

In-Service Withdrawal

An in-service withdrawal is simply the process of removing funds from a qualified 401k or another employer-sponsored retirement plan while still employed by the company.

But not all employers enable their employees to perform this type of transaction. Therefore, if you are considering using your 401k to fund a gold IRA while still employed, you must first check with your company to ensure you are able to do so.

It may also be possible to execute an in-service withdrawal without tax penalty, depending on various circumstances. So be sure to consult with a tax professional to see if any IRS penalties apply to you as a result of such an action.

Choose a Gold IRA Company

>> Click here to read our list of recommended gold investing companies and discover which ones you should avoid working with. <<

A gold IRA company enables investors to set up an account for the acquisition of gold and other precious metals as part of an individual retirement account.

Gold IRA accounts are self-directed, meaning they allow account holders to own or invest in specialty assets, such as gold, which are otherwise not available via traditional IRAs. See our guide on how to convert an IRA into a gold IRA here.

However, they still enable you to contribute up to the same annual limit as traditional IRAs. The returns on the investments are also able to grow tax-free until retirement.

They are also strictly to purchase gold, silver, platinum or palladium. Hence, they are not for investors looking to simply invest in gold stocks, EFTs, mutual funds, etc.

What to Look for in a Good Gold IRA Company

Gold IRA companies differ from one company to another; however, some things to look for in a good company include:


It is important to choose a reputable/experienced Gold IRA company because this is the entity you will be trusting with the purchasing and safe keeping of your gold assets on your behalf until you retire.

Hence, be sure to research different gold IRA companies before your invest. Some things to look for include a long-standing history and high customer ratings.

You can also check the Office of Consumer Affairs and the Business Consumer Alliance to see what consumers have to say about the company.

Storage Facilities

When you get physical gold for your IRA, you don’t actually hold it yourself. Instead, it is the job of the depository you choose to ensure your assets are kept safe.

Therefore, you want to choose a gold IRA company that only works with third-party depositories that provide the utmost security, including a vault built specifically to prevent the damage of your holdings and strict barriers to entry for maximum protection.

You should also be sure the depository insures your gold while in its possession for peace of mind.

Where your gold is stored is also important because it plays a role in how easy it will be to access it in an emergency or to simply visit and check on it should you choose to.

Gold depositories are located in different locations throughout the world, including New York, Delaware, Texas, Singapore, and more, so choose a gold IRA company that offers one that suits your needs.


Gold IRA companies have different costs associated with their accounts, which may also help determine the best company for you.

For instance, one gold IRA company may charge an account set-up fee while another may not, which can help you save on costs. However, nearly all account custodians charge a management fee.

The custodian or the company itself may also charge an annual maintenance fee for the upkeep and servicing of the account.

You will also be responsible for storage fees by the depository to store your gold.

Later, when you retire, should you choose to sell your gold back to the company, you may also be charged a buyback fee.

So be sure to ask about the different costs associated with your account to help you compare company costs for the best value.

Appoint a Custodian for Your IRA Account

When you work with a gold IRA company to invest in physical gold, you will also need to appoint a custodian to manage your account for you, which is required by the IRS as part of any self-directed individual retirement account.

Quite often, gold IRA companies already have a list of custodians they work with, from which they may also recommend one to you. However, you can also choose a custodian on your own.

In either case, to choose a reputable custodian, be sure they are highly knowledgeable in their field, and, again, also check their customer comments with consumer protection companies like the Better Business Bureau, the Office of Consumer Affairs, etc.

You can also check Google My Business, Reddit, and more for a custodian’s customer ratings.

Your custodian also needs to be IRS-approved, which means they are legally eligible to manage your account. Otherwise, it could lead to tax problems and more in the future.

What an Account Custodian Does

The main job of a custodian is to get any physical assets on your behalf using your account funds, which is required by the IRS to meet the requirements of a gold IRA.

According to IRS rules, the account holder also cannot keep the physical gold in their possession. Instead, it must also be held by the custodian as part of the IRA.

Otherwise, the purchase is viewed as a distribution, in which case, the IRS will tax it accordingly. Hence, storing the gold in a depository enables you to own physical gold in your IRA without penalties and taxes.

However, when it is time for you to take physical possession of your gold, the account custodian will allow you to do with no problems.

A good custodian will also work with you to select a secure depository to safely store your gold according to IRS standards so that your account remains compliant.

They will also walk you through the entire process of setting up your account, including helping you fund it and find qualified dealers to get your gold.

Your custodian is also in charge of reporting to the IRS, so they will handle all the required paperwork and also provide you with copies.

Set Up a Gold IRA Account

Once you have narrowed down a reputable gold IRA company and custodian to work with, the next step is to contact them and set up an account.

To open an IRA account, you will need to provide personal details, such as your name, address, and social security number. You will also need your state-issued I.D. to complete the required paperwork.

Finally, to transfer funds from your existing 401k, you will also need to provide details of the existing account.

Determine Whether You Want to Perform a Direct or Indirect Rollover

There are two main ways to perform a 401k rollover to a gold IRA, which include direct or indirect rollover.

Direct Rollover

During a direct rollover, the funds in your 401k account are directly transferred to your new retirement account for the simplest way to complete the transaction and avoid IRS penalties.

Indirect Rollover

On the other hand, an indirect rollover exposes you to a higher risk of tax penalties because instead of the funds going straight to your new retirement account, they are distributed to you, after which time you are responsible for funding your new IRA account with the money.

However, you have up to 60 days from the date you receive your money to deposit it into your gold IRA account, or the transaction will be deemed a withdrawal, which means it will be subject to taxes.

If you are under the age of 59 1/2, you’re looking at at least a 10 percent penalty for early withdrawal in addition to tax on any capital gains.

Once you have set up your account and decided whether you want a direct or indirect rollover, your custodian will work with the company managing your 401k account to start the rollover.

Fund Your Gold IRA Account

If you chose a direct rollover, then you simply do nothing and wait for your custodian to complete the transfer, and your funds will automatically be added to your account.

Otherwise, if you chose an indirect rollover, then once you receive the funds, it is up to you to work with your custodian to get the funds from your 401k withdrawal into your account.

Just remember, failing to get the funds into your account within the IRS allotted 60-day time frame can result in early withdrawal penalties, which could take a huge chunk out of your retirement capital that could be going to acquiring more gold.

Get IRS-Approved Gold for Your Account

Once the funds from your 401k have been posted to your gold IRA account, you are clear to start purchasing gold.

However, the IRS only permits the gold in your IRA to be of the highest purity and fineness. Therefore, it is important to be mindful of the gold company you work with to ensure your gold is IRS-approved.

Sometimes, the gold IRA company you work with will also have their own supply of IRS-approved gold that they will allow you to acquire directly from them.

Or, your account custodian may also have a list of reputable gold and silver companies that they work with to help ensure your gold is IRS-approved.

But should you decide to choose a company on your own, just be sure their gold meets the IRS standards for fineness.

IRS Requirements for Gold

For gold bullion, the purity requirement is at least 99.5%, and the same goes for gold coins (see our list of suggested gold investment coins here). However, American Eagle coins are also IRS-approved for a gold IRA, even though they are 91.67% pure.

The manufacturer of your gold must also be a national government mint or another accredited producer.

No matter where you choose to get your gold, you still have to work with your custodian to make the acquisition on your behalf. Hence, they will most likely also double-check that it meets IRS standards before adding it to your account so that it remains compliant.

Select a Secure Depository to Store Your Gold

When you put physical gold in your retirement account, you will also need to choose a secure depository for your custodian to store them since it is against IRS regulations to store it outside of an IRS-approved vault.

This is mainly because it offers greater protection than a safe deposit box or home storage unit.

Your custodian will provide you with a list of depositories that the gold IRA company works with and then help you choose the best for your needs.

Some Things to Consider When Choosing a Depository

Some things to consider when choosing a depository include its vault security, its location, and the fees and insurance charged by the facility.

It is important that the depository you select is one that you can feel comfortable with for years to come because it will be the facility in charge of storing your gold until you retire and your custodian distributes the gold to you or sells it on your behalf.

The depository must also be approved by the IRS, which, again, your custodian will most likely ensure that it is before having your gold transported to their location to avoid your IRA account being penalized later.

How Long it Takes to Rollover a 401K to a Gold IRA Account

The entire process of opening a gold IRA account can take up to a few weeks or more, depending on the gold IRA company and your chosen method of rollover, such as indirect or direct.

However, opening the account itself takes just a few minutes to complete the required paperwork and about one business day to be approved.

Next, funding your account using a direct rollover can take from 2 to 4 weeks to complete. But an indirect rollover will depend on when you deposit the funds and how you deposit the funds.

For instance, quite naturally, sending the funds via snail mail will take a while longer to show up in your account.

Soon After, Your Physical Gold Will be Shipped to the Depository

Once your IRA is funded, your custodian will notify the depository and then ship your physical gold into an account.

You may also be able to track your gold’s performance via an online dashboard, depending on the gold IRA company and your chosen account custodian.

So if you would like to monitor your account, then be sure to inquire about this service.

When You Can Withdraw From Your Gold IRA Account

You can withdraw your gold from your account anytime you want. However, if you have not yet reached age 59 1/2 prior to doing so, it will result in early withdrawal penalties unless certain circumstances apply, such as you have become disabled.

However, once you turn age 70 1/2 to 72, you’ll be required by the IRS to withdraw a minimum amount from your IRA each year, which will be based on your age as well as various other factors. Failure to do so could also result in penalties.

A gold IRA distribution or withdrawal can be done by having the physical gold in your account turned over to you, or you can have your account custodian sell the precious metals back to the gold IRA company or another dealer and then present you with the funds.

Final thoughts on rolling over a 401k plan into physical gold

When done correctly, a gold IRA can provide the diversity needed to help balance your retirement savings for more confidence when you retire.

However, the key is to work with a reputable, IRS-approved custodian and gold IRA company whom you can trust to properly manage your account and safely oversee your gold investments and storage, which hopefully this guide on how to rollover a 401k plan to a gold IRA has more than equipped you to do.

A good custodian will also gladly walk you through the entire process of setting up your account and finding the right companies and depositories to work with to avoid IRS penalties. Therefore, you should also remember this when choosing a custodian for peace of mind.