Converting Your 401k to Gold

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For most people, a 401k is an essential component of their retirement savings. But in today’s economic climate and workplace uncertainty, diversifying your portfolio may be the right step to securing your financial future.

Gold and other physical precious metals make excellent investments due to their relatively stable long-term value, and their worth tends to inversely correspond to traditional paper investments — if the dollar goes up, gold prices drop; if the dollar drops, gold prices go up. This inverse correlation helps your retirement funds grow despite adverse economic circumstances.

Gold IRAs are a type of self-directed IRA that allows you to take control of your investments. You don’t even have to limit yourself to gold — you can start self-directed IRAs using various precious metals and other physical commodities.

But how exactly do you move your 401k savings into a gold or other precious metal IRA? Read on as our team at The Oxford Gold Group outlines the gold IRA rollover process while diving deep into the benefits and drawbacks of gold IRAs.


How Do You Fund a Gold IRA Account?

You can fund your gold IRA account using several different methods, including:

  • IRA Transfer: If you already have a traditional or Roth IRA, you can transfer the assets in this account to your gold IRA. The process involves liquidating your current IRA assets and using those funds to purchase actual gold bullion or other precious metals that go into your new gold IRA account.
  • Cash Contributions: The most common way of funding gold IRA accounts is with regular cash contributions, similar to those used in traditional IRAs. It’s important to note that these cash contributions have the same restrictions as any other tax-advantaged retirement account, and you may face penalties should you exceed your annual contribution limit. In 2022, the annual limit is $6,000 for individuals under 50 and $7,000 for individuals 50 or older.
  • 401k or Other Retirement Fund Rollover: If you have a 401k or other retirement funds, you can roll over all, or part, of these funds into your gold IRA. Doing so doesn’t incur any tax penalties as long as you deposit your 401k funds into the gold-backed IRA within 60 days of receiving the funds.


Risks of Investing in a Gold IRA

Risk-free investments don’t exist, and the same is true for gold investments. Understanding the risks of moving a portion of your funds from a 401k to gold is essential to making an informed decision about whether doing so is the right move for your situation and needs. Common risks of investing in physical gold coins include:
  • Volatility: While precious metals tend to be stable over the span of decades, moment-to-moment prices are just as volatile as those on the stock market or other forms of paper investments. Despite gold’s upward trend in the past 20 years, it’s always important to remember that past performance doesn’t translate to future success. Instead of investing all of your money into gold or other precious metals, consider a gold IRA as a supplement to your current investment portfolio.
  • Theft: While most IRS-approved gold depositories are incredibly secure, theft will always remain a risk. However, even if you lose your physical precious metal bars, you can expect the depository to have insurance that protects your investment.
  • Untrustworthy Custodians: Holding precious metals requires a deep understanding of how the market works and all the relevant rules and regulations. As with other investment options, you risk dealing with custodians willing to commit fraud or trade metals they don’t have and aren’t planning to buy. In addition to thoroughly researching any custodian you work with, having a custodian that insures any financial transaction can help alleviate this risk.


How To Choose the Best Gold IRA Company

Gold IRA companies assist with many aspects of managing your individual retirement account. Typically, these companies are precious metals vendors that can provide advice on the process of opening gold-backed retirement accounts, though reputable vendors will never offer investment advice, such as when to purchase gold or sell your holdings. Instead, they simplify the process while letting you control your retirement savings investments.

Major paper brokerages tend to avoid offering gold IRA services, as they require precious metals specialists. You’ll need to find the best gold IRA companies that specialize in gold and precious metals IRAs and identify which one best meets your needs. Sticking with reputable companies such as The Oxford Gold Group means avoiding the issues of working with smaller, less trustworthy precious metals companies.

Important criteria to keep in mind when looking for your gold IRA provider include:

  • Transparency: Make sure that the company you work with provides you with all of the necessary information to help you make the right decision. This information includes all the costs involved in investing in a gold IRA, such as storage and custodial fees.
  • Proven Track Record: Look at websites such as the Better Business Bureau and Business Consumer Alliance to find out what real customers think about a particular company. Avoid working with a gold IRA provider that often has complaints about aggressive sales tactics or poor customer service.
  • Flexibility: Only work with companies that offer flexible services. As every individual retirement account is different, and your needs are unique, it’s best to work with a custodian or broker willing to tailor their services to your situation and goals.


Finding the Right Gold IRA Custodian

A self-directed IRA allows the retirement account holder to control their assets inside the fund. This control means you can sell and buy gold as you see fit to maximize your retirement savings.

While you have complete control over your gold or silver IRA, you must still work with a custodian who will administer the account. The custodian is responsible for actually buying your gold and storing it in an IRS-approved facility and should meet several criteria, including:

  • Proven track record, including positive reports from other clients on third-party websites, such as the Better Business Bureau
  • Experience in gold and precious metals
  • Transparency about fees and costs
  • Correct certifications, such as being on the IRS’s approved non-bank trustees and custodians list
“My purchase was smooth and seamless, and now my investments are secure, and my mind is at ease.”


How to Convert Your 401k to a Gold IRA

The first step in converting your 401k to a gold or precious metals IRA is to find a trustworthy gold IRA provider. While it’s possible to do the process yourself, working with a reputable company ensures that you avoid potential regulatory or bureaucratic hurdles. These companies will also guide you through the process of opening your new gold-back account — from recommending a professional custodian to activating your account and transferring your existing retirement account funds. In many cases, your gold IRA company makes purchasing precious metals and gold simpler and easier than doing it yourself.

Once you’ve found your company, you’ll need to identify your custodian. Your custodian will coordinate your purchases and sales and will manage the storage of your physical gold or precious metals.

The next step is to open your gold IRA and fund it. Only once you have funds in your IRA will you be able to buy gold and manage your portfolio. Remember to stick to your annual contribution limits when funding your gold IRA via cash transfer, and remember that these limits apply to all your individual retirement accounts. These limits don’t apply to a gold IRA transfer or an IRA rollover.

Once you have funds in your precious metals IRA, you’ll have full control over which physical precious metals to buy (as long as they fit within the IRS guidelines) and sell. Your preferred precious metals vendor and the nominated custodian will handle all the technical aspects of buying, selling, and storing your bullion.


Precious Metals Approved By The IRS

The IRS allows investors to purchase four types of metal in their self-directed gold IRA: gold, silver, platinum, and palladium. Furthermore, the IRS has certain rules about the purity and origin of physical bullion that you can hold in your gold investment and stringent regulations about storing your gold and silver coins.

Precious metals must meet the following standards to qualify for a self-directed IRA holding:

  • Gold must be 99.5% pure, silver 99.9% pure, and palladium and platinum 99.95% pure.
  • All physical products, including bars and coins, must come from a certified manufacturer, refiner, or national government mint.
  • Proof coins must remain in their complete, original mint packaging and include their certificate of authenticity.
  • Small bullion bars must meet exact weight specifications with no deviation.


Browse Our IRA Eligible Precious Metals


What Is a Rollover?

If you meet the criteria outlined in the gold IRA rollover guide, it may be the right time to consider a 401k rollover. Even if you don’t qualify, you can transfer funds from existing retirement accounts to a new gold IRA, diversifying your portfolio and helping you plan for the future.

At The Oxford Gold Group, we are here to help you on your gold investing journey. For more information about moving your 401k to gold or other aspects of precious metals trading, contact us at (833) 600-4653 today!

A gold IRA rollover is a specialized form of transfer that moves your 401k funds to a gold IRA. You can only perform a rollover under certain conditions, which include:

  • Resignation from the workplace that controls your 401k account
  • Substantial changes to your company’s 401k plan
  • A change in retirement plan administration

If you qualify for a gold IRA rollover, you can choose between a direct or indirect rollover. A direct rollover transfers the money directly from the 401k trustee to the new gold IRA custodian. Indirect rollovers transfer the 401k funds from the trustee to your account, after which you have 60 days to transfer those funds into your new IRA.

The main reason to choose an indirect rollover is to take advantage of favorable market conditions. By waiting for the best time to purchase precious metals, you can get more bullion for your money, leading to a head start in your precious metal investment.

How Long Does a 401k-to-Gold IRA Rollover Take?

Depending on whether you opt for a direct or indirect transfer, a 401k-to-gold IRA rollover will take up to 60 days to complete. If you wait past the 60-day deadline for an indirect rollover, you will be subject to fines and taxes from the IRS.

The Fees Involved in a 401k-to-IRA Rollover

One advantage of transferring your 401k funds to an IRA via rollover is that you won’t pay any tax on the process. However, you can expect to pay various other fees when you open a new gold-backed IRA. These may include:

  • Seller’s fees
  • Once-off setup fee
  • Custodian fees
  • Storage fees

Common Pitfalls of a 401k-to-IRA Rollover

A 401k rollover involves following several stringent rules and procedures, and failing to comply with these will result in hefty fines. While following our gold IRA rollover guide may prevent some of them, we recommend talking to your broker or custodian about the process.

The most common mistakes made during the rollover process include:

  • Not complying with the 60-day limit for indirect rollovers.
  • Exceeding the IRA’s annual contribution limit.
  • Failing to specify whether you want a direct or indirect rollover.


The Benefits of Converting a 401k to a Gold IRA

401ks have several advantages, such as having a much higher contribution limit and having employers match their employee’s contributions. These advantages can lead to much faster growth than in other retirement vehicles, but that doesn’t mean that a 401k is the right choice for everyone.

Gold IRAs offer several advantages that may make them a better investment option than a 401k. These include:

  • Same tax benefits as a traditional IRA, allowing you to defer tax until your account distribution
  • Higher control over your investments
  • The ability to purchase physical gold and proof coins that you can keep after your account distribution
  • A variety of investment options, including mutual funds and gold stocks in addition to physical gold and silver proof coins and bars


Types of Gold IRA

The two main types of gold IRA are the traditional gold IRA and the Roth gold IRA.

As with paper-based IRAs, the traditional precious metal or gold IRA offers tax advantages on money invested into the fund before distribution. These funds have penalties on early withdrawals except under certain conditions outlined by the Taxpayer Relief Act of 2012.

The Roth gold and silver IRA works the same as the traditional Roth IRA, where you don’t get tax advantages on the contributions, but instead, you don’t incur income tax on the disbursement.

While most people use gold IRAs to hold actual physical gold and silver, you can also invest in “paper gold,” which represents the price of gold without actually purchasing the real thing. Examples of this type of investment include:

  • Mutual funds
  • Stocks in gold mining companies
  • Exchange-traded funds (ETFs)
  • Gold futures


We Will Guide You Every Step Of The Way


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