How to Convert Your 401(k) to IRA Gold Rollover

If your 401(k) comes from a company where you no longer work, you are able to rollover those funds into a traditional self-directed IRA. Once the fund from your 401(k) has been deposited in the IRA, you are able to use them to purchase gold or silver. Even if you still work in the corporate that hosts your 401(k) account, it is still possible to free the funds for a gold 401k rollover into physical gold with a gold-backed IRA.

If such an option is available, it is called an ‘in-service distribution’. To make it clear, this in-service distribution is not a loan. Instead, it is an actual fund distribution that is possible to be rolled over to a self-directed IRA. There is no tax consequence if the rollover happens within 2 months or 60 days. Different plans can have different rules. So, you should ask the provider of your 401(k) whether your plan allows for such an option. If yes, they will guide you through the transfer process.

Which Kinds of Gold are Allowed by the IRS?

According to the Internal Revenue Code, you are allowed to buy gold and certain gold coins that meet applicable fineness standards. For instance, among the gold coins you are able to own in an IRA are Canadian Gold Maple Leaf coins and American Gold Eagle coins. These gold coins have to be of a fineness of 99.9 percent or better. Several famous gold coins, including South African Krugerrand are not allowed as well as gold bars that are not sufficiently pure.

How to Own Gold in An IRA

When you own gold in an IRA, the gold coins or gold bars must be held by an IRA trustee instead of the owner of the IRA. It means that you cannot ask your IRA to purchase gold coins or gold bars and save them in your safe deposit box. These tax rules also equally apply to Roth IRAs and traditional IRAs. If you already got an IRA and you want to switch your asset to gold, you can effortlessly do it. But if you take physical ownership of gold, the transaction will be considered as a distribution.

So, you will have to store your gold in a depository in order to avoid IRS taxes and penalties. The depository provides safekeeping for your gold as well as provides easy access when you eventually need to take your precious metal.

Should You Convert Your 401(k) to Gold IRA Rollover?

If you want to diversify your retirement saving or wish for a retirement option that does not mirror the volatility of the stock market or paper currency, you should consider converting your 401(k) to gold IRA rollover. Gold IRA rollover or gold investment in general is pretty appealing since its price usually moves in the opposite direction of the stock market. Quite many investors invest in gold to hedge against other investments. If your security investment poorly performs, your gold investment probably goes up and vice versa.