how to buy gold with 401k

How to Buy Gold with 401k – Purchase Gold with Your 401(k)

For many investors, the attraction of precious metals, especially gold, is difficult to resist. It is one of the most popular and looked-for investment products in the world. Because it can offer profitable returns in any investment portfolio. Gold is generally considered as a safe investment as well as a hedge against inflation. It is because the price of this precious metal increases when the US dollar decreases. One thing that you have to consider as an investor is that most 401(k) retirement plans do not allow for the direct ownership of physical gold or gold derivatives. For example, futures or option contracts. However, do not be worried because there are some indirect ways of how to buy gold with 401k.

Ways of How to Buy Gold with 401k

Key Takeaways

  1. Most 401(k) plans do not allow individuals to invest in physical gold such as gold bars or gold coins directly. Though there are gold IRAs that specialize in holding precious metals for retirement savings.
  2. However, investors are able to find particular mutual funds or ETFs that have gold or gold mining stocks through their 401(k)s.
  3. Rolling over a 401(k) may provide investors bigger access to more various types of gold investment.

401(k) and Gold Investment

Directly investing in the physical commodity is one of the best ways to ride the gold wave. However, there is a problem when it comes to 401(k). There are very few plans that allow investors to directly invest in gold bars. As it is said before, most 401(k) plans do not allow individuals to invest in physical gold directly. This means that you will not be able to buy gold bars or gold coins as a part of your retirement plan portfolio. But, do not be worried because there are ways that make it possible for you to do so.

For investors who want to put their money to gold, options are still available. If your 401(k) does not offer you ready access to gold and silver investment, you probably still have chances to invest in gold through or mutual funds or exchange-traded funds.

Gold Mutual Funds

If you are not able to put your money into physical gold, you are able to invest in the popular precious metal by purchasing something that is called paper gold or through mutual funds. By looking through the fund descriptions provided with your 401(k) plans, as an investor, you will be able to find one or more potential mutual funds that offer you significant exposure to gold based on the virtue of holding stocks of corporations engaged in the mining gold industry.

For instance, Fidelity Investment offers FSAGX or Fidelity Select Gold Fund. It is a value-oriented, low-cost, and actively managed fund. On May 18th, 2020, had around $1.98 billion in AUM or Assets Under Management and an expense ratio of 0.79%. The fund is especially invested in gold exploration, mining, and production corporations.

Those are the ways of how to buy gold with 401k. Besides the ways mentioned above, other alternatives are also available, such as gold ETFs.