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How To Move 401k To Gold Without Penalty

John Anderson | June 25, 2021

Best Gold IRA Companies 2021


◎ GoldCo 


◎ Augusta Precious Metals


Birch Gold Group


◎ Regal Assets

Disclosure: The content shown on this website does not constitute financial advice and should not be taken as such. Always do your own research before making any investment decisions. The owners of this website may be compensated by companies they review and recommend. We monitor these companies regularly and will always update the reviews and recommendations if any of their high standards drop.

Investment Performance

In a recent survey of investors, it was reported that more than half of the respondents said that investment performance affects their mood.



Are you looking for a way to shield your investments from runaway government spending and a volatile stock market? If so, have you considered investing in precious metals? You will find companies here that we recommend who will show you how to move 401k to gold without penalty.

Unlike stocks, bonds, and mutual funds that are all tied to the dollar, precious metals stand on their own. When the stock market tanks, the price of gold and silver isn’t affected. In fact, it often rises during these times.


Precious Metals Are A Foundational Part Of A Retirement Portfolio 

Precious metals are treated as a foundational part of a retirement portfolio. It's a wise decision to have a small percentage of your net worth in gold and silver. These are some examples of well-known businessmen who have shared their gold allocation strategies.

Augusta Precious Metals Review

Pros:

☑ Offers many IRS-approved storage options for Gold and Silver IRAs

☑ Lifetime customer support

☑ Customers have an assigned, personal agent.

Cons:

☑ Online orders are not available

Read more...

Birch Gold Group Review

Pros:

☑ Offers gold, silver and other precious metals 

☑ Ability to start a gold IRA or transfer an existing IRA to a self-directed precious metals account 

☑ Work with a precious metals IRA specialist


Cons:

☑ If you're outside of the USA, there is no overseas depository available

Read more...

Regal Assets Review

Pros:

☑ You are provided a separate storage facility to hold your precious metals in different compartments

☑ High customer satisfaction rating.

☑ Flat rate on fees regardless of the account's value

Cons:

☑ The lowest investment package starts at $5,000

Read more...

How We Choose the Top Gold Investment Companies

Informative

Gold IRAs can be difficult to understand, especially when you haven’t been exposed to this type of investing. The companies we recommend have a high degree of quality information to understand their company and products and they all have the resources to help you understand this type of investment. Moreover, they help you understand how to move 401k to gold without penalty.

Reputation

We looked for companies that have a history of great customer service and a solid reputation in their area. In an industry that is prone to scams, we found it important to remove any businesses from our list that had a sketchy past or that had received negative reviews from reputable institutions. 

Marketing Approach

A number of companies that sell gold and silver or other precious metals make controversial claims about an assurance of profits or will inform their potential clients about impending financial disasters or economic collapse. Such companies try to tempt or frighten seniors into investing quickly without explaining the options they have with gold IRA investing and if that is the better approach for their specific situation . We only included the organizations that demonstrated a pattern of great customer service.

Custodians and Their Duties

Custodians are the ones the IRS states must handle all IRAs. Banks and other financial institutions can be considered for custodial duties. Trust companies can also act as custodians.

According to the IRS, these companies:


► Must keep records

► Report to the IRS according to IRS codes

► Send reports to the client

► Release funds for investment purchases as directed by the client

► Make required minimum disbursements

► Handle compliance concerns for the client

Other work that the custodian can perform:

► Provide educational materials on IRAs and investments

► Provide a secure online platform for account management

► Provide recommendations that you deal with particular metals dealers, security companies, and storage facilities

 

Typical Custodial Fees

​► Startup: The fee charged to open the account. It may also be called the application fee, set-up fee, or something similar. It should only be charged once.


​► Annual: The amount you pay each year for the administration and maintenance of the account. This is the custodian’s compensation for keeping records, reporting to you and to the IRS, and more. Sometimes the fee will be charged quarterly instead of annually. It can be a flat fee or it can be a percentage of the asset’s value.


​►Brokerage: A percentage of what you pay for a metal that is profit for the one who sold it to you and/or the one who recommended the metal company to you. Only some trust companies benefit in this way from the metals purchases; many keep themselves separate from the sales process.


​►Shipping and storage: The cost of securely shipping and storing the metal in an IRS-approved, secure facility. These companies are usually separate from the trust company, but they are often paid through fees gathered by the custodian. These fees may be included in the annual fee. 


​►Transaction/services: Each company chooses which transactions and services are covered by the annual fee and which merit a separate charge. The following often come with a transaction fee: outgoing wire transfers, checks, cashiers checks, transfer out and closing fees, stop payment fees, IRS reporting corrections, and more. 

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GoldCo Investments

Company recognized as GOLD STEVIE® AWARD WINNER on April 29, 2021

In excess of 250 professionals from around the globe took part in the judging process to select this year’s Stevie Award winners. Some of their comments about Goldco’s achievements over the last year included recognition for the company being “an excellent firm which offers customers exemplary service for those who are interested in diversifying their retirement portfolios.” They concluded that “investing for retirement can be complex and uncertain, but it doesn’t have to be with Goldco.”

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Birch Gold Group

Best company in empowering clients

When you contact the company, you will be given an investment specialist  to work with who will go over the stock market and how it can impact gold prices, precious metals and your IRA. They empower you to make educated decisions about your retirement objectives and to assist you to completely understand what is possible and the associated risks with any investment.

Things To Consider Before Investing In A Gold IRA Or Other Precious Metals

There are a number of details involved with holding a gold IRA.


The Internal Revenue Service (IRS) has listed the rules they have laid out regarding retirement investments that must be followed.


Gold IRA Investment Choices


The most important factor for meeting IRS regulations is that the gold must meet to a purity grade of 0.995 or higher. Anything less cannot be considered for a gold IRA investment. The current list may have changed, but they include the following gold coins and bars:


Gold Coins & Bars That Are IRS-Approved


American Eagle Gold Coin

American Buffalo Gold Coin

Australian Kangaroo Gold Coin

Australian Lunar Series Gold Coin

Austrian Philharmonic Gold Coin

British Britannia Gold Coin

Canadian Maple Leaf Gold Coin

Chinese Panda Gold Coin

Credit Suisse Gold Bar

Johnson Matthey Gold Bar

Valcambi Gold CombiBar


IRA Rules & Regulations For Gold


As with any investment, the IRS has guidelines of how IRAs, including gold IRAs, are started and managed. This is an overview of some key aspects for gold IRAs.

Administration Regulations


You must use an administrator who works with precious metals and is also approved by the IRS to open a gold IRA. Even though you direct it personally, administrators (brokers, custodians, etc.) are still necessary to act on your behalf.


Storage Facilities


Gold and other precious metals that make up an IRA require storage in vault facilities approved by the IRS. Because of the potential for IRA fraud or theft, the IRS determined that only certain approved depository facilities would be allowed to inventory and guard such large amounts of physical bullion treasure. So it was that only six depository vaults in the entire United States of America were approved to hold the valuable contents of these extremely resource-rich retirement accounts.

These six IRS-sanctioned vaults are responsible for nearly all of the gold, silver, platinum, and palladium contained in the precious metals retirement accounts around the country. Yet in just the last year, the IRS has amended this rule to allow for Gold IRA physical offshore storage in approved international vaults and countries. In this page, we look at the various options for your gold IRA storage.

Where The IRA Precious Metals are Usually Physically Held

IRA precious metals are still usually held in one of six IRS approved depository company vaults. These companies include the following well-known and imminently trusted institutions:

◎ Delaware Depository

◎ Brinks Security

◎ HSBC Bank USA

◎ JPMorgan Chase Bank North America

◎ Scotia Mocatta

◎ CNT Depository



Tax Regulations

Actual possession of the gold on your part is deemed a distribution by IRS, which means they are subject to taxes or penalties.

Distributions - taActual possession of the gold on your part is deemed a distribution by IRS, which means they are subject to taxes or penalties.king physical possession of the gold - are subject to income tax at the point of withdrawal.Early distributions see a levy of 10% unless it falls under a predetermined exclusion (see below). Profits can see further assessments via capital gains tax.


Contribution Limits


Gold IRA contribution limits are $6,000 per year, increasing to $7,000 annually once you turn 50 years of age.It can be funded via rollover or with a purchase made through your administrator.


Age Limits


Access to your gold IRA are restricted to age 59½, although you are under no requirement to start taking distributions at that age. You will, however, have to take distributions beginning at age 70.


Early Withdrawal Limitations


We use the word limitations because while there is a 10% penalty for early withdrawal, there are a number of exceptions to the rule, including:

◎ IRA owner becomes disabled or is hospitalized without means to pay the medical bill.

◎ IRA owner dies, and their beneficiary requires access to the funds.

◎ IRA owner loses employment and needs access to funds.

◎ IRA owner wants to purchase a new, first time home (can use up to $10,000) or fund a family members education.


Types of Precious Metals


As we identified earlier there is a limit to the precious metals included in your self-directed IRA.

The IRS stipulates a minimum purity requirement for gold of 0.995 or 24 carats, which you can find in a limited number of products.

As we noted earlier, gold IRAs are self-directed, meaning the individual investor has more direct control over the account and can include a broader range of investments in the account than a traditional IRA.

However, when dealing with gold, you will require the services of a broker to purchase the gold and/or a custodian to serve as the account administrator.

This is one area where investing with metals can get tricky. Custodians are federal or state-approved agencies such as banks, brokerage firms, credit unions, savings and loans, or trust companies that serve as asset-custody providers.

In other words, these services facilitate safekeeping of the securities and management of the account for the individual investor. They do not, however, directly sell the gold to the clients.

The acquisition, or the identification of the dealer, falls to the actual investor. Due to the nature of the gold market, though, many custodians are likely to have recommendations for preferred dealers or vice versa.

The choice for both though remains with the investor. Unfortunately, when dealing in gold, not everything is black and white. Precious metal investing is highly specialized, and scams are prevalent.

To ensure you make a sound investment, you'll need to conduct plenty of research as to which firms will best fit your needs.

In regards to finding the right companies to deal with, look for transparency - both in how they conduct themselves and the fees involved in their stewardship or the acquisition of the gold.

You want your investment to make money, not lose it.

Reputation in the gold market is equally as important.

Review third party ratings and consumer reviews to find the ones that add up to a good overall experience.

Frequently Asked Questions

Do I need a custodian to administer the precious metals in my IRA?

Yes. The IRS requires that a custodian administer and track all of the assets in an IRA – that includes a Precious Metals IRA.

How long does it take to roll over a traditional IRA into a Gold IRA?

It takes on average about two weeks. The application process is different for each person and the exact amount of time it takes can vary.

Can I put the gold I already have into a Gold IRA?

No. Collectible items are not allowed to be put into an IRA. Only certain U.S. gold coins (one, one-half, one-quarter, or one-tenth ounce, or one-ounce silver coins minted by the Treasury Department). There are some platinum, gold, silver, palladium, and platinum bullion coins that are allowed as well. The IRS has a document of what can be included in a precious metals IRA as an investment.  

Are there any fees or penalties for transferring my IRA or 401(k) to a Gold IRA?

No. An IRA rollover is a common, tax-free process with no fees or penalties. You can rollover your current IRA to a new IRA whenever you want, as many times as you like. The only stipulation is that the funds need to be deposited into your new IRA account within 60 days. 

What other types of accounts qualify for rollover to a Gold IRA?

The most common types of retirement accounts are a 401(k) and a 403(b). These types of accounts are for public employees and employees of tax-exempt organizations. Other types that qualify are a Pension Plan, Thrift Savings Plan, TIAA CREF, 457 Deferred Compensation Plan, or a non-traditional IRA.

Are my gold, silver, and other precious metals safe while they are in my IRA?

Yes. The IRS has rules on how precious metals IRA accounts must be managed. They must be maintained by a depository and administered by a custodian who is a financial institution. 

When can I take possession of my gold and silver? 

The owner is able to take physical possession of the precious metals when owner reaches age 59 1/2 years of age. That is the time when he or she becomes eligible to take qualified distributions.

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