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How to Move 401k to Gold Without Penalty

Andrew Carr | September 5, 2021

The best way to move your 401 k to gold is to structure a self-directed IRA (SDIRA) using a precious metals broker as the Trustee.


After doing that, request a transfer from your traditional IRA or 401 k to the self-directed account. This is a trustee-to-trustee transfer, so it doesn’t cost anything to make this change. And, there are no taxes or penalties that you will need to pay with this type of rollover. The Roth IRA and traditional IRA have contribution limits that are bound to cash, stock, mutual funds, and bonds only. 


Another benefit is that there are no restrictions on the number of 401k accounts and gold IRAs you can have. If you want to, you can keep the retirement accounts you have now in place when you open up a self-directed gold IRA or Solo 401k to a precious metal account.


When you want to move a 401 k to gold without penalty, it is only possible when you have left the company that provided the 401K account. An active 401K account is not eligible for a gold IRA rollover.


This short article shows you how to move 401 k to gold without penalty. We’ll expand on the individual steps below and answer some common questions that Gold Investors tend to ask.

It’s easier than you might think and you can avoid paying IRS penalties and taxes on your 401k rollover. The key term you’ll want to remember is “direct rollover”. When you do a direct rollover, your provider or trustees handle the transfer so it’s hands-free on your part and your funds automatically show up in your new account.

That was the good news.

If you handle the transfer yourself, that’s known as an indirect rollover. With an indirect rollover, the funds are given to you and a percent may be taken out for taxes. You just have to make sure that the rollover is completed within 60 days. If your previous provider or trustee kept a percentage of the funds for taxes, you will have to replace those funds in the new account.

Also, the new account must be a tax-deferred plan. You cannot deposit any rollover funds into your own bank account unless you are at least 59.5 years old. Otherwise, you will have to pay IRS penalties on that withdrawal.

What Are The Best Companies To Help Me Convert My 401k Into Gold?

If you want to expand your portfolio with an investment in a gold IRA, there are a few companies that are better than the rest that can help you get started. Many companies do not allow you to invest in precious metals. We believe these are the best gold IRA companies listed below.

Goldco is one company that serves as a brokerage for gold IRAs. They are ranked highly for their customer service and do an excellent job of managing client accounts with gold IRA custodians, storage facilities, and other retirement account providers.

Because Goldco is a broker, they only handle the buying and selling of precious metals. They are not allowed to store the gold at the facility due to Internal Revenue Service (IRS) regulations. Only a custodian can store gold and other precious metals. While Goldco cannot serve as the custodian of the physical metals, they can help you facilitate finding the right company to do that for you. When you have the right company for your needs, Goldco will help you buy coins and bullion that have already been approved by the IRS.

If you are trying to do a 401 k rollover, Goldco can help with your gold investments. They are a great way to supplement your retirement savings. And, they can handle all of the paperwork involved in the transfer of your account. This is a gold IRA company that can also help you with buying silver and other precious metals.


☑  Goldco has an A+ rating from the Better Businesses Bureau.

☑ Ability to invest in precious metals.

☑ Long track record of working with gold IRAs accounts.

☑ Goldco is well-known for its excellent customer service.


☑ The annual fee is $175 for accounts that are worth less than $100,000.

Augusta Precious Metals helps clients open and manage their tax-advantaged retirement accounts. Through these accounts, you may have tax benefits when you can invest a portion of your retirement account in precious metals. The custodians who work with Augusta Precious Metals to store the physical gold are Goldstar Trust, Equity Trust, and Kingdom Trust. While these are the main companies that Augusta uses they can also work with any other gold IRA custodian.

Augusta Precious Metals is able to assist you in the purchase of premium coins, bullion, bars, and rounds. They also sell collector sets and commemorative coins.

A price protection program that gives an added level of protection is also an option. If in the first seven days of when you place your order the price of your precious metals increases, Augusta Precious Metals will honor the rate you were originally quoted. If that wasn't enough, clients can get a quantity discount on large bullion orders.

You can cancel any order within the first seven days for any reason.


☑ Offers many IRS-approved storage options for silver and gold IRAs

☑ Lifetime customer support

☑ Customers have an assigned, personal agent.


☑ Online orders are not available

Birch Gold Group is based in California where they began operations in 2003. They are a brokerage firm for precious metals. They have a wide range of experience in gold, platinum, silver, and palladium.

Through Birch Gold Group you are able to purchase gold for personal reasons as well as for a retirement IRA. They are well-known for their dedication to client education and ensure you are aware of any risks involved so you can make an educated financial decision.

All of the investment options are approved by the IRS for gold IRAs. Other than buying physical gold, you can also purchase stocks, mutual funds, real estate, raw land, bonds, private loans, and other investments.

After you choose Birch Gold Group as a broker, they will help you find a custodian. If you already have a custodian, Birch Gold Group can work with them to buy and store your gold. They can also help you sell gold to many investors wanting to buy gold. The company can ship your gold to approved depositories. For example, you can store your gold with Brink's Global Service or Delaware Depository.

Rollover IRA to Gold

There are many great reasons for gold and precious metals to be included in your retirement investment options:


☑ Protection against the dollar being devalued

☑ Protection against the volatility of the stock market

☑ Hedge against Inflation. Gold prices always move in the opposite direction to the dollar. When the dollar goes down in value, the value of gold increases.

☑ Having a retirement account that is protected and diversifying a traditional portfolio that contains only stocks and/or bonds to a gold portfolio as a part of your retirement plan.

☑ Growth opportunities during bull markets in precious metals.

The main question you want to have answered, How to move 401 k to gold without penalty, the focus has been on the same rules pertaining to gold IRAs and gold IRA companies. Here in the gold IRA rollovers guide, we highlight the most important IRS guidelines listed in the internal revenue code.

Internal Revenue Code 408(m)(3) details the guidelines and rules for investing in Coins and Bullion inside individually-directed qualified plan accounts (IRAs).


What are the differences between a Roll over and a Transfer?

In a rollover, the money being taken out is moved directly from one Trustee to another without you (the client) taking possession of it.

With a transfer, you will take a distribution from your traditional IRA retirement account and put that money into another tax-preferred account that may also have tax benefits.

The key difference is when you take possession of the retirement funds.

Gold IRA Transfer Rules

You have sixty days from when you take possession of the funds from your current Trustee to deposit the money in a gold IRA account with one of the approved gold IRA companies.


If the transaction is not completed within 60 days, the funds that were taken out become taxable from the time you withdraw money and are treated as regular income. Regular income withdrawals are subject to a ten percent early withdrawal penalty for investors under 59 ½ years of age.

Gold IRA Rollover Rules

A direct Trustee-to-Trustee rollover is the easiest way to set up a gold IRA.


When you transfer the funds in this way, you do not personally receive any of the funds, so there are no sixty-day gold IRA rollover rules to worry about.


In most cases, the IRA Trustees will make the transfer of funds by wire.


Per the IRS rules, you can only have one IRA rollover per year with a gold IRA.

The process to set up a...

Gold IRA

At a high level, these are the steps you will do to begin to set up a gold IRA account.


First, you will open a self-directed IRA account. This will be done with an IRS-approved precious metals IRA broker-dealer.


Then, you will make them the Trustee of your gold IRA account.


Once the gold IRA account is open you perform a direct transfer or rollover from your existing 401k to the new self-directed gold IRA.


Funds inside the gold IRA may be used to buy permitted forms of gold and other precious metals.

Permitted Forms of Gold

The IRS only allows certain forms of Gold to be held in a 401k or IRA as specified in U.S. Code 408 (Individual Retirement Accounts). 

General Guidelines For Gold:

☑  Gold coins, rounds, and bars must be 99.5% pure

☑  Gold must be sourced from a national government mint or approved refiner

☑  Gold coins in 1, 1/2, 1/4, and 1/10 of an ounce are permitted

☑  Some non-US Gold coins rated at 99.5 percent are eligible

☑  Fractional ownership of coins and bars is NOT permitted

☑  Numismatic coins are NOT permitted

How To Convert 401k To Gold

American Gold Eagles

Australian Gold Kangaroos

Austrian Gold Philharmonics

Burnished Gold Eagles

British Gold Britannia

Canadian Gold Maple Leaf

This is what it is ALL about, where you actually convert 401 k to gold by choosing the specific gold coins and bullion that you will deposit into your gold IRA.


As an example, Goldco can be used as our Trustee and Broker-dealer. You would get in touch with one of their highly qualified gold IRA representatives.


Below is a list of gold coins that meet IRS rules, but you would want to work with your representative to choose the ones that are right for you.


Gold bars come in multiple weights:

☑ American Gold Eagles and Gold Buffalos

☑ Australian Gold Kangaroos and Nuggets

☑ Austrian Gold Philharmonics

☑ Burnished Gold Eagles *

☑ British Gold Britannias

☑ Canadian Gold Maple Leafs

☑ Chinese Gold Pandas

☑ Mexican Gold Libertads

☑ Proof American Gold Eagles *

* Do not pay an extra charge for limited edition or proof coins. This is true in most cases, but even more so for a gold IRA where the physical gold is going to be stored in an IRS-approved depository. You will not keep the physical assets of the gold yourself. 

Buy the form of gold that has the lowest premium over the price of Gold Bullion.


The objective is to obtain the maximum number of ounces possible for a given amount of money.


For example, if the premium on Australian Gold Kangaroos is lower than the premium on British Gold Britannias, buy Australian Gold Britannias. If a 100-gram gold bar has a lower cost than three Gold Maple Leaf Coins, get the gold bar.

Roll over 401K to Precious metals

As long as the precious metals meet the IRS requirements, you are able to roll over a 401K to the precious metals IRA account.


In general, this includes those coins that were previously mentioned and also includes Bullion bars. As long as they are of the specified tolerance, you can use you can rollover your 401k account. This includes coins from the government mint.


Gold, Silver, Platinum, and Palladium are the four Precious metals allowed by the IRS. You are not allowed to use Rhodium in a rollover account.


Gold IRAs have unique characteristics and finer points. When you are researching your 401K rollover to physical Gold here are a few points to write down and discuss later with a customer service representative.


Beneficiaries, Representatives, and Interested Parties for the gold IRA


You will need to designate beneficiaries for your gold IRA, who will represent you if you're not able to represent yourself or are incapacitated, and interested parties if you have a financial advisor for the gold IRA.


You will be able to specify both a primary beneficiary and contingent beneficiary (if you desire). You will also have the chance to designate more than one.


A representative is the same thing as having a Power of Attorney for your gold IRA. They have complete access to your account and are able to execute transactions on your behalf at their discretion. A representative in this capacity is only needed after the gold IRA account has been established. They are not needed when you are having it set up.


When working with an investment advisor, you may want to designate them as an Interested Party. When you list them as an Interested Party for the account, the Custodian or Trustee can talk to them about your account without you being present. 


The difference between an Interested Party and a Representative is that the Interested Party does not have the power to execute transactions on your account. They are able to get information and relay that to you that you can make decisions later without having to be present for that conversation.

Where Your Precious Metals Will Be Stored

There are three parties that take part in a gold IRA transaction. 1) The Investor (you), 2) The Trustee, 3) The Custodian.

In most cases, the Trustee has established relationships with IRS-approved metals depository facilities with past experience of making these rollover and investments for other people before you. If there had been an issue with one of them in the past, they would not be recommending them to you. As the Investor, you will choose the depository that will be the Custodian of your gold IRA.


The following is a list of the most widely-used  storage facilities for gold IRA accounts in the USA:


☑  Citadel Global Depository

☑  Delaware Depository

☑  Brinks Global Services USA

☑  International Depository Service

☑  Texas Precious Metals Depository

☑  Texas Bullion Depository

☑  A-M Global Logistics

Frequently Asked Questions

Diversifying your retirement portfolio involves a little bit of research. But, when you are converting to a gold IRA it is pretty easy process. These are some of the most frequently asked questions about moving a 401 k to gold.

Can I Invest My 401(k) in Gold?

Your current 401(k) plan may not let you invest in gold, but there are different plans that allow gold investments. You should keep in mind that there are specific IRS rules about how the gold must be bought and stored. Because of this, it is important to find a reputable company to work with.

Do I Have to Pay Taxes When Rolling Over a 401(k) to an IRA?

You are legally allowed to do a 401(k) rollover without paying any taxes and to avoid irs penalties. To avoid taxes, you will need to do the 401(k) rollover correctly. You should start by contacting your current 401(k) plan so that you can get started on the process. This process can take several weeks or months to complete, so you should begin it as soon as possible.

Can I Buy Gold Without Paying Any Taxes?

Traditional IRAs and 401 k plans are tax-deferred savings accounts. This means that you do not pay any taxes on your contributions. You also do not want to exceed the contribution limits or you may incur a penalty as well. Down the road after you have retired, you will want to withdraw your funds, that will be a taxable withdrawal. If you buy gold for personal reasons and not for your IRA, you do not get any tax breaks. The only way to escape from paying taxes right now is by buying gold through your 401 k plan or IRA.

Can I Buy Physical Gold in My 401(k)?

You can absolutely buy physical gold in your 401(k) plan, but this process can be a little tricky. Technically, your individual retirement account cannot be the seller and holder of the gold. They have to store physical gold with a third party. You are not personally allowed to hold physical gold. According to the IRS, your 401(k) plan can only contain physical gold if someone else is in charge of storing the gold. While you may be allowed to access the storage facility, you will not be allowed to have physical control of the gold.

Do I Own Physical Gold with a Gold ETF?

No. With a gold ETF, it certifies that you have a vested interest in physical gold, but you do not actually have ownership in it. Gold ETF's, along with gold mutual funds, gold-related stocks and gold futures and option contracts are considered gold derivatives.

I hope this article has answered your questions about how to move your 401 k to gold without a penalty.

Again, these are the best gold IRA companies we recommend to assist you in that effort.

☑ Goldco

☑ Augusta Precious Metals

☑ Birch Gold Group 

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