What Exactly Is A Gold IRA Investment Account

Finance | Retirement | Gold IRA | Article By: eBackers Staff Writers – 11th April, 2020

If you want to buy gold, I’m sure you’ve thought about using your 401k to do so. Not everyone has thousands of dollars on hand to go out and buy some, so making sure that you know how to go the rollover route is a very good idea. Who doesn’t like options, right?

That’s why, today, I’ll be showing you exactly how to buy gold with your 401k. Therefore, if this is something you may be interested in, it’s definitely worth giving this post a read.

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While it may seem really complicated, trust me, it’s really not. All you need to do is simply know the steps. That’s why I’ll be breaking each concept down its own, this way you can skip around if you need to. Here is a look at what I’ll be going over:

  • How to buy gold with your 401k
  • The benefits of buying gold with your 401k
  • Final thoughts

Now, without wasting time, let’s jump right in.

How to buy gold with your 401k

Your 401k is your retirement, and in some cases, it might even be your only source of retirement. Now, while a 401k might be a great account, sometimes you’ll want to diversify your portfolio. So, if you’re reading this, I’ll assume that you’re looking to roll some money from that 401k of yours into a gold IRA.

It’s not as simple as a 1035 exchange

If you’re familiar with moving funds around, you’ll know that a 1035 exchange is how you move money around in most cases. This allows you to make sure that money is moved without any penalties, and when done properly, everything moves over relatively quickly. Unfortunately, with a gold IRA, this is not the case.

Setting up a self-directed IRA

The first thing you’ll need to do is set up a self-directed gold IRA. This is the account that you’ll be using to buy the actual gold, and it shouldn’t be too hard to get it up and running. You’ll want to consider a few different brokerage firms and find one that works well enough for you.

Then, once you find the firm that you like the most, you can start to begin the process. This requires finding a custodian or trustee to manage the account because you technically can’t store it on your own. Some things to consider before selecting a firm are:

  • Where your gold will be stored
  • Who is a good and trustworthy custodian
  • How much you should rollover

Once you have an idea about these 3 categories, you’re ready to start the process.

Reach out to your 401k holder

Your 401k, if it’s through work, is typically held by an investment firm sponsored by your employer. So, if you want to actually move money to and out of that account, you’ll need to contact this company. They’ll send you the paperwork, and you can send the paperwork to your broker.

Decide on the amount

The final step to this process is determining the amount that you actually want to rollover. This means that you should be focusing on how much money you want to leave in your 401k, and how much money you want to move into your new account.

Now, before you do this, here are some things you should always consider:

  • Do you already have other investments?
  • Are you an aggressive or passive investor?
  • Do you have faith in the value of gold?

You should always consider how much of your retirement you want to put in gold. This is due to the fact that sometimes it may be harder to turn it into cash right away, as opposed to selling shares of EFT accounts.

The benefits of buying gold with a 401k

Now that you know what the process looks like, chances are you’ll want to know how well it actually works for your retirement. An IRA account is designed to help you survive when you’re done working, so it only makes sense to trust the best accounts with your wealth. Luckily, gold can be great, so let me tell you why.


The rate of inflation in the United States varies, but it tends to hang out around 3%. This means that you’ll have some trouble maintaining the value of your wealth if you get any less than 3% growth on your money. This is why gold can be great because it usually will net you between 3-4% growth. So, even during the bad years, at least you’ll be keeping up with inflation, right?


It’s always a good idea to diversify your portfolio because having all of your eggs in one basket can be very dangerous. This is due to the fact that the market may tank, and if all of your retirement is in one place, you might not be able to retire when you actually want to. Therefore, having gold as a safety net can be a really good idea to prevent this from happening.


Your 401k is technically a risky account to be invested in. While it may grow between 6-10% annually, there are times where it may dip in value. This can occur in recessions or even other situations in which financial ruin occurs. Gold is based on the dollar, which means that when the market tanks, the value of your gold IRA will actually increase. How is that for risk management?

These are just a few of the benefits to consider, and as you explore more, you’ll find that gold can be a really good asset in your portfolio.

Final thoughts
I know that I went over a lot so far, but investing in gold is something you should always do with great care. This is especially true if you’ll be moving money over from a 401k, an account that likely has most of your retirement in it. Therefore, always consider how much you’ll want to move.

If you ever feel a bit lost about what to do, you can always use this article as a guide. Like I said before, I just want to make sure that you make the right decisions with your money.

Always keep in mind that you don’t need to roll over your entire 401k account to invest in a gold IRA. This is something that a lot of people don’t know, and I get why that can sound risky at times. Luckily, as long as you meet the minimum decided by a firm, you can rollover the desired amount without any real penalty.

Now that you know what it takes to buy gold with your 401k, how much will you rollover? You can also roll over money from an investment account if you need to. This includes mutual funds, ETFs, and other tax-deferred vehicles as well.

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More About Gold IRAs

Frequently Asked Questions

Can my IRA hold anything other than gold?

Yes. Your new precious metals IRA is self-directed, and you have the authority to invest into any assets that you want. You don’t have to just allocate your funds to gold and other precious metals, you can also put them into stocks, cash accounts, mutual funds, and more. There are also other gold related investment products that you can invest your funds into.

Can my existing IRA be rolled over?

Yes, funds from an existing IRA can be rolled over to a precious metals IRA and you can do this as often as you want without having to pay penalties or taxes. You will simply need to set up the new IRA and then authorize the transfer of funds. Typically, the custodian of your new IRA will handle this and will work with your existing custodian to work out the transfer of the funds. IRA rollovers are subject to time limits and other restrictions and you may have to report it to the IRS. In order to avoid complications, be sure to get tax advice before you start the rollover process. Also, you can invest in gold with your 401(k).

What is the difference between a traditional a self-directed IRA?

A traditional IRA is controlled by a custodian or trustee. You must allow them to direct your funds into investments that they deem to be worthy. A self-directed IRA is where you get to choose where your funds are invested. You don’t have to follow the decisions of a custodian or trustee. The main benefit of the self-directed IRA is that you get to choose from stocks, bonds, precious metals, mutual funds, CDs, or other IRA-compliant investments.

How can I invest my IRAs into precious metals?

As long as your IRA is self-directed, you can simply direct some of your funds into precious metals. Most commonly, you can invest in palladium, platinum, silver, or gold. However, you must know that any precious metal, whether it be in coin or bullion form, must meet certain requirements of purity and refinement.

Can my existing IRAs be used to invest in precious metals?

Typically, yes. However, the final decision is left to your current custodian or trustee.

Is it OK to have more than one IRA?

Yes. There is no limit on how many IRAs you can have at once, but there are limitations on the total amount you can invest annually into IRAs. In December 2011, if you were under 50, you can contribute up to $5,000 per year in all IRAs. If you were over 50, you can invest up to $6,000 per year.

What is an IRA?

An IRA, or Individual Retirement Account, is a savings plan for your retirement that has been designed specifically to provide tax advantages to individual investors such as tax-free or at least tax-deferred growth of earnings. There are several different types or IRA accounts- all of which have different rules that govern the mimimum withdrawal age, annual limits on contributions, and others. Most commonly, IRAs are used to supplement an employer’s 401(k) account and typically will be the majority of your investment portfolio.

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