Learn How to Buy Gold with Your 401k to Protect Your Retirement Savings

A 401k plan allows you to save up to a certain amount in your account tax-free and defer it until you retire. However, one way to take advantage of your 401k plan can be by buying some gold.

When people think about the best ways to invest their retirement savings, most think about a 401k plan. A 401k plan allows you to save up to a certain amount in your account tax-free and defer it until you retire. However, one way to take advantage of your 401k plan can be by buying some gold.

Although a 401k plan is technically tax-free within limits imposed by law, one of the advantages of Gold is that it doesn't experience the same price fluctuations that stocks and bonds do. In other words, if you buy some gold today, you can make money in the future, even if there's a recession and the stock market declines. This article will provide a general overview of the process of buying Gold with your 401k plan to grow your retirement savings. 

Why Invest in Gold with Your 401k?

If you have a 401k plan, you should know that it's possible to grow your retirement savings by investing in Gold. Some experts say buying and holding Gold can, over time, outperform stocks and bonds. Moreover, investing in Gold has many other benefits, including:

Gold Investments Are Solid Tangible Assets

Gold Investments Are Solid Tangible Assets

Gold is a universal currency, second only to the U.S. dollar. It's traded in most countries worldwide, and you can use it to buy things or exchange it for cash at a bank or other financial institution. In addition, Gold never goes "bankrupt," unlike stocks and bonds. 

This means Gold will still hold its value as currency even when a significant economic collapse hits the market. Additionally, there has never been a period in history when Gold has lost all its value. This makes it an ideal investment for retirement savings over the long term.

Diversification and Risk Management

Gold investments can help diversify your retirement savings plan. You could put a few thousand dollars into Gold, and that money will sit in a different "bucket" of your portfolio on the opposite side of the spectrum from your stocks. If you have 100% stocks, putting some gold into your 401k plan can reduce your overall risk since Gold has historically endured all forms of market turbulence.

Additionally, because it does not correlate with stocks or bonds, Gold is an ideal investment for retirees concerned about risk management. It's a haven and often rises in value when stocks and bonds fall. And because it has different sources of demand, Gold can remain valuable even when one market is soft or weak.

Hedging Against Inflation

Gold is a good hedging strategy against inflation. Inflation has historically played a significant role in many recessions, and the U.S. dollar has devalued. You can buy Gold and store it in your retirement plan and delay selling it until you're in retirement. After retiring, you can sell that same amount of Gold and buy something different, like bonds or stocks, to offset the value drop you feel during inflationary times.

Tax Benefits

You can take a tax deduction when you contribute to your 401k plan. You can also sell gold investments in your retirement savings and pay little or no taxes on the profits because gold investments are considered collectibles under IRS code Section 1221.

There's also a rollover provision that allows you to roll over all the assets that have been saved in your 401k plan into an IRA, which perfectly complements the collectible aspect of Gold. 

What Does Your 401(K) Allow You to Invest In?

Unfortunately, most people do not invest in Gold within their 401k plans. Some employers may offer a limited choice of investments, but many do not. Additionally, most people do not understand what can be held in their 401k plan.

Most 401k plans enable you to invest your money in stocks, bonds, mutual funds, and certificates of deposit (CDs). If your 401k plan does not offer gold investment, you may be able to invest through a rollover process. Birch Gold Group provides rollover services by assisting you in establishing a gold bullion IRA and transferring funds from your 401k plan into your new IRA account. You can buy Gold and other valuable metals using your IRA account while enjoying the numerous advantages of a tax-deferred pension account.

How You Can Roll Over A 401(K) To Gold Without Penalty

A 401k rollover occurs when funds are transferred from an old 401k plan to a new one. You can move funds to a new 401k plan or Gold IRA. You can use your new Gold IRA to roll over your 401k plan and purchase valuable metals. The rollover process can be tax-free if you pay attention to the transaction details. You should ensure the rollover process and the transaction are all done in accordance with the law.

Three major scenarios can occur when transferring funds from a 401k plan.

1. Direct transfer or rollover – No penalty

If you transfer the assets saved in your 401k plan directly from your current 401k custodian to a new gold IRA curator, you are exempt from the 10% IRS penalty and income taxes on the transferred amount. The critical point is to avoid taking direct possession of the funds or assets in your retirement account. This is the easiest way to make a penalty-free 401k plan rollover to a gold IRA.

2. Indirect transfer or rollover – No penalty (within 60 days)

You can transfer funds from your 401k plan to a new gold IRA by receiving them directly and then redepositing them. To avoid the 10% IRS penalty and income taxes, you must deposit the entire amount from your 401k plan into your Gold IRA within 60 days of applying for the request to release your assets from your 401k plan. Some prefer this method because they want to utilize their finances as a tax-free loan within the 60-day grace period. However, if the deadlines are missed, this can quickly become costly.

3. Withdrawal – Possible penalty

Withdrawals made from your 401k plan before you reach 59 ½ years are subject to a 10% IRS penalty and income taxes. In addition, you will have to pay income taxes even after you turn 59 ½ years old because your efforts amounted to remuneration.

Exceptions to The Early Withdrawal Rule:

The early withdrawal rule has a few exceptions:

Estate withdrawals

If you pass away and funds get withdrawn from your 401k plan on behalf of your estate, the IRS' 10% penalty will not apply.


If you develop a permanent disability, you will be exempt from the 10% penalty on any withdrawals you make from your 401k plan.

Leave employer after turning 55

If you leave the company you started your 401k plan in the same year you turn 55 or later, the 10% IRS penalty will not be applied to any withdrawals you make from your 401k plan.

The 3 Simple Steps to Buying Gold with Your 401k

We've made it simple for you to understand how to transfer a portion of your 401k plan to a gold IRA. It's a straightforward three-step procedure:

Step 1: Reviewing the account and ensuring eligibility

One of our retirement accounts experts will examine your 401k plan to determine whether you have the option to roll your assets over and will assist you with all the necessary paperwork. We will do our best to respond to your questions thoroughly and promptly.

Step 2: Opening a Precious Metals IRA and rolling over the 401(k) funds into it

Once you've determined your eligibility and the amount you want to transfer, you will be required to find a custodian for your retirement account. If your current 401k plan qualifies for a rollover, sharing assets from your previous retirement account to a new one will result in no taxes or fines.

Step 3: Buying Gold and other precious metals

Once your Gold IRA is operational and funded with the finances from your previous 401k plan, it's time to select the valuable metals you want to buy. Birch Gold Group's valuable metals experts can advise you on the differences between the valuable metals available for purchase and assist you in making the best decision based on your wants, needs, and circumstance. Our experts will also help with the logistics, and once you've made your purchase, your valuable metals will be stored in a certified depository.

Contribution Limits for a 401(K)

Every year, the IRS reconsiders the input limits for 401k plans (and possibly other retirement vehicles) for the following year. This can lead to changes, and it did as of November 2021. The IRS made several significant changes to the 401k input limits for 2022 and the tax year 2021. These include:

For employees

Individual employee contribution limits are $19,500 in 2021, rising to $20,500 in 2022. If an employee has numerous 401k plans, this input limit applies to the total contributions made from all accounts and comprises both old and after-tax contributions to 401k accounts.

For employers

Employer input limits are calculated in conjunction with employee contributions.

Catch-up contributions

Employees aged over 50 can increase their 401k contributions to boost their savings.

Keeping Your Gold Safe in Your 401(K) Or IRA

It is critical to work with qualified, trusted professionals who have a good reputation for following economic laws to help safeguard your retirement funds. To ensure that everything runs well, our experienced custodian manages the legal and administrative aspects of your valuable metals IRA. We can also help you purchase Gold and other valuable metals when you need us to while deciding on other investment options.

What If I'm Not Eligible to Rollover My 401k?

Most people believe they cannot roll over their funds if they are still working in the same company their 401k plan was set up. However, you might be amazed to know that many exceptions may allow you to transfer some or all the assets in your 401k while still working for the same employer.

Now that you know Gold is a solid investment for long-term and short-term goals, there's no reason not to invest in it. The gold market is vast, with trillions of dollars in Gold being bought and sold worldwide. So if you're looking to invest for retirement, you should invest in Gold.

About the Author

Since 2008, Savary Gold has been one of the world's leading mining exploration & investment resources for gold and precious metals. SavaryGold.com's mission is to provide proven insider knowledge resources about retirement investing to its readers to make informed investment decisions and better manage risk.

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Protect Your Retirement with Precious Metals