Complete 401k to Gold IRA Rollover Guide

By John Simpson

August 4, 2021

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While 401(k)s are a great way to secure your future after retirement, would you be comfortable knowing that they are tied to the stock market?

Without a means or options to invest in such as real estate, a 401(k) could prove risky especially when the markets become unstable. If you’d like to avoid this, then consider investing in an IRA (individual retirement account) instead. In this article, we’ll be looking at how one can turn their 401(k) into an individual retirement account.

Since 401(k)s are employment-based, knowing what to do with one when you start working for a new company can be quite frustrating. For instance, you could have it combined with the next employer’s 401(k) or you could opt to cash it out.

As you can already tell, deciding on what step to take is not that easy especially since it affects both your retirement plans and income tax. This is a decision that will determine how comfortable and financially secure your life will be once you retire.

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The money you have invested in your account is another thing you need to consider. If you’ve invested a small amount, like $4,000, then cashing out wouldn’t be a bad decision. It would be a great way to take care of essential expenses that you might need some extra money for like buying a new dishwasher.

However, if you’ve invested a substantial amount of money in your 401(k), then consider leaving the money in the account as cashing out could lead to you being charged severe tax penalties. Furthermore, it could lead to your new job not allowing you to merge your current 401(k) into a new one.

And while that’s the case, it’s worth noting that your new employer has no say in whether or not you roll your 401(k) into an individual retirement account. The other thing worth noting is that you aren’t required to roll over your account right away. Nevertheless, it is good knowing that you can.

So, what does it take to turn a 401(k) into an individual retirement account (IRA)? Let’s have look.

Why Gold?

From March 2020 to date, central banks have printed well over 75 percent of the money in U.S. history. Yes, 75 PERCENT! Within the last year alone, central banks printed about three-quarters of ALL money ever produced – that’s trillions of dollars – out of thin air. That’s quite astonishing!

So, you might be wondering how this concerns you when you’re so close to retirement. Well, it has everything to do with the effects an influx of money has on inflation. When the money in circulation is too much, there is a very high likelihood that the dollar will lose its value in the not-so-distant future.

With looming uncertainties in the current political and economic climate, fewer people trust governments and central banks to be fiscally responsible or to make sound financial decisions.

As we’ve already seen, some of the decisions they’ve made in recent days have already jeopardized our purchasing power. As someone who’s inching closer to their retirement, you don’t want to find yourself in a position where an economic collapse decimates your retirement savings.

The good thing about gold is that it’s not tied to traditional assets and stock markets. Historically, the relationship between gold and dollar/dollar-based assets has always been inverse. As a result, it always does great in periods of inflation.

Due to this, gold is the perfect solution for protecting the value of your money. Investing in gold could mean that you get to retire comfortably without having to worry about a sudden 40 to 50 percent (or even more) drop in the value of the money you’ve saved for your retirement.

The rollover individual retirement account option we will be looking at in this article is one of the best options for upcoming retirees. And that option is the Gold-backed IRA.

Gold-backed IRAs are an option that many people are talking about of late – and especially due to today’s political and economic climate.

What Options Do You Have with Your Current Plan?

If you have a 401(k) and are just about to retire, then you have four options to work with, and they include:

Cash Out

Withdrawing all the money from your 401(k) isn’t that difficult. All you have to do is instruct your trustee to turn your 401k into liquid and send you a check. Once you’ve cashed out, your account gets closed, and that is it.


  • If you haven’t invested much in your 401(k), then liquidating your account is the best thing to do. You can use the cash you receive to settle a debt or for other expenses.
  • A lower tax liability could mean you will not get heavily penalized; you can settle credit card debt interest too.


  • Since the money you withdraw is taxed, you could end up being heavily taxed if your tax bracket is above 12 percent.
  • The Internal Revenue Service taxes anyone younger than 59 and a half years a 10 percent penalty for early withdrawal. 

Leave It as It Is

You have the option to leave your old plan untouched unless your new employer has a rule that requires new employees to transfer their 401(k) once employment ends. If there are no regulations, then you are free to let your money sit in the account.


  • This option does not require any effort from your end. If your 401(k) has excellent choices for plan performance and investment, then let it be. 


  • If the 401(k) model doesn’t interest you that much, then choosing this option doesn’t make much sense.
  • Leaving your money in the account could lead to you accumulating yearly maintenance costs, amongst other expenses.
  • Leaving several 401(k) accounts from different jobs sit could lead to you paying a substantial amount of money in fees for the accounts.

Roll Over Your 401(k) to the New Employer

Under this option, you merge your old 401(k) plan with the current one. Once done, you get to enjoy all the benefits your new 401(k) plan has to offer.


  • This option might be the best solution for you if the new plan offers reduced fees and better investment strategies. 


  • Your new employer might not be allowed to do this.
  • There is a possibility that the new plan comes with higher costs and does not let you do much investment-wise. 

Learn Why Now Is A Better Time Than Ever To Invest In Gold!

Rollover Your Account into an IRA

Apart from rolling over your 401(k) into another 401(k) account, you could also opt to roll it over into an individual retirement account instead.


  • This option allows you to put the money in your 401(k) into an IRA. This gives you more investment options to work with while reducing costs.
  • Working with a professional and experienced agent will mean that you get the advice you need to understand what an IRA is and how to invest in one. 


  • This option isn’t for you if you are not that into investing.
  • If you don’t want another party making decisions for you, you have the option to let a Robo-advisor handle the decision-making for you.
  • You may end up losing some legal benefits when you roll over your 401(k) investment into an individual retirement account. More on this in the next section.

Advantages of Rolling Over Your 401(k) into a Gold Individual Retirement Account

One of the main reasons why you should consider having your 401(k)-account turned into a Gold-backed individual retirement account is that you get more control over your investment.

Here is a look at some of the things that you can do/control with a gold-backed IRA:

  • You get to choose your trustee. The good thing about individual retirement accounts is that you get to choose the investment platform you’ll use. The good thing with these platforms is that customer care is available 24/7 and has lots of useful aids designed to help you learn more about IRA investing.
  • You get more investment options. Compared to IRAs, 401(k) accounts have very limited investment options. The good thing with IRAs is that you have more options to invest in – apart from money, you also can invest in precious metals, stocks, options, bonds, and real estate.
  • It’s easier to control how much you spend on fees. One of the things that keep people from investing is a fear of fees. While you still have to pay fees when investing in an IRA, the amount you pay isn’t as egregious as you think. Most brokers do not charge any fees while other options, like Robo-advisers, can manage your portfolio at very reasonable rates.
  • Easy access to your funds. As a rule of thumb, you should avoid withdrawing money you’re your retirement plan before it is time to do so. However, individual retirement accounts are a bit more conducive than 401(k) accounts and other plans in this area.
  • Roth IRA option. You could opt to convert your 401(k) into tangible gold, either completely or partially, in the form of a Roth IRA. These individual retirement accounts allow you to take tax-free distributions once you retire. They also do not have a limit on distributions once the investor turns 70 and a half years. While jobs offer Roth 401(k)s, it is not the norm.

Disadvantages of Rolling Over Your 401(k) into a Gold Individual Retirement Account

While it’s good to consider the benefits, it’s advisable that you also consider the disadvantages of rolling over a 401(k) into an individual retirement account. They include:

  • There’s no separation from service exemption. Though you are advised not to withdraw from your account before hitting 59 and a half years, it is easier to cash out from a 401(k) than an IRA. That is because the IRS waives a 10% tax penalty for premature withdrawals at some ages, like 56 years, as there’s a separation from service exemption. Individual retirement accounts do not have this exemption.
  • 401(k)s have more law protections. 401(k) accounts are essentially ERISA plans, which means that they enjoy more legal protections. That means that the funds in 401(k) will never be under threat in creditor demands, civil cases, or bankruptcy. However, it’s worth noting that IRAs also do have some protections. Both Roth and Standard individual retirement accounts allow a little bit over $1,300,000 to be untouchable during a bankruptcy case. It is also worth noting that most states in the country have laws prohibiting creditors from going after IRAs. 
  • It’s easier to merge new job plans with a 401(k) than with an IRA. While merging old plans with new ones is easy and quite common when it comes to 401(k) plans, the same does not necessarily apply to IRAs. 

Traditional IRA vs. Roth IRA

So, you’ve decided to roll over your 401(k) into an individual retirement account, but where do you invest your money in? a Roth IRA or a traditional IRA? In this section, we will be discussing both options for you to get an idea of how they work.

Roth IRA: How Does It Work?

While opting to roll over your 401(k) into a Roth individual retirement account can feel like a significant financial hit at first, it could end up being quite a relief for you in the long run. That is because rolling over from a 401(k) plan to a Roth individual retirement account does lead to tax liability.

The total sum of 401(k) plans is subject to income tax, and that doesn’t include post-tax contributions. Fortunately, there is no 10% penalty for early withdrawal.

Let’s say your federal and state marginal income tax rate is 30% and you roll over $100,000 from your 401(k) account into a Roth individual retirement account. Since the rollover is subject to taxes, you will owe the IRS $30,000 between either tax rate. And while such a hefty cut in your investment could cause anybody to shudder, the good thing is that there are some promising developments soon.

Once you hit 59 and a half years, you are free to enjoy tax-free distributions from your individual retirement account. The only catch is that your Roth IRA should be at least five years old for you to qualify.

A Roth IRA is a great plan for anyone who believes that they will have reached the upper tax bracket by the time they are retiring and those who believe that tax rates will shoot within the next few years. Furthermore, they are the only individual retirement plans that do not require RMDs.

When it comes to Roth IRAs, you are required to start taking distributions once you reach 70 and a half years. However, unlike other plans, Roth individual retirement accounts allow you to determine how much you can withdraw from your account.

A Roth IRA is a great option if you are the type of person that does not want their cash to run out before they pass. If you’ve already invested in one, consider not withdrawing from the account for as long as you can. The longer you hold out, the more it increases. Let it be your last resort; your go-to solution when all other options have run dry.

Traditional IRA: How Does It Work?

All the advantages and disadvantages we have talked about so far are in traditional individual retirement accounts. The greatest advantage when rolling over a 401(k) to a traditional IRA is that there are no tax penalties.

All you have to do is transfer funds from your 401(k) to a traditional individual retirement account and cite it on the next tax returns. No income tax will be deducted, neither will you be penalized for early withdrawal.

If you are looking for an option to roll over your 401(k) to gold without being penalized, then this is it!

Your cash will stay put in your individual retirement account tax-free as you wait for your retirement. Furthermore, once you reach 59 and a half years, you are free to withdraw your money consequence-free. What that means is that, in the long run, your withdrawals will be like an entirely new income source for you.

While you can still withdraw funds before retirement, you will have to deal with income taxes and a 10% tax penalty for withdrawing early. However, these penalties can be avoided if you have a solid reason for cashing out some of the money in your account.

Once you hit 70 and a half, you will be required to take RMDs, which are determined by your life expectancy.


If you are thinking of rolling over your 401(k) to an individual retirement account, it’s good you know about the fees charged. Something worth noting about self-directed IRA fees is that they are generally less than those of 401(k) accounts.

Fees typically charged include:

Annual fees: Individual retirement accounts usually do not have annual fees. While some plans do charge annual fees, the cost often isn’t too hefty.

Trading commissions: Some brokerage firms will waive trading commissions (fees) for trades with ETFs (exchange-traded funds), stocks, and options. However, you probably will be charged for other types of investments like mutual funds.

Load fees: Mutual funds come with a sales charge known as a “load fee” that can be up to 3%. Nevertheless, you may find some mutual funds that work as “no-load.” One way to avoid these fees is by holding on to your funds.

Management fee: These fees are synonymous with managed funds. A good example is Robo-advisers. Such accounts typically charge an annual fee of about .25 to .50%. If you have $100,000 in your retirement account, that means you’ll be charged anywhere between $250 and $500 each year. In most cases, this is deducted as a pro-rated amount monthly.

Expense ratios: These fees are charged to cater to administrative and marketing costs. Also known as 12b-1 fees, expense ratios cost up to 1% per year. Nevertheless, there are some funds whose fees are lower than .20%. The fees are not stacked on your fund, rather they are integrated into it, meaning the overall return is lessened.

If you are thinking of investing in mutual funds or ETFs, then the best broker to work with is Vanguard. The brokerage firm allows clients to trade with stocks and other types of securities. However, it’s worth noting that they do charge trading fees. Fortunately, though, they still have a few mutual funds and EFS with no fees.

Since most professional portfolios involve Vanguard funds, you can rest assured that you are in safe hands when you choose them.

How to Start the Roll Over Process?

You have two options to work with when rolling over a 401(k) to an individual retirement account. The first one is doing what’s known as a direct rollover. Under this option, you directly transfer funds from your 401(k) into an individual retirement account with the help of a trustee.

The other option involves doing an indirect rollover. Under this option, you place a request and have your money is sent to you before you put it in your individual retirement account. However, it is worth noting that you are required by the IRS to transfer the funds within 60 days, failure to which you transfer could end up being deemed a 401(k) distribution.

Considering both options, direct rollovers are much better since you do not have to worry about beating the 60-day deadline or the financial consequences that come along with it.

For help rolling over your individual retirement account to gold, get in touch with your IRA custodian. Your custodian will advise you on what to do and will liaise with the person managing your 401(k) plan and work to ensure that your cash is properly deposited.

If you would like more information on this topic then you may want to read this article from Bmogam.  They have done a lot of in-depth research on this topic that I found helpful in learning about the best ways to transfer an 401k into a precious metals IRA.

Is Rolling Over a 401(k) to IRA Worth It?

Many people today are opting to roll over their 401(k) plans to individual retirement accounts. But why not, considering the tons of benefits IRAs have to offer. Once your rollover to an IRA is completed, you will have many more options to work with than what you initially had with your 401(k) account.
Since IRAs allow you to choose your investment opportunities, how much you pay in fees, and trustees, you know that you have more control over how and when to invest and that you have more power to determine the path your future takes.

Once you’ve rolled your old 401(k) into an individual retirement account, you still have the option to start a new 401(k) plan with your new employer. Imagine how great it will be when you retire and have two prolific retirement accounts to withdraw from?

John Simpson

About the author

Welcome! In these perilous times of government overreach, reckless fiscal and monetary policies, shutting down small and medium sized businesses and paying people not to work, it has become my mission to protect my assets, my family's assets, and educate as many folks as possible on ways to protect their savings, retirements, and purchasing power, from rapidly devaluating fiat currency.

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