401K To Gold IRA Rollover

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IRA accounts are commonly used by workers, savers, and business owners to accumulate money without paying tax on the same funds multiple times. Normally, investors have to pay tax when they first earn their initial capital, when dividends are distributed, and when assets are finally sold.

Therefore, it is not uncommon for investors to pay income tax three or four times on the same money. Since each level of income taxation often exceeds a rate of 50 percent when state and local taxes are included, investors can pay a very high effective tax rate over the course of their careers if they do not take steps to minimize their taxes.

Thankfully, the IRS enables investors to reduce their tax burdens by using an IRA account. When an IRA is used, investors only have to pay tax once on their wealth.

Best of all, options are available for investors to own physical gold with their IRAs. Owning gold can have many advantages, and investors should be aware of these potential advantages when building a portfolio.

Goldco - The #1 Pick To Help With A 401k To Gold IRA Rollover

Importance of Holding Gold

Gold has been favored by investors for thousands of years because of its unique physical properties and its historical use as a medium of exchange. In the recent past, gold was used by mints to create coins that were used as money around the world.

However, gold coins were relatively heavy to carry around when large transactions were made. As a result, banks introduced the concept of paper notes that are redeemable for gold. These notes are lighter than gold, and they can be printed in ways that are advantageous in many banking applications.

Importance of Holding Gold

Although paper money is no longer redeemable for gold, the precious metal remains a crucial asset. When economic turmoil arises, gold actually increases in value as investors turn to gold as a safe haven. Consequently, gold is a vital part of any balanced asset portfolio.

Gold is also a relatively stable asset because its supply remains relatively consistent over time. The precious metal is difficult to mine from the ground, so gold producers are not able to significantly vary production levels to manipulate the market. The global supply of gold is publicly known, so it is unlikely that investors could flood the market with hidden reserves.

The price of gold is also highly sustainable since the precious metal has unique properties that make it invaluable in electronics and manufacturing. Gold is the most conductive material that has been discovered, so it is often used for processors and wiring. It can also be made into extremely thin sheets that are useful in electronics and industrial applications.

Basically, gold is an essential asset that human civilization is likely to always need. As time goes on, it is possible that gold could appreciate in value as it becomes more important in high-tech devices. If an economic depression or societal collapse becomes a reality, the precious metal could help to keep investors afloat. Therefore, gold is a crucial asset that every investor should have substantial exposure to.

Physical Gold vs. Paper Notes

Many investors are uncomfortable about the concept of holding only paper notes or digital certificates that give them rights to gold held in inaccessible remote facilities. Historically, there have been many instances of large-scale frauds involving gold that were committed by some of the most trustworthy financial institutions. The potential risks associated with gold certificates are outside the scope of this article, but the bottom line is that many investors are understandably wary of holding only gold certificates or shares in gold ETFs.

Physical Gold vs. Paper Notes

On the other hand, investors who hold physical gold can eliminate any chance of losing their money to frauds. Gold can be securely stored in household safes that can take even the most sophisticated thieves days to steal. Investors can then freely sell their gold while also keeping it close at hand in case of a financial crisis or social unrest.

Why Roll Over Your IRA?

Most investors who have an IRA get started by relying on an investment manager. Unfortunately, most investment managers do not give investors the option of making trades on their own. Instead, investors have to put their money into a pool that gives managers the opportunity to take enormous fees that eat away at returns.

Today, it is normal for investment managers to annually take at least 20 percent of any returns plus 2 percent of assets under management. Sadly, many investment managers merely buy stocks, bonds, and other securities in exactly the same way that investors could do on their own.

Consequently, it makes sense for many investors to move their money into a self-directed IRA. In a self-directed fund, investors can buy the assets that they want.

Why Roll Over Your IRA?

Most self-directed funds enable investors to buy stocks, bonds, cash, ETFs, and other common types of securities. Self-directed funds also give investors the right to borrow money from their IRA without having to pay extra taxes. For instance, investors can take out $10,000 from their IRA to buy a new house or $5,000 after the birth of a new child. Investors can even put up to $50,000 into their own business.

Nevertheless, many self-directed funds do not give investors the full flexibility necessary to take advantage of all opportunities the law allows for. Self-directed accounts are ultimately controlled by a trustee, and investors who do not do enough research usually end up with a trustee who places artificial limits on what an investor can do.

Many funds forbid investors to purchase certain types of assets that are legal for IRA investors to own. Sadly, physical gold is one of the assets that trustees commonly restrict. These trustees will usually try to tell investors that owning ETFs, such as GLD or IAU, is better than owning physical gold since shares in these ETFs offer high liquidity and trade at a slight discount. In reality, of course, the discount is priced in for valid reasons.

Owning Gold With an IRA

Many investors are understandably cautious about owning gold with an IRA. After all, there are many laws related to IRA and 401(k) accounts that can have very serious consequences for investors who do not mean to do anything wrong. It is not uncommon for both investors and brokers to regularly experience severe legal challenges when relatively small mistakes are made.

The good news, however, is that buying gold with an IRA is completely legal as long as the right steps are taken. You cannot simply move your IRA funds into a bank account and then head down to a local gold dealer. However, you can purchase physical gold with the help of a licensed trustee who specializes in helping investors to purchase gold.

Owning Gold With an IRA

The Taxpayer Relief Act of 1997 legalized IRA investors owning certain collectibles and precious metals. Under the provisions of the act, investors can own physical gold as long as it is held by a third-party provider. The gold has to be held in a secure facility that has been explicitly authorized by the IRS.

Other limitations under the act restrict investors to owning specific types of gold assets that have been authorized by the IRS. Mostly, the IRS only allows investors to own gold coins that were minted by major monetary authorities, such as the Perth Mint or the U.S. Mint.

Additionally, investors should keep in mind that they have to purchase their gold from a third party that is not the trustee on their account. However, the law makes trustees responsible for transporting and storing gold held by investors. The logistics of buying gold can, therefore, become complex in some situations.

Factors to Consider When Investing in Gold

Buying gold is very different than many other types of investments available in the marketplace. Physical gold has to be transferred long distances to reach a buyer, and this factor leads to costs, delays, and potential risks. The restrictions the IRS places on trading physical gold also introduce complications that can be problematic for some investors.

Factors to Consider When Investing in Gold


The first factor investors should keep in mind is how easily physical gold can be traded. There are fewer buyers in the market for physical gold, so the process of liquidating gold can take several days. Further delays can occur because of check clearing time or the time required to send gold to another facility.

When buying a specific gold asset, it is important to consider the level of demand in the marketplace for that asset. If the asset is highly sought by investors, it will be easier to sell. On the other hand, niche gold products can take much longer to find a buyer for.

Additionally, keep in mind that some trustees or dealers offer guaranteed buyback programs. Therefore, you can sell your gold instantly to take advantage of swings in price or volatility.


When you do not physically possess your gold, there is always the possibility of frauds occurring. Some gold dealers have a bad reputation, so owning physical gold can entail additional risks.

The IRS requires gold investors to rely on separate parties for the purchase and storage of gold to limit the possibility of frauds occurring. This law helps to protect investors, but it should not be seen as bulletproof insurance. There have been instances of gold dealers conspiring with trustees to steal assets owned by investors.

As a result, it is important to rely on established parties who have a good reputation to uphold. Additionally, you should look for trustees who regularly undergo audits. Some providers will even allow you to tour their storage sites to verify that your gold exists.


Trading physical gold can entail high shipping and storage fees. When you buy gold, it is important to carefully read disclosures to ensure that fees are fair. Some providers charge investors hidden fees.

Additionally, you should make sure that fees are reasonable. Gold is very valuable, so it has to be transferred using armored vehicles. Nevertheless, the cost of security and armored vehicles does not justify the exorbitant shipping fees that many providers attempt to pass on to their customers.

Some providers also attempt to charge extraordinary rates for gold storage. It is true that secure facilities are expensive to build, and they have to be staffed by a team of trained guards. Nevertheless, paying annual fees that amount to over 2 percent will eat away at your wealth over time.

Reasons for Ownership

Not everyone should own physical gold. Investors who merely want to take advantage of gold's stability could benefit from using simple ETFs or gold certificates. EFTs are easily sold, and they can usually be liquidated in a matter of seconds.

Additionally, investors should keep in mind the limitations that the IRS places on owning physical gold. If you want to own gold in case of an economic collapse, you might want to possess it in your own home. Investors may not be able to recover their gold immediately in the event of a catastrophic economic collapse, so some investors may want to consider using non-IRA funds to purchase physical gold that can be held in their own homes.

Choosing a Gold Provider

The IRS has authorized hundreds of trustees and dealers across the country. Therefore, investors have many options when looking to get started with owning gold. Three of the best gold providers are explained in detail below.


Goldco Precious Metals offers a wide variety of precious metals services for IRA investors. The company can help clients to purchase gold from third parties or to sell gold on the open market.

Goldco was founded in 2006 to help investors take advantage of the Taxpayer Relief Act of 1997. The provider is only a broker, so investors have to work with a third party to store Goldco's products. Nevertheless, Goldco can help with the process of rolling over an IRA by referring clients to reliable providers that it regularly uses.

Goldco charges account holders a minimum of $175 per year. Investors with accounts valued in excess of $100,000 are charged a fee of $225 every year. Nevertheless, the company offers relatively reasonable rates when the quality of its services is considered.


  • Goldco has an "A+" rating with the BBB.
  • The company is rapidly growing, and it made the Inc. 5,000 list from 2015 to 2017.
  • Goldco has over a decade of experience helping IRA holders.


  • Accounts can only be opened with a minimum balance of $25,000.
  • Goldco cannot store your gold, so you have to rely on a third party.

Augusta Precious Metals

Augusta Precious Metals has over 50 years of experience helping investors to add gold to their portfolios. This service-oriented provider offers exceptional customer service to help investors add precious metals to their portfolios.

One of the main advantages of Augusta is that the provider can help investors to roll over their IRAs at no cost. However, the company is also willing to work with investors who wish to gain exposure using business assets or personal funds.

If you do not already have an IRA, Augusta can help you to open a new account. The company is also happy to assist with every stage of the process of buying gold, including transferring money, closing out existing accounts, and completing transactions.

Another major advantage of Augusta is that the provider offers 7-day price protection with all purchases. If the price of gold skyrockets after you make a purchase, you will not have to pay any additional fees when your gold is delivered at a time when prices are higher.


  • 7-day price protection prevents investors from losing money or exceeding their account balance.
  • The provider offers a $2,000 bonus in silver when investors make an initial investment.
  • Class III secure facilities are used to keep your gold safe and secure.


  • The minimum opening deposit is $50,000.
  • The storage facilities used by Augusta charge fees that are not stated in advance.

Birch Gold Group

The Birch Gold Group has been in business helping IRA investors to acquire gold for over 20 years. The company can help investors to legally acquire gold, silver, palladium, and platinum.

Birch is ideal for new investors because it has an in-house team that specializes in helping investors to roll over their IRAs. The company can handle the entire process of rolling over an IRA on your behalf. Therefore, you can get started with physical gold more easily and at less cost.

The provider is also beneficial because it does not charge any fees on transfers of over $50,000. As a result, you can add gold to your portfolio at less cost.


  • The provider offers exceptional customer service.
  • No fees are charged on transfers of over $50,000.
  • Birch has outstanding ratings from consumer advocacy groups.


  • Many investors do not want to allocate $50,000 toward physical gold, so you may have to pay extra fees.
  • Birch's website mentions setup fees and annual fees without stating the cost of these fees.