Gold IRA Rollover From Your 401k

Last Updated on 17th June 2022 by Jeffrey Camerda

Gold IRA Rollover From Your 401k

How do you roll over a 401k into a Gold IRA? Firstly you need to open a Self Directed Gold IRA. Then you need to rollover your funds from your 401k into your new IRA. You must engage a custodian to create and manage your new self directed Gold IRA. They will also assist you in the rollover of funds from the 401k and the purchasing of gold.

mobile phone on a deskHow to Open a Self Directed Gold IRA

To rollover from a 401k to a gold IRA, the first thing you need to do is open up a new Self Directed Gold IRA account. By law, you need to use a custodian to manage to IRA for you.

Do a little research and identify an IRA custodian that specializes in investing in gold and precious metals that is right for you. See below for some tips on how to choose the right custodian. There is a wide range of self-directed IRA custodians out there. You need to choose one that has the experience and a proven track record in managing gold IRA investments.

Once you have selected your custodian to go to their website and access their set up package. The setup process will be straight forward. All these companies want your business and therefore strive to make the account set up as easy and stress-free as possible.

The process of opening a new gold IRA may vary slightly from one custodian to the next but in general, you will have to complete the following documents to set up the account:

  • Account Application Form & Plan Document – this document captures your name, address, social security number & beneficiary information, and begins the process of having your new account created.
  • Fee Schedule – a breakdown of custodian fees for managing the account, must be signed by the account holder to show you are aware of what the fees are and how they will apply to your account
  • Account Holder Disclosure & Hold Harmless – explains the responsibilities of the account holder and the custodian
  • Transfer Funds Document – use this to provide instructions to transfer 401k funds into your new IRA
  • Government-Issued ID – some form of government ID will be required, such as a driver’s license/passport to verify identity, a LexisNexis check will be run on your identity to confirm integrity.
  • The direction of Investment – when all is set up, and your funds are in your new IRA, use this form to instruct your secure custodian to invest your IRA funds in gold

investing in physical goldRolling Over from a 401k to a Gold IRA

Once the IRA is set up the next step is to get your funds transferred over from your 401k plan into your new gold IRA. There are two ways of doing this. The transfer can take place by ‘Direct Rollover’ or ‘Indirect Rollover’ – you decide.

Direct Rollover – means the funds move directly from your 401k to your new IRA without passing through your hands. To to do this – you need to inform the administrator of your old 401k plan that you want to do a ‘direct rollover’ of your funds into your new self directed gold IRA. They’ll send out some paperwork for you to complete and the funds will move directly from the 401k to the new self-directed IRA as instructed.

Indirect Rollover – means that you instruct the administrator of your 401k to issue you a check to the value of the account. This check is then sent directly to you and you have 60 days to deposit it into the account of your new self directed IRA. If you fail to deposit into the new IRA within the 60 days there are some serious tax implications – see below. Therefore, it may be a better idea to go the route of a direct rollover to avoid any complications.


gold and silver coins on a tableWhat is a Gold IRA Rollover Kit?

When reviewing Gold IRA custodians and considering your options you will often hear the term ‘Gold IRA Roll Over Kit’. Put simply, this kit is a set of documents and paperwork that you will need to convert your 401k into a gold IRA. The kit will include all the application forms needed to get the process started as outlined above.

A good kit will also include pertinent reading material such as guides on how a gold IRA works and tips on investment strategies when investing in precious metals. Each gold IRA custodian will offer their own rollover kit. Most kits are free but some companies charge a small fee for sending them out.

In addition to application forms, typical kits include information about the custodian, products, fees and gold / precious metal investment guides. By law, you must engage a custodian to open and manage your account so it’s worth learning as much as you can about the company before you opt to go with them. The custodian will hold the gold on your behalf and ensure all legal and financial obligations are properly taken care of. The best way to choose a good one is to spend some time researching gold IRA custodians and choosing one that best matches your individual needs, see below.

gold and silver coins on a tablePurchasing Gold Using Your IRA

Once your 401k funds have been transferred over you are free to go ahead and begin purchasing gold. You can contact a gold broker directly and hammer out a suitable deal or you can instruct your custodian to do this on your behalf if this is a service they provide.

Complete the ‘direction of investment’ form giving details of the investment you wish to make and your custodian will take it from there. They will contact the gold broker and arrange the investment.

The appropriate funds will leave your IRA account and the gold broker will ship the agreed quantity of gold to a secure depository as directed and managed by your custodian. Actual physical gold will be securely held on your behalf.

Financial industry experts advise that 10% of any individuals assets should be held in gold or other precious metals to protect assets against the effects of an economic crisis.

Gold is an investment that not only holds value, but increases, as traditional asset classes begin to collapse. It is an excellent and proven safe haven that can protect the value of your hard-earned savings in uncertain times.


investing on smart phoneChoosing a Gold IRA Custodian

When it comes to choosing a custodian to manage your gold IRA account it is worth spending some time to make sure you pick the right one. There are a number of factors you need to consider.

As its a Gold IRA you want to open, you should be looking for custodians that specialise in gold investments. You may find a lot of traditional IRA custodians offer gold options, however, if gold is not their forte it is probably best to avoid them.

If gold and other precious metal investing is what you really want to get into you should be running with the experts and gold specialist IRA custodians are the ones you want to go for.

They have a wealth of experience in the precious metal industry and will have specialists on the payroll that have both the experience and knowledge base you are looking for. So go for a specialist gold IRA custodian!

Take a good look at the fee structures on offer. Some fee structures such as a flat fee format will be favourable to large value accounts while fees based on the value of the assets may be better suited to lower value accounts. Each of the custodians out there has structured their fees in different ways so it could be a good idea to do up a spreadsheet and compare the different models available. Assess the fee structure to see if it will suit your IRA fund and work well for you.

Do some background research on the company to make sure they are a legitimate business. Google the company name, check news articles and even consult friends/ family members who may have some experience in the industry.  See our guide to the best precious metal IRA companies 2020, click here.


Direct & Indirect Rollover Tax Implications:

As mentioned above you need to choose between a direct or indirect rollover of funds from your 401k. The direct rollover is the more straight forward option. The funds just move from the 401k straight into the new IRA without you laying a hand on them.

The indirect option involves you receiving a check and then having to deposit it in the IRA within 60 days. If you fail to deposit it within the 60-day window you will be hit with a tax penalty from the IRS. Once the 60 days have elapsed the IRS will class them as a taxable withdrawal.

In addition to this, a 10% early withdrawal penalty will be applied if you are aged 59.5 years or younger. You can see how this is a situation you clearly want to avoid. So, if you opt for an indirect rollover on your 401k it is critical you get the check deposited within those 60 days.

Better still, maybe just go for a direct rollover. Unexpected things happen and you don’t want to be caught holding that check when you realise sixty days have just passed!

For more info on switching a 401k to a gold IRA, see – Regal Assets 401k to Gold IRA in 24hrs.

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Certified Financial Planner at Camarda Wealth Advisory Group | 800-262-1083 | Website

Dr. Jeffery Camerda, PhD, is a financial planner who specializes in wealth management and retirement planning.

With a PhD in Economics and Financial Planning, Jeffery represents the highest level of financial planning expertise and achievement in the USA

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