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How to Move 401K to Gold Without Penalty

How to Move 401K to Gold Without Penalty

July 14, 2023617 view(s)

According to some research, 10.8% of the American population actually owns gold. Even if you don't own gold, you could still invest in some through a ROTH IRA account. 

Keep reading to find out how to move 401k retirement plans into a gold IRA plan so that you can be better set up for retirement. 

Can I Move My 401K?

The first thing you'll need to figure out is if you have an active or eligible 401K. If you are at your current employer and have an account with them, then that is considered an active account, and those accounts are not eligible to roll over to a gold IRA

The IRS is restrictive about how you can move your 401K, and as long as you stay with that employer, your account is considered active. 

You'll have to leave that employer to use them without penalty. However, you may not want to change employers without having another job, due to the current economic conditions. 

If you do have an active 401K and want to move it, you can always take a loan against the account and put that money into a gold account, while also keeping your 401K active. 

401k retirement account gold ira

However, if you do leave your current employer, then this is considered an eligible account, and you can move it over without incurring any penalties or taxes.

If you roll an eligible 401K into your active 401K, that fund then becomes active, and you can't move it over, so you'll want to consider all of your options before moving your money anywhere.

Reasons to Move Your Money Over

Before you move your money over, you may wonder if it's actually a good idea. There are different types of IRAs, and they're great for retirement. 

When you roll your money over, you can choose different types of IRAs. Traditional Roth IRAs are great because you won't have to pay any tax on the capital gains that you accumulate as long as you take it out at retirement age. 

The contributions are not tax-deductible, so you don't get any benefit at the time of making them. However, this is offset by how much capital gains you will get at the end of it as it grows. 


Benefits of Owning Gold

There are also many benefits just to having an investment in gold. For example, it will maintain its value, and it also has low volatility. 

This means that even when the market can rise and lower drastically, gold stays relatively the same. It's more stable, which makes it an excellent option for people who want to use it to retire.

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Since it's not as volatile, it is also a good inflation deterrent. If inflation is higher than usual, stocks can fall, but gold stays at the same price. However, if inflation is normal, gold also doesn't go as high as stocks can, but it does offer some stability, which is important in a retirement account. 

Investing in gold is a good backup plan if the traditional stock market ever collapses. It's a good way to balance your portfolio and protect some of your retirement investments. 

Because gold will maintain its value in the long run, it's also easier to sell and actually get what you paid for it. Typically, you'll see some returns, but it's unlikely that they'll be lower than what you sold them for.

What Is a Gold IRA?

A gold IRA is a special type of IRA that can be invested in gold, but it could actually be invested in any type of metal, like platinum, silver, or palladium

Precious metals are in a self-directed IRA (SDIRA). This means that you're in charge of selecting all the investments you make rather than investing in a mutual fund or exchange-traded fund. 

You can have either a Roth or a Traditional, and it depends if you want to pay tax before or after. With this IRA, you'll get more investment freedom, and you can choose different assets, like gold and silver. 

That's one advantage that IRAs have over a traditional 401K. 


How to Move Without Penalty

After you choose the gold IRA you want, then you'll have to figure out how to buy it without incurring a penalty from your retirement account. 

Your employer probably doesn't offer any current plans with gold as an investment option, so you'll have to look elsewhere. The best way to do this is if you have eligible accounts that you can move over to. 

However, you can also roll over the plan into a new IRA account. Investors will need to get approval, and it could take up to two months to complete the transfer. This is due to regulations from the IRS. 

If the rollover isn't complete by that deadline, the IRS will actually classify it as a withdrawal, and then it'll be subject to any penalties or taxes. You need to ensure that it transfers on time. 

Before you start the rollover, you'll need to make sure you have all of the documentation ready and prepped so that nothing delays the transaction. Keep in mind that fully rolling all of it over can take a few weeks, so you need to plan accordingly. 

gold ira savings account

Learn More About How to Move 401K to Gold Today

These are just a few things to know about how to move 401K to a gold IRA today, but we're here to help with the rest.

We know that choosing the right place to roll your money over can be challenging, but we've got you covered.

Check out our account today and sign up!

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