Can I Invest in Gold With My 401(k)?

401k investing in gold

Millions of Americans invest for their retirement through workplace-sponsored 401(k) retirement savings plans. The 401(k) has largely replaced the pension plans that used to exist among private enterprise, placing more of the onus on employees to save for their own retirement.

While many American workers have access to quality 401(k) plans, with numerous savings and investment options, many others find that their choices are limited. And many of them wish for more variety and better selection among their retirement savings options.

A common question that some investors have is, “Can I invest in gold with my 401(k)?” While the short answer is no, a more nuanced look at 401(k) investment options returns a qualified yes. If you have 401(k) assets that you’re looking to invest in gold, read on to learn how you can do it.

What 401(k) Plans Invest In

Most 401(k) plans offer their investors a range of investment options, although those investment options are largely restricted to various funds, be it mutual funds, exchange-traded funds, or index funds. If you’re lucky, your 401(k) plan may offer you some exposure to gold through investments in various gold ETFs or funds that invest in gold mining stocks. But those have their drawbacks.

With an ETF, for instance, you don’t actually own gold, just shares in a fund that claims to own gold. You can’t ever take physical delivery of that gold. Nor do you know who actually holds the gold that the fund claims to own.

The fund may also create more shares than it has gold backing, thus inflating the number of shares and leading to a split between physical gold and “paper” gold. And because of the numerous management fees, listing fees, and other fees on ETFs, you’ll never gain the full benefits of any gold price increases.

Mining stocks have the same problems as other stocks. Just because gold is high in price and rising doesn’t mean that mining companies are well run. A poorly run company, a company with poor mine production, or a company beset by labor disputes or political disputes in the countries in which it operates could very well see its stock price underperform even when gold prices shoot through the roof.

For federal government employees who invest through the Thrift Savings Plan (TSP), there have been proposals to set up a precious metals TSP fund, such as the proposal from former Congressman Ron Paul in 2011. That would have allowed TSP participants to invest in a fund that owned gold, silver, and platinum bullion.

Unfortunately, that proposal never went anywhere. The moral of the story then is that if you have 401(k) assets and want to invest them in gold, you’ll have to look elsewhere.

401(k) Rollover

What many 401(k) investors do to invest in gold is to roll over their 401(k) assets into a gold IRA. A gold IRA is just like any other IRA, only that it invests in physical gold coins or bars. You as the investor decide which gold coins or bars to purchase, and those gold coins or bars are stored by your IRA custodian at a precious metals depository.

The 401(k) to IRA rollover allows you to use the tax-advantaged assets you’ve already accumulated and put them to use without incurring any taxes or penalties. As long as you fulfill the IRS requirements for rollovers, your assets can move seamlessly from your 401(k) into your gold IRA. And once your funds are in a gold IRA, they retain the same tax advantages as any other IRA account and are subject to the same rules as any other IRA account.

When it comes time to take a distribution from your gold IRA, you can choose to take your distribution in cash or in physical metal. That allows you to continue owning and holding gold so that you can benefit from precious metals ownership even after you are no longer allowed to contribute to a 401(k) or IRA.

In some circumstances you can even move funds back from a gold IRA into a 401(k) account. And you can also transfer assets from a gold IRA into another IRA. In this sense, a gold IRA is just another tool in your investment toolbox, allowing you to diversify your assets, adjust your risk exposure, and hedge against inflation or economic uncertainty.

Making the Move to a Gold IRA

A 401(k) to IRA rollover doesn’t have to be difficult, as long as you know what you’re doing and work with trusted partners. Goldco has years of experience helping thousands of customers just like you move their assets from 401(k), 403(b), TSP, and similar accounts into a gold IRA. Our helpful and experienced professionals can answer your questions about how rollovers operate and can help you navigate the rollover process.

Goldco also works with gold IRA custodians, bullion depositories, and mints around the world to provide you with the products and services that can get your gold IRA off the ground. From quality and authentic investment-grade gold coins and bars, custodial services, and gold storage, Goldco’s precious metals experts can help you determine which products and services best meet your needs.

But don’t take our word for it. Just look at the hundreds of reviews from our satisfied customers. We work hard to make sure that our customers are happy with their gold purchases, and we go the extra mile to ensure that your hard-earned savings are well protected with gold. So if you have retirement savings in a 401(k) or similar account that you want to start investing in gold, call Goldco today to get started.

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