How can I convert my 401k to gold?
We get a number of people asking how to convert part of their 401k to gold through a “gold 401k rollover”
So you currently have a 401K plan. What happens if you decide you’d like to convert some of this to physical gold – such as coins.
Can this part conversion of your 401k be done without incurring a penalty? How would do you go about this?Answer: It is most likely that you can’t.
However – if it happens that you’re no longer employed by the company where you set up your 401(k), it’s possible to roll the assets into a roll-over IRA – and in using a Gold IRA, you can opt to invest in gold futures or certain types of physical gold coins.
This type of gold investment does not not include gold collectibles, or non-US coins.
There are companies specializing in gold 401k rollovers, all reviewed in our Gold Dealer Reviews – who can advise on all the details of this type of transaction for free – as well as optionally carrying out the rollover itself.
Our 2013 winner Regal Assets (reviewed here) pride themselves on taking the hassle out of converting a portion of your Individual Retirement Account (IRA) or former 401K into physical Gold and Silver, as well as selling other IRS approved precious metals such as platinum and palladium, making it simple to add these to your retirement portfolio.
(see Gold IRA FAQ for full details)
What Coins Can Be Held in a Gold Retirement Plan?
For the time being the US government only allows certain types of gold bullion and proof coins to be held within an IRA for use in retirement plans, or Gold IRA . The prescribed bullion and gold coin investments allowed within a gold IRA are:
- American Eagle coins
- Australian Kangaroo/Nugget coins
- Austrian Philharmonic
- Canadian Maple Leaf coins
- Credit Suisse gold – PAMP Suisse gold Bars .999
- U.S. Buffalo Gold Uncirculated coins (No Proofs)
Note that the minimum finenesses for bars are .995+
How do Gold 401k rollover IRAs perform?
Looking at recent history, the performance of gold IRA’s even since the millenium has overtaken virtually all other asset types that can be held in a retirement account.
Had you started with an initial investment of $25,000 in 2000, it would have grown to $26,853 by 2002, in a further 2 years to $40,817, it would have passed $50,000 in 2006, and have reached $74,777 in 2007.
Going further back, if you had bought $25,000 of gold bullion coins early in the 1970s and had managed to hold onto it throughout the oil crisis, U.S. dollar deflation, national inflation, the banking crisis and surrounding scandals, the resulting recession, 911, and the popping of the real estate bubble, your gold would be worth in excess of $500,000.
Had you opted to put your $25,000 into limited mintage investor gold coins rather than bullion, you’d be looking to sell that gold today for more than $1,250,000!
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Author's Disclaimer: Buying physical gold is not regulated by the Financial Services Authority (FSA). For the benefit of doubt, I am not a Financial Advisor or fund manager nor do I give financial advice. The information contained in this article is for "informational purposes" only, and does not replace professional, regulated advice. I encourage you to do your own research before buying gold or silver, and to always seek out professional advice from an experienced Financial Adviser.