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Investing In Gold Through 401k

George Sterling | Wednesday, January 9th, 2013

Investing in gold is possible through a 401k plan, however it is a bit different from how Gold IRA works. Investing in gold through 401k plan is allowed through only few companies, hence it is important for you to find out what your company sponsored 401k plan allows. If your current 401k plan does not allow investing in gold or any other precious metal, it is a good idea to think about a rollover.

401k plan rollover to Gold IRA is not an easy task, but if you put in an extra effort, you can secure a much better tomorrow. The current 401k plan system is not enough for the entire retirement period due to inflation. But when you invest the same money into precious metals such as gold, you will most likely receive better returns because gold always defeats inflation.


There are certain steps you need to take before you can rollover your 401k to Gold IRA. First of all, you need to find yourself a custodian who will deal your transactions. Keep in mind that not all custodians offer investments through an IRA. So before you sign up for an IRA with a custodian, make sure you confirm that the custodian actually permits investing in precious metals.

The rollover process is quite long and tedious because there are certain rules to follow. You can always go through this process quickly, but in doing so you put yourself under the risk of tax penalties and other charges. It is better to consult with a financial manager before you plan a rollover. If you are careful, you can easily avoid tax penalties when you manually withdraw your funds from your current 401k to put in your new IRA.

Certain developments now allow 401k holders to invest through this account. However, the choice of investing in the precious metals if fairly limited compared to Gold IRA. With a 401k you can purchase gold by withdrawing cash or use the funds already inside to buy gold exchange traded funds. It is however highly recommended to invest in gold using a Gold IRA. This is because Gold IRA accounts are managed by custodians. The custodian is responsible for all the transactions that happen in the account but has no rights to sell or purchase precious metals or other potential investment products without your permission.

The gold you purchase through a Gold IRA is kept by a third party depositary. This depositary keeps your physical gold safe until you retire. Upon retiring, the gold is returned to you and from thereon you can decide what to do with it.

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