When you’re investing for retirement, you have the time to get things right: You can start investing as soon as possible, use tax-advantaged accounts, and build a diversified portfolio that can withstand market volatility over time.
One thing to consider for a diversified portfolio that’s stable in the long term is a neutral asset like gold. Retirement accounts aren’t only for stocks and bonds — certain types can also hold gold.
However, the IRS has strict rules around how exactly this works; if you want your gold to get the tax advantages of a retirement account, you can’t exactly pack a few gold bars into the car and bring them home.
ETFs and gold miner stocks are options for investing in gold if you aren’t interested in owning physical gold, and you can make those investments in your IRA or 401(k) like any other asset. But if you want to actually possess gold in a retirement account — for example, if you want gold that you can eventually “take with you” in case of global economic instability — you need to open a specialized gold IRA retirement plan.
Gold IRAs like those chosen by Goldco customers are specialty retirement accounts that let you buy physical gold that you can withdraw or sell once it’s time for you to retire. They’re the only way to put physical gold into a tax-advantaged retirement account. When you open a gold IRA, you should expect some basic fees for setup and some annual fees, as well as storage fees and markups on the gold you buy.
You can fund your gold IRA yourself if you have the cash on hand and haven’t hit your annual retirement contribution maximum. Or, you can transfer money from your current retirement account into your gold IRA.
How to buy gold with your IRA
If you’re planning on transferring existing funds into your gold IRA, you have a couple of options for how to move forward.
IRA transfers, sometimes called trustee-to-trustee transfers, are the most straightforward way to transfer your money, but you can only do it between the same types of accounts.
For example, you can transfer funds from your Roth IRA to a Roth gold IRA, or a traditional IRA to a traditional gold IRA. The process itself is pretty straightforward: You open your gold IRA with a company like Goldco, and then you contact your existing IRA custodian to request a transfer.
If you have your money in a 401(k), however, you generally can’t use a trustee-to-trustee transfer to move your money to a gold IRA.
How to buy gold with your 401(k)
You can’t directly buy physical gold with the 401(k) you have through your employer or with a standard retirement account. But you can buy gold with your 401(k) through a couple of methods.
If you’re moving money from a 401(k) or a different type of IRA, then you’ll need to roll over your funds. With a Gold IRA rollover, you’ll move funds from your previous retirement account to your new gold IRA.
There are two types of rollovers: direct and indirect.
Direct rollovers
With a direct rollover, the company holding your existing retirement savings will send funds directly to your gold IRA custodian.
Indirect rollovers
With an indirect rollover, your previous retirement company will send you funds with mandatory tax withholding deducted. You have 60 days to send the full rollover amount to your new gold IRA. If you don’t make that cutoff, you’ll be hit with taxes on the withdrawn amount and any applicable penalties.
Conducting either type of rollover starts the same: Open your gold IRA first, then get in touch with your existing 401(k) custodian to request a rollover. The custodian will typically tell you whether its rollover process is direct (a check written to the gold IRA) or indirect (a check written to you).
A gold IRA rollover shouldn’t incur many additional costs. It’s possible that your 401(k) company could charge you a small exit fee if you’re closing your old 401(k), but if you’re just moving some money, it’s unlikely you’ll be charged.
Once you buy gold for your retirement portfolio, you treat it like any other long-term investment: You leave it alone until you need it.
