Rolling over a 401(k) to gold? What to check before you move your money
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TL;DR
- Moving 401(k) funds into gold typically involves rolling eligible retirement money into a self-directed IRA that can hold certain precious metals.
- Ensure your 401(k) funds are eligible for rollover; distributions like required minimums or hardship withdrawals generally cannot be rolled over.
- Understand the rollover process: a direct rollover sends funds to the IRA, avoiding mandatory tax withholdings, while a distribution paid to you has stricter rules and potential tax implications.
- Gold IRAs have specific requirements for acceptable gold products; only certain gold coins and bullion meeting federal guidelines are allowed, and they must be stored by an approved trustee.
- Compare the costs of a gold IRA, which can include setup fees, maintenance, storage, insurance, and dealer markups, against conventional retirement accounts.
- Consider gold's role in your overall retirement plan; physical gold does not generate income and its returns depend on resale value, so determine an appropriate allocation size.