How to Roll Over a 401(k) to a Gold IRA

To move a 401(k) into a Gold IRA, open a self-directed IRA with a custodian, then ask your 401(k) plan to send the money straight to that custodian in a direct rollover. The IRS says no tax is withheld on a direct rollover. Once the funds arrive, the custodian buys IRA-eligible gold and a depository holds it. Taking a check yourself starts a 60-day clock and 20% withholding.

Three ways to move the money

The IRS treats these as different events, with different rules and different paperwork.

Direct rollover

Your plan administrator sends the money to your new IRA custodian, usually by check or wire made out to the custodian for your benefit. IRS Tax Topic 413 says mandatory withholding doesn't apply to a direct rollover. The plan reports it on Form 1099-R with distribution code G, and the IRS instructions show a taxable amount of zero.

Trustee-to-trustee transfer

If the money is already in an IRA, your current IRA custodian sends it to the new one. The IRS says this type of transfer isn't a rollover, so the one-rollover-per-year limit doesn't apply. The IRS instructions also say a transfer between trustees that involves no payment to you generally isn't reported on Form 1099-R.

60-day indirect rollover

The plan pays you, and you deposit the money into the new IRA yourself. The IRS gives you 60 days from the date you receive it. From an employer plan like a 401(k), the payment is subject to mandatory 20% withholding even if you plan to roll it over.

How the 20% withholding works

Here is a hypothetical $100,000 pre-tax 401(k) paid out by check:

1. The plan withholds 20%, or $20,000, and sends you $80,000.
2. To roll over the full $100,000, Topic 413 says you have to add funds from other sources equal to the amount withheld. So you deposit the $80,000 plus $20,000 of your own money within 60 days.
3. If you deposit only the $80,000, the $20,000 you didn't roll over counts as income for that year. If you are under 59½, the IRS says it may also face the 10% additional tax on early distributions.

A direct rollover avoids all of this, which is why it is the usual route for a 401(k).

The one-rollover-per-12-months rule

The IRS says you can make only one rollover from an IRA to another IRA, or back into the same one, in any 12-month period. The limit counts all your IRAs together, Traditional and Roth.

That aggregate reading comes from a 2014 Tax Court case, Bobrow v. Commissioner, and the IRS began applying it to IRA distributions received on or after January 1, 2015, according to the Journal of Accountancy. Trustee-to-trustee transfers, rollovers between employer plans and IRAs, and Traditional-to-Roth conversions are exempt. A 401(k) to Gold IRA direct rollover doesn't use up your one rollover. A second IRA-to-IRA check within 12 months is where people get caught.

Can you roll over a 401(k) while still employed?

That depends on your plan, because the IRS 401(k) guide says elective deferrals generally can't be paid out until a distributable event: you leave the job, reach age 59½, die or become disabled, face a hardship, or the plan terminates without a successor plan. So a 401(k) at a former employer can usually be rolled over. With a current employer, you need what plans call an "in-service distribution." Because age 59½ is on the IRS list, some plans let workers that age roll money out, and the plan document sets the terms.

Ask your plan administrator or read your summary plan description. Hardship distributions can't be rolled over, per the IRS guide.

Step by step

1. Confirm the money can move. Check with your plan that you have a distributable event or an in-service option, and ask whether it pays by check or wire.
2. Choose Traditional or Roth. The IRS rollover chart shows pre-tax 401(k) money can go to a Traditional IRA without tax. Rolling it into a Roth IRA is allowed, but you include it in income. Roth 401(k) money goes to a Roth IRA. Our guide to how a Gold IRA works covers the differences.
3. Open the self-directed IRA. The custodian will ask for ID and beneficiaries, and it will give you the exact payee name and delivery instructions for the rollover.
4. Request a direct rollover. Use your plan's distribution form and choose direct rollover, payable to the custodian for your benefit. Avoid a check made out to you.
5. Pick the metal. Once the funds post, you choose coins or bars that meet IRA rules. See IRA-eligible gold, and know that the price is set from the spot price of gold plus a premium.
6. Confirm storage. The custodian arranges storage at a depository it uses. The metal can't be stored at home.
7. Keep the tax forms. In January you get Form 1099-R from the plan showing the rollover. Your IRA custodian files Form 5498, which reports rollover contributions in box 2 and the account's value on December 31 in box 5. Custodians file Form 5498 by May 31 of the following year, or the next business day when that date falls on a weekend or holiday.

Mistakes to avoid

• Letting the plan cut a check to you, then missing the 60-day deadline.
• Depositing only the 80% you received and owing tax on the 20% that was withheld.
• Doing two IRA-to-IRA rollovers within 12 months. Use a trustee-to-trustee transfer instead.
• Buying coins that aren't IRA-eligible, which the IRS treats as a distribution of the purchase price.
• Taking the metal home, which the Tax Court treated as a taxable distribution in McNulty v. Commissioner (2021).
• Missing the costs. The CFTC warns that some gold IRA sellers charge hidden one-time or monthly fees, and it tells consumers to get fees in writing up front. Read our guide to Gold IRA fees before you sign.

Gold prices rise and fall, and you can lose money, so think about how much of your retirement savings you want in one asset. For a printable checklist of these steps, get the free Gold IRA Planning Guide, or contact us with questions.

Frequently asked questions

Is a direct rollover from a 401(k) to a Gold IRA taxable?

Under IRS rules, pre-tax 401(k) money moved by direct rollover into a Traditional Gold IRA is not taxed at the time of the move. The IRS rollover chart allows that move, and Topic 413 says no tax is withheld on a direct rollover. Rolling pre-tax money into a Roth IRA is allowed but taxable.

What is the 60-day rollover rule?

If a plan or IRA pays the money to you, the IRS gives you 60 days from the date you receive it to deposit it in another IRA or eligible plan. Any taxable amount you don't roll over counts as income, and if you are under 59½ it may face the 10% additional tax.

Does a 401(k) to Gold IRA rollover count toward the once-a-year limit?

No. The one-rollover-per-12-months rule applies to IRA-to-IRA rollovers. Rollovers from an employer plan to an IRA and direct trustee-to-trustee transfers don't count toward it.

Can I roll over my 401(k) while I'm still working?

Only if your plan allows an in-service distribution. The IRS says 401(k) deferrals generally can't be paid out until an event such as leaving your job or reaching age 59½. Your plan administrator can tell you what your plan permits.

What tax forms will I get after a Gold IRA rollover?

Your 401(k) plan sends Form 1099-R, which reports a direct rollover with code G. Your Gold IRA custodian files Form 5498, which shows the rollover contribution in box 2 and the account's year-end value in box 5.

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