401(k) to Gold IRA Rollover: Rules, Steps and Tax Traps

A 401(k) from a job you've left is one of the most common ways people fund a Gold IRA. The money can usually move without tax, as long as it moves the right way. This page covers the former-employer case. For the bigger picture, including IRAs and other plans, see the Gold IRA Rollover Guide.

Can you roll a 401(k) into a Gold IRA?

Generally, yes. A "Gold IRA" is a self-directed IRA whose custodian lets it hold physical precious metals. For tax purposes it's an ordinary Traditional or Roth IRA. The IRS rollover chart shows that pre-tax money in a qualified plan, which the chart says includes 401(k) plans, can roll into a Traditional IRA.

Two conditions sit underneath that "yes":

• The money has to be available to you. For elective deferrals (the money you chose to put in from your paycheck), the IRS says distributions generally happen when you die, become disabled or "otherwise have a severance from employment", when the plan ends without a successor plan, or when you reach 59½ or have a financial hardship (IRS 401(k) resource guide). Leaving the job is usually the trigger for a former-employer 401(k).
• The distribution has to be rollover-eligible. The IRS lists payments that can't be rolled over. These include required minimum distributions, hardship distributions and loans treated as distributions (IRS).

Still working for the employer that sponsors the plan? Whether you can move money out while you're employed depends on your plan's terms. That case has its own page: in-service rollovers.

The same rules apply if the IRA will buy silver instead of gold. A Silver IRA is funded the same way.

Before you roll: what you give up and what you gain

Look at what your current plan offers before you move anything. Some people first check the gold options inside your 401(k). A rollover isn't the only way to get exposure to metals.

Things to weigh:

• The age-55 exception. The IRS chart of exceptions to the 10% additional tax on early distributions lists "Separation from service during or after year employee reaches age 55 (age 50 for public safety employees)". It marks this exception "Yes" for 401(k) and other qualified plans and "No" for IRAs (IRS chart). If you left your job in or after the year you turned 55 and may need the money before 59½, moving it to an IRA can take away that exception for the amount you move.
• Costs. A Gold IRA usually has custodian, storage and dealer costs that are different from a 401(k)'s. Get every fee in writing and compare. See Gold IRA fees and our fee calculator.
• What the account can hold. Inside the IRA, metals must meet IRS rules. The IRS treats an account's purchase of a "collectible" as a distribution equal to its cost. Its exceptions cover certain U.S. coins and bullion "of a certain fineness if a bank or approved non-bank trustee keeps physical possession of it" (IRS). See Gold IRA rules.
• Concentration and price risk. Gold and silver prices can fall as well as rise, and metal pays no interest or dividends.

For a side-by-side look at the two account types, see our Gold IRA vs 401(k) comparison. These trade-offs depend on your age, health, taxes and other savings, so it's worth talking them through with a tax professional or a fee-only fiduciary adviser.

How do you roll over a 401(k) into a Gold IRA?

The cleanest route is a direct rollover. The IRS describes it this way: you "ask your plan administrator to make the payment directly to another retirement plan or to an IRA" (IRS). IRS Publication 590-A says you can choose to have the plan send an eligible rollover distribution straight to your IRA (Pub. 590-A).

If the plan mails a check, it should be made payable to the new custodian for your benefit, not to you personally. Ask both firms how they want it handled.

When a plan reports a direct rollover, the Form 1099-R instructions use code G for a direct rollover to a qualified plan, 403(b), governmental 457(b) or IRA, and code H for a direct rollover from a designated Roth account to a Roth IRA (IRS 1099-R instructions). Seeing a 1099-R for a direct rollover is normal. It doesn't by itself mean you owe tax.

Direct vs indirect rollover: how the 20% withholding works

With an indirect rollover (also called a 60-day rollover), the plan pays you, and you deposit the money into the IRA yourself. The IRS says a retirement plan distribution paid to you "is subject to mandatory withholding of 20%, even if you intend to roll it over later" (IRS). With a direct rollover, the IRS says "No taxes will be withheld from your transfer amount."

Worked example (illustration only)

This follows the IRS's own example on its rollovers page, scaled up.

You're 50, you left your job at 48, and you ask your old 401(k) for a $100,000 distribution paid to you. The plan withholds $20,000 and sends you $80,000.

• If you deposit $100,000 within 60 days (the $80,000 plus $20,000 of your own savings), the whole $100,000 is a nontaxable rollover. The $20,000 withheld is reported as taxes paid on your return for that year, so it counts toward the tax you owe for that year.
• If you deposit only $80,000, you report $80,000 as a nontaxable rollover, $20,000 as taxable income and $20,000 as taxes paid. As in the IRS example, the 10% additional tax on early distributions also applies to the $20,000, unless an exception fits.

In this example the age-55 exception wouldn't help, because you left your job before the year you turned 55. If you'd left in or after the year you turned 55, the IRS chart suggests the 10% additional tax may not apply to the part kept from the 401(k). Ordinary income tax would still apply. Confirm the details with a tax professional.

A rollover isn't subject to the annual IRA contribution limit: the IRS says rollover contributions can be more than that limit (IRS). For more on the deadline, see the 60-day rule.

Can you roll a 401(k) into gold without penalty?

Yes, if it's done correctly. A direct rollover of pre-tax money into a Traditional IRA isn't taxed when it moves. If an indirect rollover is fully deposited within 60 days, that isn't taxed either. The IRS says if you don't roll over your payment, "it will be taxable (other than qualified Roth distributions and any amounts already taxed) and you may also be subject to additional tax unless you're eligible for one of the exceptions to the 10% additional tax on early distributions" (IRS).

There's also a trap after the money arrives. If the IRA buys a coin or bar that isn't covered by the IRS exceptions, the purchase is treated as a distribution of its cost. That can be taxable and, before 59½, the additional tax may apply (IRS). Bullion must also stay with a bank or approved trustee, not at home. See home storage Gold IRAs.

Roth 401(k) and after-tax money

Many 401(k)s hold more than one kind of money. Each kind has its own destination.

Source: IRS rollover chart.

• Roth 401(k) money. The chart allows a designated Roth account to roll into a Roth IRA, not a Traditional IRA. See Roth 401(k) to Gold IRA.
• After-tax (non-Roth) contributions. Under Notice 2014-54, distributions sent to more than one destination at the same time are treated as a single distribution for splitting pre-tax and after-tax amounts. The IRS says pre-tax amounts can go to "a traditional (non-Roth) IRA" and after-tax amounts to "a Roth IRA". It also says you can't take only the after-tax amounts and leave the rest in the plan (IRS). See after-tax 401(k) rollovers.
• Pre-tax money to a Roth IRA is allowed, but the chart says it "Must include in income". That's a Roth conversion, not a tax-free rollover. See Roth conversions.

What if you miss the 60-day deadline?

The IRS may waive the deadline "if you missed the deadline because of circumstances beyond your control" (IRS). There are three routes (IRS waiver FAQs):

• Self-certification. You give the receiving institution the model letter from Rev. Proc. 2016-47. The model letter, as updated by Rev. Proc. 2020-46, lists reasons that include a family member's death, serious illness, incarceration, a postal error, a financial institution's error and a severely damaged home; that update added a distribution made to a state unclaimed property fund. You must deposit the money "as soon as practicable (usually within 30 days)" after the problem ends. The IRS warns it can still decide on audit that you didn't qualify.
• A private letter ruling from the IRS, which has a user fee.
• An automatic waiver in limited cases where a financial institution's error caused the delay.

None of this is needed with a direct rollover, which is why many people avoid the 60-day route.

Common mistakes

• Taking a check made out to you when a direct rollover was available. This triggers 20% withholding.
• Not replacing the withheld 20% in an indirect rollover, which leaves that amount taxable.
• Sending Roth 401(k) money to a Traditional IRA. The rollover chart doesn't allow it.
• Forgetting the age-55 exception before moving money you may need soon.
• Rushing the metal purchase. Pressure to "act now" is a warning sign. See Gold IRA rollover mistakes.

If you have a 403(b) instead, many of these rules are similar. See 403(b) to Gold IRA rollover.

Related questions

How do I move an old 401(k) into gold?

Open a self-directed IRA with a custodian that holds metals. Then ask your old plan for a direct rollover to that custodian. Once the money arrives, buy IRS-eligible metal, which a bank or approved trustee holds for the IRA.

Does the one-rollover-per-year rule apply?

No. The IRS says the one-per-year limit doesn't apply to plan-to-IRA rollovers (IRS).

Do I have to roll over the whole 401(k)?

No. The IRS says you can deposit "all or a portion" of a distribution within 60 days (IRS). Any part you keep is generally taxable. Ask your plan whether it allows partial distributions.

Will I get a tax form?

Yes. The plan reports the distribution on Form 1099-R. A direct rollover is shown with code G (code H for Roth to Roth IRA) (IRS).