Investing In A Gold 401k

No doubt you have heard and witnessed some of the excitement surrounding gold investments. Surely you have wondered whether it is all sensationalism and hype or whether indeed you should be lending serious thought to safeguarding some of your retirement investment in gold. Below we take a comprehensive look at why you should consider diversifying your retirement investments with gold, how you can do so, and what types of gold (and other precious metals are allowed).

This information will, no doubt help you to make an informed decision about whether balancing your portfolio by keeping some physical assets, such as gold, is the right move for you.

Why You Should Consider A Gold 401K

The top reason to invest in a gold 401k is because gold is a tangible asset that can reduce volatility in your retirement portfolio. Simply stated, gold can help make your investments “safer”; giving you a greater peace of mind. Adding the precious metal to your portfolio can help increase profitability; in some cases strengthening returns without adding risk or by decreasing risk without reducing returns.

Gold has been seen and used for thousands of years as a safe and lasting store of wealth. In these fickle economic times, it has once again emerged as a leading investment and very well may be the ideal retirement asset. Let’s compare gold to the asset classes that most often comprise a retirement portfolio. Stocks, savings accounts, and bonds all depend on the success and performance of another institution or person for their value. Gold on the other hand, does not. This quality alone makes it one of the most ideal assets to hold on to for retirement security.

As was once said by the French president DeGaulle, “[gold] has no nationality … [it] is eternally and universally accepted as an unalterable fiduciary value, par excellence.”

What Is Gold 401k Investing?

There are many ways to invest in the precious metal including obtaining gold coins, bars of gold bullion, holding gold mutual funds, holding shares of gold mining companies, trading gold futures and options, as well as gold exchange traded funds. Gold coins are often seen as very valuable because they can also be collector’s items. Their value comes not only from their weight in gold, but also their rarity.

While obtaining and investing in gold may be simple, 401k gold investing is a bit more complicated. The Tax Payer Relief Act passed in 1997 allows individuals to include precious metals, such as gold, as a part of their retirement portfolios. While it is possible to use a 401k in order to obtain gold investments, you will probably not be able to do so with a traditional 401k account.

Most employer sponsored 401k accounts have restrictions on the types of investment assets, which can be acquired under the account. Therefore, it is usually a requirement that an individual must first convert the current 401k account into a gold 401k. Only then will they be able to begin investing in precious metals such as gold and other precious metals.

As a note, a “gold 401k” is actually a gold IRA account that has been funded by a previous and traditional 401k. The only way to actually physically own gold as an investment is a gold IRA account.