Category: 401k-vs-ira

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.

Gold IRA and 401k Accounts: Protecting Your Wealth

Are you thinking about investing in a Gold IRA?  Then you might consider the fact that your wealth could have multiplied since the 70’s.

Gold IRAs and other types of investments would have proven to be a very smart asset during the last half of the twentieth century.  In fact, those who had owned about $20,000 to $30,000 in gold during the 1970’s would be sitting on over $500,000 after all the economic upsets in past years.  In the face of inflation, deflation, wars, and other crises, gold remained strong.  Also, for the wealthy, it is something they transition to when it seems as if hard economic woes are coming around the corner.

A simple economic principle is that when something is being bought in vast quantities, the price goes up.  You might find it interesting to know that the price of gold is on the rise, yet again.  So what does that say about our current economic situation and the future fate of the US Dollar?

Gold IRAs and the IRS

That is one reason why investing in a Gold IRA or 401k may be a smart call, especially if you already have a pretty hefty retirement fund built already.  One of the main factors that make up a Gold IRA is this: A Gold IRA is a fund that is not subject to IRS penalty until the actual value is transferred to the recipient.

How your Gold IRA works is that when you actually make the investment, a third party (usually some kind of investment broker) will hold on to the gold for you as you continue to invest.  This means that the IRS will not be able to hold you liable for the gains of that investment, and it is not considered “income”.  Then, when you are ready to liquidate your gold assets, you can take possession of that value.  So, instead of paying multiple times to the IRS for the value of those capital gains, you only pay them when you are realizing the Gold IRA assets.

Also, it is rather easy to roll over your existing IRA of 401k to a Gold IRA.  The entire process will take anywhere from five to thirty days, and it is 100% tax-free.  You will not have to pay a dime until you are ready to liquidate those assets and begin your retirement


Considering a Gold IRA for investing your wealth will keep you from economic turbulence and even the penalties of the IRS.  There are not many investments that provide that kind of protection.

Gold 401k Retirement Plan - A Smart Move

Gold 401k - A Smart Move - Planning for your retirement can never be done early enough, so you should really think about putting aside some money from your income to go into your retirement fund (if you are not already doing it). And the best way for you to ensure that you really do have a retirement that you can really look forward to is to rollover your 401k into gold.

A lot of investors are now converting their normal 401k plans and converting almost all, if not all of their retirement fund into tangible gold. But why is it said that investing in gold for your retirement is a good idea, and should you partake of this popular trend as well? In this article, you will learn about gold investments and how they are changing the face of retirement funds and how you can take advantage of it yourself.

Why is Gold 401k Better?

There are lots of valid reasons why investing in gold is a wise choice, and the main reason is that the price of gold is a lot more stable than that of paper currency. You may have noticed that these days that the spending power of the dollar is beginning to decline, this is all thanks to inflation. The recent financial crisis left an indelible mark on the US economy (and many economy’s around the world), and with that comes inflation, or the lowering of the value of currency. Inflation will also affect the money that you have saved up, this includes your 401k; so if this downward spiral continues, your money will be worth far less than what it is right now. The little nest egg you have been working hard to build up may not end up being as big as you had hoped.

But if you invested in gold for your 401k, then the story would be a lot different. Unlike paper currency, whose value depends on the strength of the country’s economy to back it up, gold retains its value regardless of wherever you are. Whether you live on the US or in other parts of the world, the price of gold will pretty much remain the same, thanks to an international standard on gold prices; this makes gold and other precious metals almost inflation-proof, and thus a wise investment.

Another advantage of using gold in your 401k is that they are easily liquidated in any part of the world. Gold is considered as a precious commodity in almost all countries in the world, so trading them in for local currency will not be much of a problem.

Some Disadvantages of A Gold 401k

Though everything may seem great, there are some risks involved in investing in gold that you need to be aware of. For one thing, if you are looking to make a huge profit from investing your 401k in gold, then you will be disappointed. The price of gold is rising, that’s a fact, but it is a long term investment. So after a couple of years, your profit from your gold will not be that large, but over many years, it could be substantial. But anyway, the real reason why you should look to invest in gold in the first place is because you want security for your retirement funds.

The price of gold, just like any other commodity, it tends to rise and fall depending on the demand for it; yes there are times when the value of gold will fall, but over time it will only rise again. The trend these days show that the price of gold is increasing (as it has done in the past 10 years); and analysts predict that this trend will continue for years to come. So, if you are planning to buy gold for your retirement, now is probably the best time to do it.

If you want to make your 401k expand, then you should place it in an aggressive portfolio; this move may be high-risk, but it will make you more money than investing it in gold, though you should be prepared to lose your money as well. If you want some balance in your 401k, do what other people are doing and invest a part of your money in gold and leave the others to regular investments.

Gold 401k: How to Start Investing in Gold

If you are a new at investing in gold, then you should first look to gold bullion coins. There are numerous types of gold bullion coins out there for you to choose from, among the most prized are the American Golden Eagle, the Canadian Maple Leaf and the South African Krugerrand. These coins are especially minted for the purpose of investing, so their value is dependent on the amount of gold. Gold bullion coins are different from gold collectible coins because their value is determined almost solely by the amount of gold content within each coin. Unlike collectibles where they are rare and the beauty of the coin accounts for a large chunk their price, when the demand for such coins diminishes, which sometimes do happen, their value also takes a nosedive, making them quite a risk.

Beginners are usually discouraged from investing in jewelry, primarily because of their high retail value, and their price also depreciates with the passage of time. Coins, on the other hand, are easier to come by and their value does not diminish, especially if they are well-looked after.

If you want to keep your retirement funds safe, then you should consider trading them in for tangible gold. If you want to make sure that you have more than enough money by the time that you retire, placing them all in gold is the best move that you can make. You no longer have to worry about getting your retirement money once you reach a ripe old age only to find out that your fund is nowhere near what you had expected.

There is one thing that you get from gold that you cannot get from other forms of investment, and that is security and peace of mind, and for some people that is worth more than money.

References: IRA FAQs - Investments - Internal Revenue Service

Downsides Of A Traditional 401k

You may think that since you already have a traditional 401k from your employer that you already have it made for when you retire. The truth is there are some things that you do not know about your 401k that your bosses are not telling you, and if you want to change things it is best that you explore other retirement options besides it. In this article, you will learn about the downsides of a traditional 401k that your company has conveniently forgotten to tell you (or probably didn’t even know about!).

The first downside of a 401k plan is that there are very limited investment options open to you. The usual choices that are available are stocks, bonds, and mutual funds, that’s it; and the worst part is that you do not even have any control on which of those options you should place your money in, they are all up to your employer.

A traditional 401k is good for your employer

Since the investment choices are left to your employer, there is a high chance that your money will go to investments that will greatly benefit the company, rather than being the best option for you. Using a 401k means that you are giving free rein to your employer to make themselves richer, while giving you the bare minimum for your retirement. If you want your retirement to be more financially secure, then you should explore other alternatives out there.

Limited access to your money is also a big problem of 401k plans. You are not allowed to withdraw your savings from your 401k plan without incurring a ten percent penalty; it’s like you have to pay a fine just for taking back money that belongs to you in the first place. This is the biggest reason why many people rollover their 401k to a Roth IRA, Gold IRA, and other self directed retirement funds.

If you want to take back control of your retirement fund, the best option that you have right now is to place it in a gold IRA. Unlike traditional retirement plans that are based on paper currency, gold IRAs are backed by actual physical gold; and this makes it better at preserving the value of your money.

Best 401k Plans

Gold has a very distinct characteristic of being resistant to the effects of inflation, so you can be sure that the amount of money that you place into it is extremely likely to at least stay the same even after many years have passed. Doing a rollover to a gold IRA from your traditional 401k is actually very easy, and pain-free because there are no additional fees that you will incur; especially if you use a reputable company.

So even though there are certain benefits to having a traditional 401k, it is the disadvantages that they have that really makes people want to look for something a little more substantial. If you want to make your money work for you instead of your employer, then you should seriously consider rolling over to a different retirement plan, like a gold IRA; it’s your money, so you should be the one deciding on how you use it.

References: IRA FAQs - Investments - Internal Revenue Service