How To Roll Over A 401(k) To A Gold IRA

Steps

1. Check your plan's rules. Former-employer plans can usually be rolled over. Current-employer plans may allow in-service rollovers only in some cases.
2. Open a self-directed IRA with a custodian. See custodians.
3. Request a direct rollover from your plan administrator to the new custodian.
4. Choose eligible metals once funds arrive. See IRS rules.

Direct Vs Indirect

In an indirect rollover the plan pays you, and you must redeposit the funds within 60 days. Payments from employer plans to you generally have 20% withheld for taxes, which you'd need to replace from other money to avoid a taxable portion. A direct rollover avoids these problems. See rollover vs transfer.

Other Account Types

403(b) and the federal Thrift Savings Plan (TSP) follow similar principles, though each has its own forms and rules. Ask the plan administrator.

Common Mistakes

• Taking a check made out to you.
• Missing the 60-day deadline.
• Rolling pre-tax money to a Roth without planning for the tax. See Roth gold IRA.
• Rolling over everything without considering whether a gold IRA fits.

Which 401(k) Can You Roll Over?

• A former employer's plan: generally eligible for rollover to an IRA at any time.
• A current employer's plan: many plans allow in-service rollovers only after a certain age, often 59 and a half, or in limited cases. The plan document decides.
• 403(b) and 457(b) plans: follow similar principles with their own forms and rules.
• The federal Thrift Savings Plan: has its own withdrawal and transfer procedures, so check them before assuming it works like a private plan.

Pre-Tax And Roth Money

Pre-tax 401(k) money normally rolls into a traditional IRA, and Roth 401(k) money into a Roth IRA, so the tax treatment carries over. Moving pre-tax money into a Roth IRA is a conversion and is taxable. See Roth gold IRAs.

Special Situations To Check First

• Employer stock: special tax rules can apply to company shares in a plan, so talk to a tax professional before rolling them over.
• Outstanding loans: unpaid plan loans can be treated as distributions if not handled properly.
• Surrender charges: annuities inside a plan may have them.

Step By Step

1. Read the plan's rules on rollovers and ask for the rollover form.
2. Open the self-directed IRA and get the receiving custodian's details.
3. Instruct the plan administrator to send funds directly to the new custodian.
4. Confirm the deposit arrived and that the full amount was received.
5. Choose eligible metals only after the funds are in the account.

Questions For Your Plan Administrator

• Do you allow rollovers while I am still employed, and under what conditions?
• Will the check or wire go directly to the new custodian?
• What is your timeline, and is there any fee?
• Is any of my balance in company stock or a loan?

Sources And Further Reading

• IRS: Rollovers of Retirement Plan and IRA Distributions