How To Buy Gold With 401K: All You Need To Know

Many investors find it difficult to resist the allure of precious metals, especially gold. It is one of the most sought-after and popular investments in the world since it has the potential to generate excellent returns in any investment portfolio. 

Gold is often seen as a safe investment and inflation hedge since its price rises when the value of the US dollar lowers.

how to buy gold with 401k

One thing investors should keep in mind is that most 401K retirement plans do not permit direct ownership of actual gold.

However, there are several indirect ways to get your hands on some gold in your 401K. In this article, we have provided all information you need in order to know How To Buy Gold With 401K.

What is a 401K Plan?

A 401K plan is an employer-sponsored self-directed retirement savings plan. Several companies provide these tax-advantaged investment plans. Millions of Americans rely on them to help them live out their retirement years comfortably.

People can invest a percentage of their pretax earnings in long-term investments. Along with many employers matching partial or even full employee contributions to the plan.

For example, if an individual contributes $100 per paycheck to their 401K. An employer that matches 100% will add another $100 to their account.

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The Internal Revenue Service (IRS) sets contribution limits for plans. Employees, for example, are permitted to contribute $20,500 of their salary to a 401K in 2022. Anyone 50 and older can additionally make catch-up contributions of up to $6,500 to their plan in 2022.

These plans are often managed by a fund manager or a financial services firm. Companies typically provide a variety of investment options for employees to diversify their investments. They typically offer through a selection of mutual funds. 

Enrollees can choose from a choice of funds, including small- and large-cap funds, bond funds, and index funds. Each with a different growth potential.

Because these plans are vital, enrollees can take advantage of significant market opportunities. As a result, investors may be interested in transferring a portion of their 401K investment portfolio assets to profit.

Understanding Gold Investing & How To Buy Gold With 401K

Investing directly in gold is one of the finest methods to ride the gold surge. However, there is a catch regarding 401Ks: very few plans enable investors to invest directly in gold bullion. In fact, most 401K plans forbid individuals from directly investing in precious metals.

how to buy gold with 401k

This implies you won’t be able to add gold bullion or gold coins to your retirement plan portfolio. But don’t be discouraged since all is not lost.

There are still opportunities for those who want to put their money into gold. Through mutual funds or exchange-traded funds (ETFs), you may still be able to invest in gold.

Gold Mutual Funds

If you are unable to invest in physical gold, you can do this by investing in mutual funds.

Investors can locate one or more possible mutual funds that give significant exposure to gold by owning equities of companies. Which involved the gold mining industry by reviewing the fund descriptions provided with their 401(k) plans.

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When investing in a mutual fund, consider the fee ratio. High expense ratios can drastically reduce a fund’s profitability.

Fidelity Investments, for example, offers the Fidelity Select Gold Fund (FSAGX). This is a low-cost, value-oriented actively managed fund. Barrick Gold, Newmont Corporation, Franco-Nevada, and Agnico Eagle Mines are among the firms in which the fund is heavily involved.

Gold ETFs

A 401K plan that includes a brokerage option allows individuals to invest in a far broader range of assets through a conventional brokerage account. Which gives them access to all forms of gold investments. 

Investing in exchange-traded funds (ETFs) is one of the simplest ways for employees to gain exposure to gold.

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ETFs allow investors to buy shares of a fund that owns actual gold bullion.

Employees who participate in a 401K with a brokerage option can also invest in individual stocks of gold industry enterprises.

How To Buy Gold With 401K: Can You Use 401K to Buy Gold?

When it comes to asset selection, employer-sponsored 401Ks are limited. Depending on how the company has set up your plan, the money in your 401K can only be used to purchase specific quantities. It also includes types of assets, which are frequently of doubtful value.

Employer-sponsored 401Ks provide a selection of pre-selected stocks, mutual funds, and bonds. Along with an emphasis on investing in the company’s own equities. However, because these are primarily paper assets, they are subject to various risks. 

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Employees may lose a major amount of their retirement savings. If their employer encourages them to invest in company stock but later goes bankrupt. Even if you diversify, your 401K’s other paper assets are likely to be subject to the same ongoing market volatility.

Gold, of course, is not subject to the whims of any single firm or even the world market. It is a present and future asset that can contribute to financial security. Regardless of what happens to other assets in your retirement account.

You must find another way to diversify your retirement account into precious metals. When an employer-sponsored 401K plan will not allow you to invest in actual gold.

This is accomplished through a rollover process in which an IRA specialist company first assists you in setting up a Precious Metals IRA. Then transfers cash from your 401K into your new account. You can then learn How To Buy Gold With 401K while receiving the benefits of a tax-deferred retirement plan.

Check out the best gold IRA companies of 2023 and learn how you can save your investments.

How to Buy Gold With 401K?

To buy gold with your 401K assets, you must first open a Precious Metals IRA. Precious metals specialists will guide you through the procedure and make the transition as simple as possible. They require a competent custodian to manage the tasks of the retirement account on your behalf. 

We’ve simplified the process of buying gold with a 401(k) into three steps:

1. Examining the Account to Ensure Eligibility-

IRA Specialists will examine your 401K to determine whether you are eligible to roll the funds over and will also assist you with any necessary paperwork. They make every effort to thoroughly address any inquiries you may have. 

2. Opening a Precious Metals IRA and Transferring 401K Funds into it-

Once you’ve determined your eligibility and the amount you want to transfer, it’s time to open your self-directed individual retirement account with a custodian. Assuming your current 401K is eligible for a rollover, transferring funds from one account to another will result in no taxes or penalties.

3. Purchase of gold and other precious metals.

Once your Precious Metals IRA is up and running and funded with 401K funds, it’s time to select the precious metals you want to buy. Your Precious Metals Specialist will inform you of the differences between the metals and assist you in making the best decision based on your needs, desires, and situation. 

There are numerous qualified custodians who will also handle the logistics, and once your transaction is complete, your metals will be stored in a licensed depository.

How to Buy Gold With 401K: What are the Contribution Limits for a 401K?

Every year, the IRS changes the contribution limitations for 401Ks (and maybe other retirement vehicles) for the following year. This may result in changes and it did, as of November 2021.

In 2021, the IRS made many significant changes to the 401K contribution limitations for the 2022 tax year.

  • For employees—  The Individual employees had a contribution limit of $19,500 in 2021, which was raised to $20,500 in 2022. If an employee has several 401K accounts, this contribution limit applies to the total contributions made across all accounts and includes both regular and after-tax contributions to Roth 401K accounts.
  • For employers— Employers’ contribution limits are calculated together with employee contributions. This combined contribution ceiling for 2021 is $58,000, with a catch-up contribution limit of $64,500. The combined contribution limit for 2022 is $61,000, with a catch-up contribution eligibility limit of $67,500
  • Catch-up contributions— Employees 50 and older can make additional contributions to their 401K to accelerate their savings. The catch-up contribution ceiling in 2021 is $6,500. The catch-up contribution ceiling will continue at $6,500 in 2022.

When you work with a Precious Metals Specialist to analyze your existing retirement accounts and decide which ones to roll over or transfer into your SDIRA, they will assist you in determining which ones are eligible to be moved.

How To Buy Gold With 401K: Why Should You Invest in Gold for Retirement?

Assets and currencies come and go, but precious metals are here for the long term. When you start a Precious Metals IRA, you gain access to various advantages, not the least of which is a more diverse future.

Gold, like other precious metals, has a limited quantity, which is why the US government historically used it to determine the value of the dollar. 

Long before they had the concept, gold, and silver were used as cash and to make precious goods such as excellent jewelry; little has changed since then. Gold and silver will continue to be very valuable assets in a decade or five years; can you say the same for equities, bonds, and fiat currencies?

Diversification and risk management

When you start a Precious Metals IRA, you can include various mainstream and alternative assets in it, as well as rollover an existing IRA. As these other assets fluctuate, gold will remain as a hedge that can help safeguard your retirement from market collapses, global crises, and any other economic malady that may develop.


Money printing has reached unparalleled heights since the gold standard was abandoned. Governments can print as much money as they want, debasing their currencies in the process. As prices rise, the purchasing power of each dollar in your 401(k) decreases gradually. A Gold IRA could protect you from this effect, preventing wealth erosion regardless of what the latest Federal Reserve chairman says.

Tax advantages

After completing the paperwork with a legitimate custodian, you’ll have a self-directed IRA with all the retirement benefits. we’ve come to like, such as tax-deferred growth.

How can you keep Gold Safe in your 401K?

Working with experienced, trusted individuals who have a track record of sticking to financial laws and regulations is essential in order to preserve your retirement assets.

A self-directed IRA allows you to invest in any assets you like, whether they are gold equities, actual gold, mutual funds, futures, or options. As a result, if precious metals are part of your portfolio objectives, this may be your best alternative.

A retirement savings plan to IRA rollover is a frequent practice often done when you change careers and want to secure your 401K. However, if you intend to invest in gold, you can do the same. 

If you are still working in a company that offers a retirement savings plan, you should consider in-service withdrawal for quick access to your funds. In three months or 60 days, you can move your fund without penalty into a gold IRA or exchange plan, giving you the entire control over what has normally locked away until later.


Though 401K plans do not allow for direct investments in gold, there are still numerous other options that exist to include gold exposure in your portfolio. 

We hope this article was useful in providing all of the information you need to know about How To Buy Gold With 401K. Investing in mutual funds that contain gold firms is one option. You can also roll over your 401K into a self-directed IRA under certain conditions, where you can invest directly in gold bullion and coins.

Personally, I recommend checking out our top gold IRA providers.

They have dedicated teams of experts who can help you kickstart your investing journey with ease.