Can You Buy Physical Gold With Your 401k?

‍While the majority of retirement plans offer some sort of investment option, most are not as flexible as a 401(k). Due to their restrictive nature, many people choose to hold off on investing through their employer. That is where buying physical gold comes in. With this precious metal as your primary investment, you can diversify your portfolio and protect yourself from inflation. To learn more about whether you can buy physical gold with your 401k and other investing basics, keep reading.


What Is A 401(k)?

A 401(k) is a retirement account that allows you to invest your money in various types of investments. In the past, these arrangements were limited to large employers who offered retirement plans. Today, however, many smaller companies are offering similar plans to their employees as well. If you are self-employed or work for a smaller organization, it is likely that you can invest through a 401(k).


You can open a 401(k) with almost any company so long as your employer offers it and meets certain eligibility requirements. Typically, these requirements revolve around the size of the company and how many employees they have. Some employers might even require you to contribute a portion of your salary before opening the account if they do not offer one at all. Once you are enrolled in your plan, you can start investing on your own schedule by using pre-tax dollars (which reduces your taxable income) or by contributing after-tax dollars (which increases your taxable income). Keep reading for more details about this popular retirement option.


What Is A 401(k) Plan?

If you have never heard of a 401(k) plan, you are not alone. These plans were originally created to allow people to save for retirement. In order to qualify for one, you need to be at least age 18 and have been employed by the company for at least one year. You must also make either a certain amount of money (currently $18,000 in 2018) or a certain amount of contributions (currently $5,500). And depending on your employer, you may have other requirements as well.


How Do I Open My 401(k)?

The first step in opening your 401(k) is contacting your employer and asking them if they offer a plan. If so, you can open an account with them. If not, ask if they would be willing to provide information about how their plan works and whether it would be possible for you to open one at some point in the future. Once you have received the information that you need about your company’s plan, contact your financial advisor or call a trusted third-party broker like Betterment and set up an account with them.


Once your account is set up with Betterment or another brokerage firm, it will likely take several days before the funds are available to invest in gold investment accounts. You can also choose to wait until after tax season ends so that all funds are available by the federal tax filing deadline (April 15th). This is a great time to invest in precious metals for retirement.


401(k) Plan Investment Options

Once you have your account established with Betterment or another brokerage firm, you can begin investing in precious metals. Here is a quick overview of what you will find:


1) Precious Metals Fund – This fund is designed to provide an easy way for you to invest in gold and silver. It tracks the price of the SPDR Gold Trust (GLD).


2) Precious Metals ETFs – If you prefer investing in a more diversified portfolio, there are many precious metals ETFs that will give you access to different types of metals and precious metal-based funds.


3) Gold Money Market Account – This account is designed to provide a safe place to keep your money while it is invested in precious metals. It is a great way to earn interest on your money, and you can also take advantage of Betterment’s “Investment Reimbursement Program” (IRP) if you want to make an extra contribution to your account at any time.


4) Precious Metals IRA – Unlike Roth IRAs, precious metals IRAs are not tax-advantaged accounts. However, there are some tax advantages that come with holding precious metals in an IRA—namely, the fact that you can deduct the expenses that you incur when buying and selling gold and silver bullion, as well as the annual maintenance fee for your IRA.


Can You Invest In Gold Through Your 401k?

In most cases, you can not. However, there are a few exceptions to this rule.


1) If you are self-employed or your business is in the plan itself or a related entity: You can invest in precious metals directly through your 401(k) plan. The IRS website, the site provides a thorough overview of the rules and regulations already in place regarding investments within 401(k).

2) If you are an employee: If you are an employee and want to invest in gold, then your employer is required by law to provide you with access to both gold and silver investment options within your IRA account at Betterment.


3) If you are married (or if you file jointly): You can also transfer some of your assets from one spouse’s IRA account into another spouse’s IRA account if it contains assets held in a 401(k). This is called “spousal rollover,” and it allows for greater flexibility when it comes to investing in precious metals as well as other asset classes like real estate investment trusts (REITs).


The great news is, yes, you can invest in gold through your 401(k). The bad news is that it is not very common. Though the majority of employers offer some sort of investment option, most are not as flexible as a 401(k). Certain types of investments, such as gold, are not allowed in many plans. That means that while most people are able to invest in a variety of other investment options, gold is often one of the few that is restricted. If this is the case for your plan, you will want to speak with your HR representative to see if there is anything they can do to let you invest in precious metals.


How To Buy Physical Gold With A 401(k)?

Buying physical gold with your 401(k) is possible, but it is not easy.


1) You must be an employee of a company that has gold or silver shares in their 401(k) plan.


2) You must be able to prove the cost basis of the gold & silver you want to buy as well as the value at which you want to sell it. The IRS has rules about how much you can deduct in expenses when selling your bullion for cash, and that limit varies depending on the type of bullion you are selling and whether or not your plan allows for partial rollovers.


3) You can only invest in a precious metals IRA account with Betterment if you are an employer sponsor or a plan participant. If this is not the case, then we strongly recommend that you contact your HR representative to see if they have any flexibility when it comes to investing in precious metals within their plan.


4) it is important to note that the IRS requires that any gain or loss you make is reported on your tax return, and the amount of this gain or loss will be treated as a taxable event. This means that if you buy gold with your 401(k) and sell it for more than you paid, then you will have to pay taxes on that profit.


5) You can only invest in precious metals with Betterment if your plan allows partial rollovers. This means that when you take money out of an account, you can rollover only a portion of it into another account within the same plan. The rest stays in the original account.


6) You can only buy gold with a 401(k) if it is not commingled within another type of investment like real estate investment trusts (REITs).


Commingling basically means that gold is being held alongside other types of investments like stocks, bonds, commodities, and mutual funds, which are not going to be eligible for a precious metals IRA account at Betterment. If this is the case for your plan, then we strongly recommend that you speak with your HR representative to see if they have any flexibility when it comes to investing in precious metals within their plan.


One of the great benefits of owning physical gold is that you do not have to worry about selling it. Unlike stocks or ETFs, which can sometimes be volatile and subject to the whims of the market, physical gold may go up or down, but it typically will not go down very much. That is because it is not dependent on the market to function. You do not have to worry about the price inflating or deflating on its own. Instead, you can keep it in a safe and know that if the market crashes or inflation skyrockets, you are still going to be able to sell it and get back the same amount of money you put into it.


Why Invest In Gold?

Due to the inflationary nature of paper money, investing in physical gold is one way to protect your purchasing power. If the price of paper money rises, you can invest in gold to maintain the same amount of purchasing power. Gold is not only a great way to mitigate the effects of rising inflation, but it is also a safe way to store wealth. Gold is a finite resource that does not emit dangerous pollution. That makes it a safe way to store wealth for the future.


Safe Haven Properties Of Physical Gold

Owning physical gold can offer a number of great benefits that can not always be found in stocks or bonds. One of the biggest is a physical element’s resistance to inflation. Theoretically, if the Federal Reserve starts printing money at an alarming rate, there is a chance that inflation will shoot up and your paper money will lose its value. Gold, on the other hand, is a rare and finite resource that is unlikely to ever increase in value (unless the world decides to endpaper money altogether). Another advantage of owning physical gold is that it is a great hedge against geopolitical uncertainty. While it is unlikely that war or major political events would cause widespread devastation like the Great Depression, it is important to have a backup plan. Gold is one of the few assets that are resistant to both inflation and geopolitical risk.


Final Words: Is Buying Physical Gold Worth It?

Buying physical gold is a great way to diversify your investment portfolio and hedge against inflation and geopolitical uncertainty. While it can be a bit pricey, it is a great option if your employer does not offer a 401(k) option. If you do choose to invest in physical gold, be sure to keep it in a safe and store it away from moisture. Physical gold also has to be stored in a safe that is at least as secure as an FDIC-insured bank account would be. If you want to buy physical gold, you will need to find a nearby gold dealer. There are a few things you should look for when browsing the selection. First, make sure that the gold is in the form of coins. Also, you may want to consider getting gold that is at least ten years old. This will help lower its price tag in case you want to sell it in the future.


A 401(k) is an account that allows employees to save for retirement through their employer at tax-deferred rates. With this type of arrangement, contributions are made from pre-tax funds, which reduces the amount of taxes paid when withdrawn later in life.