What is a Gold IRA Rollover?

by Grant HEnson

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If you’re in the process of saving up money for your retirement, there’s a good chance that you already have a dedicated retirement account. If you’re an employee in a company, you’re more likely to have a 401(k), whereas self-employed individuals are more likely to have an IRA (Individual Retirement Account). 

However, did you know that you can actually set up a gold IRA and fund it using the existing funds in your current retirement account? This is what’s known as a gold IRA rollover, and it's what sets gold IRA’s apart from traditional retirement accounts. 

In this article we’ll be diving deep into how gold IRA rollovers work and why they’re unique in addition to the tax advantages you get from investing in a gold IRA

Understanding IRA Rollovers

As we’ve mentioned before, a gold IRA rollover entails transferring over your funds from a 401(k) or a traditional IRA into a gold IRA. Thereby enabling you to diversify your investment portfolio by taking some money out from traditional assets like stocks, bonds and mutual funds and investing them in precious metals

Also, you need to know that a rollover is not the same as a transfer when it comes to retirement accounts. A transfer is used to move funds from one institution to the other while the account type stays the same. Whereas a rollover is used to transfer funds from one account type into another account type. 

There’s two basic ways to perform a rollover of funds from your existing retirement account to your gold IRA.

A Direct Rollover

In Direct rollovers, the custodian of your existing account and the institution holding your current IRA savings transfer funds directly into your new gold IRA. 

Both the custodian of your existing account and the custodian of your gold IRA collaborate to ensure that the transfer is 100% penalty free. Thus, ensuring that you don’t incur any heavy taxes on your funds from the IRS during the transfer. 

An Indirect Rollover

An indirect rollover on the other hand entails you withdrawing funds from your existing IRA or 401(k) first and then depositing those funds into your gold IRA. Now, you may think that since funds are being withdrawn from your existing IRA before your retirement age, you’ll probably have to incur a tax-penalty during this process. 

However, the IRS has stated that you have 60 days from the time you receive the funds to deposit them into your new account. This makes an indirect rollover completely tax and penalty-free as well. 

What Makes a Gold IRA Rollover Unique?

Many people now recognize the significance of having dependable savings for retirement. While 401(k)s and traditional IRAs offer the security of tax-advantaged accounts, they typically invest in virtual assets like stocks and bonds. 

On the other hand, when you opt for a rollover into a gold IRA, your funds will be used to invest in physical gold, which you can physically possess.

Physical assets are always a safer investment option, considering how you can retain their ownership for as long as you want without them losing too much value. Additionally, physical assets enable better risk management, with precious metals such as gold typically maintaining their value over a longer period compared to stocks, bonds, or mutual funds.

In gold IRAs, after you’ve invested in suitable coins or bullion bars, your tangible assets are also stored in secure, third-party depositories making them more secure than traditional assets. This additional security coupled with the stability of a precious metal investment, makes gold IRA rollovers truly unique. 

Reasons to Consider a Rollover

Continuing in our quest to make you realize the importance of gold IRA rollovers, we’ve come up with a few reasons why you should consider investing in precious metals. 

Hedge Against Inflation and Economic Instability

During periods of high inflation and economic instability, investing in gold and other precious metals can protect your funds.

As currency loses purchasing power, gold tends to maintain or even increase in value, offering security for your retirement savings.

Low Correlation with Traditional Assets

We’ve mentioned how a gold IRA can be a terrific option for anyone looking to mitigate risks in their investment portfolio. That’s mainly because gold and other precious metals have a very low correlation with traditional assets like stocks, ETFs (exchange-traded funds) and bonds. 

This essentially means that while the value of these assets is going down, the value of gold and other precious metals tends to stay stable or even appreciate. This allows you to reduce your risk exposure and keep a hold on your retirement funds when traditional investments are underperforming. 


Diversification is a fundamental concept in investing, ensuring that you don't have all your assets concentrated in one place. 

Having a gold IRA can aid in achieving this diversification by allowing you to spread risk across various asset classes in your portfolio, reducing potential losses in any one specific area.

Steps to Execute a Gold IRA Rollover

After discussing all of the merits of opening a gold IRA and rolling over your funds, it's time to finally understand how the process actually works. Here’s a step by step guide on how to execute a gold IRA rollover.

Step 1: Choosing a Reputable Gold IRA Custodian

To initiate a gold IRA rollover, your first decision needs to be choosing your new account’s custodian. Your custodian will be responsible for holding your gold assets, finding storage options for them, managing your account’s paperwork and processing the rollover. 

Thus, you need to choose your custodian very carefully. Go for one that has a solid track record, charges fair fees, and has received glowing recommendations from their existing client base. See my top recommendations here, such as Goldco or Augusta Precious Metals.

Step 2: Set up Your Gold IRA

Next up is finding a gold IRA company that can help you set up your account. The rules for finding a gold IRA company are quite similar to those of finding a custodian. 

You’ll basically have to look for a company that: 

  • Doesn’t charge any excessive fees.
  • Has a better than average reputation of handling their customers’ accounts.
  • Plus, they’ll also need to have a great track record when it comes to setting up gold IRAs.

After you’ve selected your company, just follow their instructions and set up your account to move on to the next step. 

Step 3: Work With the Custodian to Rollover your Funds

With your account all set up, the only thing left to do is request a rollover from your existing retirement account into your gold IRA. Your custodian will help you out in this respect by collaborating with your previous account’s custodian. 

Together they’ll initiate the transfer of funds, either through a direct rollover or an indirect rollover. After the rollover is complete, you’ll be able to invest in any IRS-approved precious metal.

Potential Tax Implications

Another benefit of gold IRA rollovers is that they don’t have too many tax implications overall. The only real tax penalty you need to watch out for is the early withdrawal penalty. 

The early withdrawal penalty causes you to pay an additional 10% of your withdrawal amount in tax to the IRS, if you’re withdrawing or distributing from your gold IRA before retirement age. This penalty can be accidentally triggered during a rollover especially if you and your custodian have opted for an indirect rollover. 

That’s because in an indirect rollover, the funds are first withdrawn from your existing IRA into your account. You then have 60 days to transfer those funds into your gold IRA. Failure to do so in the allotted time will cause you to incur the early withdrawal penalty. 

For reasons like this one, we actually advise all investors to transfer their funds through direct rollovers instead. Where the funds are transferred directly from your existing retirement account directly into your gold IRA, without you having to be the intermediary. 

Post-Rollover: Managing Your Gold IRA

Inexperienced gold IRA owners believe that the job is done once they rollover their funds and invest in their chosen precious metals. Many believe that there’s no choice left to make once you choose the precious metals you’re going to invest in and select a storage depository for them. 

They couldn’t be more wrong though. The monitoring and evaluation of your assets post-rollover is just as important as buying the right assets. Once again your custodian should help you out in this regard by monitoring the performance and value of your current assets. To eventually evaluate if they’re still worth keeping in your portfolio. 

You also need to make it a habit to evaluate your current portfolio and rebalance your holdings according to the current spot market prices of precious metals, which can be quite volatile in the short term. 

Doing all of that is necessary to ensure that you end up with a handsome amount of profit when you eventually withdraw the funds from your retirement account. 


In summary, the effectiveness and importance of a gold IRA rollover cannot be understated. Especially when you take into consideration how much value gold or other precious metals offer as a part of your investment portfolio. 

Not only do gold investments diversify your portfolio, but they provide you with a hedge against inflation. Something that’s sorely needed in the current economic climate of the world. 

Thus, when it comes to your financial future we urge everyone to consult an expert and further understand the long term advantages of gold in your retirement planning. Check out the best gold IRA companies who can assist you in your gold IRA rollover.

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