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A gold 401k is unique from other retirement plans in that it allows you to enjoy the numerous benefits of adding physical gold to your account. But if you’re unfamiliar with this type of retirement plan, you may be surprised at how a gold 401k really works.

The term “gold 401k” is typically used to define an employer-sponsored 401k that has been converted into a gold IRA (also commonly known as a Precious Metals IRA, because it allows other metals, too.)

A real gold 401k – a 401k plan that allows investments in gold – is considered somewhat of a unicorn in the precious metals industry. While not implausible, it would be extremely rare for a 401k to allow gold, because of the limited investment options for these plans.

This is why many retirement savers make the decision to rollover their 401k into a gold IRA. But what are the advantages of doing so, and what could it mean for your retirement savings? Let’s a take a closer look.

Benefits of a gold 401k: rolling over your 401k into a gold IRA

Unique protection
A man holding a golden piggy bankMany people use gold to help protect their retirement savings from a variety of threats: inflation, the declining U.S. dollar, stock market volatility and an uncertain economic future. Each of these threats has the power to eat away at our retirement accounts or reduce our purchasing power when we need it most.

Gold is unique from the paper assets that fund most 401k plans. Unlike mutual funds, stocks and bonds, gold is a finite resource and an extremely liquid asset that is not controlled by a single government or financial institution. Thus, it’s not subject to the whims and follies of Washington and Wall Street. In fact, gold is considered a hedge against inflation because its value tends to increase as bad monetary policies cause the dollar to decline even further.

Diversification
Since gold can’t typically be added to other retirement accounts, a gold IRA allows for greater diversification – a key strategy for any retirement portfolio. Diversifying your retirement account can help minimize your exposure to losses from a single asset type.

Remember, a gold 401k is not limited to gold. You can diversify with other precious metals, including silver, platinum and palladium – each of which has its own unique benefits. You can also hold other types of assets, including stocks, mutual funds, mortgages, real estate and others.

Wealth preservation
If you’ve already done your homework, you know that gold has inherent growth potential – it’s been a proven store of wealth for thousands of years. But retirement savers don’t buy gold expecting to get rich – they buy it to protect the money they already have.

And whether you’re just getting serious about your retirement account, or you already have a sizable nest egg saved up, anything you can do to safeguard your money today for an uncertain tomorrow is probably a smart move.

Tax benefits
A gold-backed IRA offers the unique advantages above, combined with the tax benefits of any other IRA. That’s a key difference between buying gold for physical possession and placing it in a retirement account. By having your gold in an IRA, you can take tax deductions for your annual contributions, or allow the value of your metals to grow tax-free, depending on how you set up your account (Traditional or Roth).

Take the first step

If you’re curious how a gold 401k can benefit your specific retirement plans, Birch Gold Group is here to help. Start by requesting our Free Gold Investment Kit, or call us at (800)355-2116 to speak with one of our Precious Metal IRA Specialists. We’re happy to go over all your options, answer your questions and assist you with the simple process of rolling over your 401k into a new gold-backed IRA.