What Are the Pros and Cons of Rolling 401k Into IRA?

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The Bureau of Labor Statistics has released data showing that a person between the age of 18 and 52 may change jobs 12 times before they retire. Throughout all these jobs, it is easy to assume that a few of them offered retirement accounts to the employees. Over time, these employees find themselves with 401k accounts located at several former employers.

Some people will take the time to roll over their 401k each time that they change jobs. Most people, however, find themselves managing several accounts across multiple employers. Then, when they are finally ready to condense the accounts down, their current employer does not offer a 401k plan.

So what do you do?

The easiest way to manage this situation is to roll over all of your accounts into a self-directed IRA. An Individual Retirement Account provides many benefits that you did not have with a 401k, but there are a few differences that you should know about before you decide to roll over your account.

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What Are the Pros and Cons of Rolling 401k Into IRA?

Different Types of 401k Accounts

Two types of 401k accounts are available for you to choose from when you are looking to establish a retirement account. The first is a Standard 401k. This type of account allows you to invest in stocks, bonds, ETFs, and mutual funds. You have control over how you want to invest your money into any of these investments.

The second type of IRA is the Self-Directed or Gold IRA. A self-directed IRA broadens the assets you can include in your retirement account. With a gold IRA, you can include gold, silver, platinum, and palladium as part of your retirement assets. Some accounts will also allow you to include cryptocurrency in your account.

If you want to control your retirement account and diversify your assets, you will benefit more from a gold IRA than a standard account.

Benefits of Rolling Over Your Accounts To An IRA

There are several benefits to rolling over your 401k into an IRA account. Some of these benefits include:

  • You will have all of your accounts condensed down to one account, making it much easier to manage.
  • You will pay lower management and account fees because you only manage one account.
  • You have the ability to diversify your investments. This gives your retirement savings more protection.
  • Penalty-free withdrawals for some expenses. A withdrawal from your 401k can cover first-time home purchases, college tuition, and some medical expenses without incurring any penalties for early withdrawal.
  • Lower investment costs. When you invest in different assets, the costs will be lower than when you do so through your 401k or individual accounts.

When you select a gold IRA, you will also benefit from adding gold to your assets for retirement.

Drawbacks of Rolling Over to a 401k

As with any financial transaction, you should be aware of some drawbacks to changing to an IRA before changing accounts. These drawbacks may not even affect you or your plans, but to make an informed decision, you should be aware of these situations.

  • Loss of loan capabilities. When you have a 401k, you can take a loan against your account without being charged penalties. You cannot take a loan out against your 401k. The only thing you can do is make withdrawals for some life events without penalties.
  • Delayed withdrawals. If you retire before the age of 59.5 you cannot begin to take withdrawals from your IRA. With a 401k you can begin to take withdrawals from the account if you retire at age 55 or older.

As you can see, there are only a few drawbacks to changing your 401k into an IRA. If these two things do not matter to your financial plans, then there really is no reason not to take advantage of having an IRA.

What Are the Pros and Cons of Rolling 401k Into IRA?

Why A Gold IRA Makes Sense

Diversity is key to successful investing. You have heard the old saying "Don't put all of your eggs in one basket." This old saying could not be more accurate when it comes to investing.

Investing is always risky, but some investments are riskier than others. Stock market fluctuations are common, and anything can cause the stocks to drop without warning. While most people expect these fluctuations to occur and are comfortable with them because they are investing for the long term, significant drops in the stock market can cause you a lot of financial harm.

Think about it. When you are 30, a large fluctuation in the market may not be too devastating because you have a lot of time before you retire. When you are 52, a major market loss could mean you have to work into your 70s.

That is why it is important to diversify your assets to not just rely on stocks to fund your retirement. You can do this easily by starting a Gold IRA.

A gold IRA, also known as a self-directed IRA, allows you to invest in the precious metals market. While there are some fluctuations in this market, gold has been a stable investment for many years.

When you invest in gold coins and bars as part of your retirement account, you are required to meet purity standards. The IRS requires that any gold coins or bars be at least 99.5 percent pure and come from designated mints worldwide. This is very beneficial to you as an investor.

You never have to worry about their value when you invest in these high-quality gold coins and bars. Gold with lower purity content will not give you the same asset power as pure gold coins and bars.

When you are ready to liquidate your account during retirement, you will not have any problem selling these coins or bars because of their purity. Some of these coins may also have a collector's value attached if they are a low mint or rare coin, adding to your benefit.

You have a choice of investing in gold, silver, platinum, or palladium as part of a self-directed IRA. Some companies will also allow you to invest in cryptocurrencies with these IRAs. However, a majority of gold IRAs only focus on precious metals.

Is An IRA Right For You?

If you believe a gold IRA is the right choice for your retirement investments, the next step is finding a gold company that manages gold IRAs. Many companies offer these services. However, we believe that the following three companies offer their customers the most benefits when using their services.

Take the time to review the different companies to find the exact one that meets all your needs. Once you find the right company, they can manage your rollovers and help you start investing in precious metals.

Top Three Gold IRA Companies


Agusta Precious Metals is a leading gold IRA company that is based in Casper, Wyoming. The company was founded over ten years ago and has quickly risen to the top of the list of gold IRA providers. The company has been very aggressive about creating a customer-oriented process for purchasing gold and silver as part of their retirement.

Augusta Precious Metals has been ranked by leading financial magazines as a preferred provider of gold IRA services. They have five-star ratings with TrustPilot and Google my Business. They also have an A+ rating with the Better Business Bureau. Augusta offers extensive educational material for its clients and a wide variety of gold and silver coins and bars for investment.

GoldCo is a California-based precious metals company that has managed gold IRAs for over a decade. They have become one of the leading companies to provide Gold and Silver IRAs. The company has exceptional reviews across all of the review sites and has a perfect rating with the Better Business Bureau.

GoldCo has an extensive line of gold and silver coins that you can purchase as part of your retirement package. They work with a few IRA management companies so that you can select the account that best meets your needs. They also work with several depositories across the country for gold asset storage.

Based in Los Angeles, American Hartford has been serving clients since 2012. The company has gained in popularity because of its exceptional customer service and educational materials. American Hartford ranks highly across all review sites.

For your retirement, you can purchase gold, silver, and platinum coins and bars from American Hartford Gold. If you are a collector, you can also purchase these coins and bars for your personal use. Offers the largest selection of coins and bars in the industry.

When you are looking for a gold company to work with, make sure that you take advantage of all of their educational materials. These materials are designed to help you make an informed decision about investing in gold and other precious metals. Speak with their representatives and ensure that all your questions are answered before investing.