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Ways to Purchase Gold with a 401k Solo

Many investors are interested in investing in gold due to the high market value and how volatile it can be in terms of price change. Majorly, investors have found themselves making tons of cash as it continues to surge higher in price. In the event of a market crash, it has since served as a haven for investors to hedge their portfolios.

The shortcoming for holders of most 401k plans is the limitations placed on ownership of gold or any of its derivatives. The derivatives are contracts that include futures and options. Due to this, most holders find it difficult and discouraging to invest in this precious metal. However, in this article, you will find out the various alternative means of investing in this bullion with a solo 401k plan.

What Are 401k Solo Plans?

There are different categories of 401k. A solo plan refers to one meant for the self-employed. Usually, a retirement plan is meant for those who have full-time jobs and other forms of employment. But a solo plan enables those who run their own business to have a retirement account. However, this is different from an individual retirement account.

Based on a survey, most Americans depend on these retirement plans to enable them to retire comfortably. You would be required to invest a sum every month towards your retirement period. However, there are usually contribution limits that are placed by the IRS (Internal Revenue Service).

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The limit for persons below 50 years is about $19,000 for a year. Those who are over 50 years can contribute an extra $6,000 each year. It is called a catch-up deposit.

Investors holding a 401k can select from a range of investment options. These options include index funds, Capital funds, Bonds, etc. All these categories have different rates of interest. Due to its importance, holders can make good interest in major market moves. 

Most investors would also want to benefit from the large moves in prices of precious metals by diversifying a part of their solo portfolio.

Investing in Gold Using 401k Solo

Does investing in gold have a future? | Financial Times

Investing in physical bullion brings better returns compared to any of its other investment forms. It is the reason why most investors prefer the physical gold option. However, this has been a major issue for most 401k holders. Most retirement plans do not support investment in physical metals.

If you are still interested in investing in gold bullion, here are some options you can explore: 

Mutual Funds

This is an option for investing in bullion. You would not be investing in physical gold but what is termed ‘paper gold’ or ‘mutual funds’. To find one, you can go through your plan descriptions. There you would find some mutual funds providing stocks of investment companies involved in gold mining.

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ETFs are another means of investing in bullion without having to buy one physically. However, this method is only limited to those whose 401k plan has brokerage leverage. You can find out from your account manager if your account does. 

If your account has brokerage leverage, you are eligible to purchase a wide range of bullion contracts. Exchange Trade Funds (ETFs) are the best means for brokerage accounts as they allow 401k investors to purchase shares of funds that deal in physical bullion. There are several ETF providers but you should be careful not to choose the wrong one. 

Gold IRA Rollover

401k investors whose plans do not permit them to purchase gold or its derivatives can still invest in precious metals through this means. The investor would have to roll over his or her funds to a self-controlled IRA. An IRA (Investment Retirement Account) provides holders with access to any kind of bullion investment. Some of them include ETFs, Futures, Mutual funds, Options, and stocks.

A special kind of IRA for investing in bullions is called the Gold IRA. This kind of account allows holders to add bullion as well as other precious metals to their portfolio as a qualified investment. 401k solo plan holders who are interested in investing in gold can take this option. 

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All you need to do is get an IRA account, after which you can transfer your funds from the 401k. You should read and understand the terms properly before going through with this process. In terms of penalties, no penalty is usually charged if the fund withdrawn is re-invested in an IRA in a space of one month.

It is important to note that not every IRA account allows investment in actual bullion. Most IRAs will only permit investment in funds or stocks. Make sure it’s a gold IRA you are opening to avoid issues.


Investing in bullion has been a major trend in the finance world. No one wants to be left behind while others bag the cash. The rising surge in this bullion’s price has created so much interest from investors around the world. 

401k holders who have issues and limitations in purchasing the physical bullion can do so by several alternative means. Some of them include mutual funds, ETFs, and Gold IRA Rollover. Bear in mind that investment in precious metals is risky and requires proper knowledge before going ahead. You should also choose a provider that is verified and regulated to avoid being scammed.

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