403b Rollover to Gold IRA – Should I Consider This Option?

There are many ways to diversify our retirement portfolios and make the most out of our investments to protect our hard-earned money. Buying gold may be one of them.

Precious metals have high intrinsic value and offer unique inflationary protection. Since there’s a limited supply of these assets, their price is usually high. Also, gold can be a great way to save for the future or pass on our wealth to the next generations.

In simple words, adding gold to our retirement portfolio is one of the best decisions we can make, but how should we do it? Many wonder if it’s possible to add gold to a 403(b) plan. Have you considered that option?

Here’s all the information we need! Let’s review all the considerations and steps for buying the world’s most popular precious metal with a 403(b) plan.

What Is a 403(b) Retirement Plan?

Before delving into the process of adding gold to a 403(b) retirement plan, we must understand what it is. Have you heard about this option?

Essentially, a 403(b) is a type of retirement account designed for people working in public schools or tax-exempt organizations.

These employees are eligible to open a 403(b) plan:

  • School teachers
  • Non-profit organization workers
  • School administrators
  • Doctors
  • Nurses
  • Librarians
  • Ministers
  • Other government employees

A 403(b) is similar to a 401(k) in that employees can defer part of their salary to fund these accounts.

Overall, participants contribute to their 403(b) plans through payroll deductions, which were limited to $20,500 for the 2022 fiscal year. However, employees aged 50 and over can contribute an additional $6,500. People who have been with the same organization for at least 15 years can also add an extra $3,500 to their contributions each year.

In addition, 403(b) plan holders can delay a portion of their paychecks for their retirement or ask their employers to match part of the contributions if they agree to do so.

A 403(b) allows our money to grow without capital gain taxes. However, this account may be tax-deferred, which potentially reduces our taxable income this year due to contributions.

In addition, there are several rules related to these types of accounts that holders must adhere to in order to avoid penalties. We’ll learn more about them below!

However, there’s something we need to answer first: Can we roll over a 403(b) plan to a precious metals IRA?

What Is a 403(b) to Gold IRA Rollover?

A 403(b) to gold IRA rollover is like a 401(k) rollover. In both cases, retirement investment account holders need help from a plan provider and administrator.

Additionally, these fund rollovers happen the same way for a 403(b) and a 401(k). There’s also a limited number of investment options for each plan. Why do many choose this option?

Rolling over a 403(b) into a gold IRA offers multiple advantages for investors, from more control and flexibility to less risk and inflation protection.

Rolling Over a 403(b) Plan to a Gold IRA Account – Rules & Limitations

As mentioned above, we can roll over 403(b) funds into an eligible individual retirement account or IRA to purchase precious metals, but these aren’t the only options.

Actually, we can roll over a 403(b) into other retirement accounts, including a 401(k), another 403(b), and other qualified plans. The best part? We can do it without facing tax penalties.

However, we have to follow several rules if we want to avoid tax penalties. Let’s take a look at the requirements, regulations, and limitations on 403(b) rollovers.

  • It’s essential to complete the rollover process within 60 days after we receive the funds from our 403(b). Otherwise, the Internal Revenue Service (IRS) will treat that money as taxable distributions.
  • If we aren’t 59 ½ years old, the IRS may also impose a 10% penalty on the fund withdrawal. It’s added to income taxation.
  • We can only roll over a 403(b) to an IRA once a year. That period begins the day we receive a distribution from our plan. However, this rule is individual for every retirement account we have.
  • Additionally, we cannot make other investments with the cash we get from the distribution until we establish our IRA. These purchases are prohibited from the time we receive the 403(b) funds until we open our retirement account.
  • Ideally, we should pick the “direct rollover” option for our 403(b) plan. If we choose this alternative, we don’t receive a check for the distribution. Instead, our plan provider transfers the distribution to our new IRA, which will save us time and headaches.

Investing in Gold with a 403(b) Plan – How Can We Do It?

If we want to invest in gold with our 403(b), there are several options available. This page shows how to put gold in your IRA.  However, not all investment vehicles commonly used to purchase precious metals are allowed for these types of accounts. Here’s more information about it.

Physical Gold

Physical Gold

We cannot buy and hold physical gold with a 403(b) retirement plan. In other words, we aren’t able to invest in the following assets:

  • Gold coins
  • Gold bars
  • Gold bullion
  • Gold collectibles

As explained above, a 403(b) retirement plan must comply with the same rules as a 401(k). Therefore, if we want to buy physical gold, we have to establish a gold IRA account.

A gold IRA account allows us to invest in precious metals, such as gold, silver, platinum, and palladium, and deposit these assets into our retirement plan.

However, gold IRAs work like most retirement accounts holding other investable assets. As such, capital gains taxes are deferred until we make withdrawals, which are allowed once we’re 59 ½.

While we can’t add physical precious metals to our 403(b) plan, there are other ways to purchase gold if we have this type of retirement account.

Gold ETFs

Since we can’t add gold to our 403(b) retirement plan, investing in gold exchange-traded funds (ETFs) may be a good option.

However, it’s important to understand these assets and how they work. When we put our money in a gold ETF, we aren’t buying physical precious metals. Instead, we’re investing in an exchange-traded fund that holds gold.

While this isn’t necessarily bad, there are several key aspects to understand before choosing this investment option. First, the change in gold ETF values varies in relation to the movements of gold prices.

In addition, we can choose two types of gold ETFs for our investment portfolio. These are:

  • Gold ETFs backed by physical gold
  • Gold ETFs backed by gold futures contracts, including SPDR Gold Trust (GLD), which is the most popular option in this category

Many people choose ETFs backed by physical gold to avoid potential risks, as they fear that ETFs backed by gold futures will be affected by significant mispricing in the precious metals market.

However, most people can make a 403(b) to gold IRA rollover to use the funds in their existing plan to buy gold or other precious metals and protect their retirement savings for the long term.

Benefits of Rolling Over a 403(b) Plan into a Gold IRA

As mentioned, rolling over a 403(b) plan into a precious metals IRA offers many benefits, such as greater control and more flexibility when managing retirement savings.

A gold IRA is a type of individual retirement account designed for investors who want to hold gold and other precious metals or precious metals-related securities. It’s one of the best options to diversify our portfolios.

Since a gold IRA is a specialized type of self-directed IRA, holders have greater control over their assets. If we choose this option, we’ll have more freedom when selecting and buying different investment products with our savings.

In addition, we’ll have all the important decisions in our hands. That doesn’t happen when we use an employer-funded plan, such as the 403(b), since these accounts often require vesting schedules.

A 403(b) retirement plan is also subject to business risks that could affect our money. However, investing in precious metals through a gold IRA can protect our savings from inflation and other economic events, especially during periods of economic uncertainty.

Additionally, if we have control over our investments instead of depending on other people’s decisions, the risks involved are lower, so we can make changes when necessary without suffering huge losses or missing opportunities to make a profit.

All these advantages have made the popularity of gold IRAs skyrocket in recent years. However, there are more things to consider.

Other Benefits We Should Consider

Here are other benefits of rolling over a 403(b) retirement plan into a gold IRA account and making precious metals investments:

Tax-efficient Account

Overall, gold IRAs offer more tax advantages than 403(b) plans since these accounts allow interest to grow tax-free. Also, contributions are tax-deductible.

Additionally, depending on the type of account we have and the specific circumstances surrounding our investment, we could access our money without paying taxes.

In other words, gold IRAs are more tax-efficient than other retirement plans, including a 403(b) account.

Opportunity to Make a Backup Plan

It doesn’t matter if we’re experts or just starting out in the precious metals investment world. There’s a rule of thumb we cannot forget: No one should invest all their hard-earned money in a single product.

A 403(b) retirement plan is less risky than other investment options. However, that doesn’t guarantee everything will turn out as expected. Many things can still affect our portfolio’s value.

We should always have a backup plan to protect our money when an asset doesn’t perform well or an event affects a specific market. Also, this will help us stay calm, avoiding losing our minds if something goes wrong.

Ideally, investors should split their money and invest a portion in different options or products, including precious metals, stocks, real estate, bonds, and more.

When we have different types of assets in multiple IRA accounts, we diversify our portfolio to protect our money.

If an economic event affects one of our assets, such as a crisis or market crash, the other products will protect our money. As a result, these factors won’t impact all of our savings.

A Safer Investment Option

Investing in gold not only offers economic benefits but can also give us the peace of mind we need.

Precious metals are safer than other products. Unlike shares, bonds, stocks, and other paper assets, physical gold is not subject to an economic crisis.

In fact, gold, silver, platinum, and palladium are considered a haven when there’s economic uncertainty. Many also add precious metals to their portfolios to protect their money against inflation or deflation.

Also, gold IRA owners cannot store their assets at home. Instead, precious metals must be held by an IRS-approved depository.

The risk of theft in these facilities is lower. Plus, depositories should have insurance policies to protect their customers’ investments if something happens.

Do We Have to Pay Taxes When Rolling Over Our Funds from a 403(b) to a Gold IRA?

It depends on the circumstances but keeping the following information in mind can help us avoid taxes when we roll over our 403(b) into a gold IRA or other retirement account:

  • We can ask our former employer to send the money directly to the IRA custodian instead of giving us a check. This can help us avoid the federal income tax on the distribution.
  • Our employers should withhold 20% in taxes if they plan to send the funds directly to us. After that, this percentage must be made up with other assets when transferring the money to a gold IRA. If this process takes more than 60 days, the amount will be treated as a distribution and may be subject to additional taxation. There are several exceptions to this rule, including our age.
  • Earnings accumulated after leaving the job may also be taxable. It depends on whether we used pre-tax or post-tax dollars to make the contributions. However, we cannot claim losses as deductions.

If we consider these recommendations, we can protect our money and avoid losses during the rollover.

Final Thoughts

More and more people are now interested in gold investments. Precious metals can benefit our retirement portfolio, offering diversification and a hedge against inflation.

However, there are many ways to buy precious metals. If we have a 403(b) retirement account, we can make a gold IRA rollover to use our existing funds to purchase these assets.

The process seems complex, but it can be easier if we take into account the considerations mentioned above. In addition, we can also look for a reputable gold IRA company where we can get a 403(b) to gold IRA rollover to save more time and avoid the hassle.

Tim Schmidt


Tim Schmidt is an Entrepreneur who has covered retirement investing since 2012. He started IRA Investing to share his expertise in using his Self-Directed IRA for alternative investments. His views on retirement investing have been highlighted in USA Today, Business Insider, Tech Times, and more. He invested with Goldco.