457(b) Rollover Into Precious Metals
Money in a governmental 457(b) plan can generally be rolled into a self-directed IRA that holds IRS-approved precious metals once you have a distributable event, such as leaving your job. Non-governmental 457(b) plans are different and usually cannot be rolled into an IRA at all. Before moving governmental 457(b) money, weigh one trade-off: the plan's exemption from the 10% early-distribution tax generally does not follow the money into an IRA.
Two Very Different Kinds of 457(b)
Section 457(b) plans are deferred compensation plans offered by state and local governments and by certain tax-exempt organizations. The tax code treats the two types differently:
| Feature | Governmental 457(b) | Non-governmental 457(b) |
|---|---|---|
| Typical sponsor | States, cities, counties, public agencies | Tax-exempt hospitals, charities, unions (often for highly paid staff) |
| Assets held | In trust for participants | Remain the employer's assets, subject to its creditors |
| Rollover to an IRA | Generally allowed | Generally not allowed; only transfers to another non-governmental 457(b) |
The IRS rollover chart lists governmental 457(b) plans among the plans that can roll into a traditional IRA. If you're unsure which type you have, your plan documents or HR department can tell you. The rest of this page assumes a governmental plan.
The Early-Distribution Trade-Off
Distributions from a governmental 457(b) are generally not subject to the 10% additional tax on early distributions, even if you take them before the IRS-defined age. That is an unusual advantage. Once the money is rolled into an IRA, IRA rules apply instead, so a later withdrawal from the IRA before the IRS-defined age could face the 10% additional tax unless another exception covers it. The IRS explains the exceptions on its tax on early distributions page.
If you may need the money soon, one option some people consider is leaving part of the balance in the 457(b) and rolling only part into metals. Our page on partial rollovers explains how to request that.
Moving Governmental 457(b) Money Into Metals
- Confirm your distributable event. Most governmental 457(b) plans allow distributions after you separate from service. Some allow in-service distributions after a plan-specified age or for unforeseeable emergencies; emergency withdrawals are not eligible for rollover.
- Open a self-directed IRA. Pick a custodian that accepts physical metals. Pre-tax 457(b) money goes to a traditional IRA; Roth 457(b) money, if your plan offers it, goes to a Roth IRA.
- Collect the receiving instructions. The custodian supplies its payee name, your account number, and delivery details.
- Elect a direct rollover with the plan. Payment goes straight to the custodian, so the 20% mandatory withholding on eligible rollover distributions doesn't apply.
- Choose metals that meet IRS standards. Gold must be at least .995 fine and silver .999 fine, with an exception for American Eagle coins, under 26 U.S.C. 408(m).
- Confirm storage. The dealer ships the metal to an approved depository; the custodian records it on your statement.
Other Details Public Employees Ask About
Pension and 457(b) together
Many public employees also have a defined benefit pension. Pension options work differently from a 457(b) account; see pension lump sum rollovers if your plan offers a lump sum.
Purchasing service credit
Some governmental plans let you use 457(b) money to buy service credit in a pension through a trustee-to-trustee transfer. If that's on the table, compare it with a metals rollover before you move anything, ideally with a professional who understands your pension system.
Loans
If your 457(b) offers loans and you have one outstanding when you leave, an unpaid balance may be offset against your account. That offset is treated as a distribution with its own rollover rules.
Working With a Precious Metals Company
Goldco is a precious metals company that offers gold and silver for IRAs funded by rollover from a 401(k) or other qualified retirement account. It says it works with all major self-directed IRA custodians and sends IRA metals to an independent insured depository. Its precious metals specialists are not licensed to give financial, legal, or tax advice, so the early-distribution question above is one to settle with your own tax professional. Learn more in the Goldco review and the Goldco storage and custodians page.
Frequently Asked Questions
Can I roll a non-governmental 457(b) into gold?
Generally no. Non-governmental 457(b) balances usually cannot be rolled into an IRA. They can typically only be transferred to another non-governmental 457(b) plan.
Does moving 457(b) money into metals create a tax bill?
A direct rollover of pre-tax money into a traditional IRA is generally not taxable. The cost to consider is the potential loss of the 457(b)'s exemption from the 10% early-distribution tax.
Can I move money back from a metals account into my 457(b) later?
Many governmental 457(b) plans accept rollovers in, but not all do, and plans generally can't hold physical bullion. Check your plan.
Does a 457(b) rollover count toward the once-per-year rule?
No. The one-rollover-per-year limit applies to IRA-to-IRA indirect rollovers, not to rollovers from employer plans. See the one-rollover-per-year rule.