Author Topic: Can I "roll" my notes into an IRA?  (Read 4314 times)

priuspilot

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Can I "roll" my notes into an IRA?
« on: October 21, 2012, 08:16:06 AM »
I currently have some money (less than $5k) invested in a Prosper account. If I wanted to start an IRA at the end of the year would Prosper all me to roll my current notes into a Prosper IRA or would it have to be all new money?

dagilbe

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Re: Can I "roll" my notes into an IRA?
« Reply #1 on: October 21, 2012, 09:39:55 AM »
All new.  I wish we could just rollover funds, but it doesn't work that way. 

Wrats6

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Re: Can I "roll" my notes into an IRA?
« Reply #2 on: October 21, 2012, 07:21:42 PM »
I can confirm that Dagilbe is correct.

graceful

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Re: Can I "roll" my notes into an IRA?
« Reply #3 on: November 04, 2012, 09:58:51 AM »
I believe I know the answer to this.

Prosper isn't set up to manage IRAs. That's why we have to bring the money in through an IRA trustee.

To do what you intend, you'll need to sell your loans, withdraw funds and then send them to the IRA trustee for deposit with Prosper.

Not as elegant as what looks easy at Fidelity or Vanguard, but actually all this is going on in background at Fidelity and Vanguard, large firms just shield us from having to watch or be involved.

Graceful


subdood

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Re: Can I "roll" my notes into an IRA?
« Reply #4 on: January 24, 2013, 09:17:04 PM »
dagilbe and graceful are correct indeed.

Here is the bad thing with a Prosper IRA though.

Once you get your funds sent to Sterling Trust who will forward them to your Prosper IRA account, you can start buying Prosper notes from within your IRA.
Sounds great right?
The problem comes in if you ever decide to get your investment back out of your Prosper IRA. Once you buy a note from within a Prosper IRA, there is no way for you to sell that note early to convert it back to cash. If you buy a note in your Prosper IRA you own that note until maturity.
You can transfer your cash balance back to Sterling Trust in order to move it somewhere else, but you cannot sell your notes in your IRA.

If your not sure you want to tie your funds up for a full 3 or 5 years, I would suggest using Lending Club.

Lending Club lets you buy and sell notes in an IRA account through Folio just like they let you buy and sell in a normal account.
You still need to use a trustee to transfer the funds between yourself and Lending Club, but at least in an emergency you could sell your notes, transfer the cash back to the trustee, and get your funds back.

Just my .02 cents.

Jeff

TRPeterson

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Re: Can I "roll" my notes into an IRA?
« Reply #5 on: January 25, 2013, 07:08:58 AM »
If your not sure you want to tie your funds up for a full 3 or 5 years, I would suggest using Lending Club.

While I believe the question's been answered about 'rolling' into an IRA... as far as the money tied up for 3 to 5 years, you may want to see another post of mine.  It's actually about 2 years at most.  Here is an excerpt:

http://www.lendacademy.com/forum/index.php?topic=211.0
While that is true, it's not quite as bad as it sounds.  I manage 3 Prosper accounts (cash, my IRA and my wive's IRA).  They all have an average repayment rate of 5%/month, meaning it would take roughly 20 to 22 months for all notes to become liquid.  If you had $50,000 invested, you could count on receiving $2,500/month in payments.  This assume you invest in mostly 36-month notes with maybe a 20% blend of 12- and 60-month notes.
Prosper Cash XIRR ROI 16.05%
Prosper IRA XIRR ROI 15.28%
http://www.ProsperToRetire.com
http://www.NumberWhale.com

graceful

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Re: Can I "roll" my notes into an IRA?
« Reply #6 on: January 25, 2013, 05:31:56 PM »
I'm running a liquidity check now, and am getting 5% of the account back each month, sometimes more. So in an agressive account (D - HR), you'll see your principal back in less than 2 years.

Graceful