Author Topic: Roth IRA with P2P Lending  (Read 2430 times)

wcwei5800

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Roth IRA with P2P Lending
« on: February 12, 2017, 07:46:00 PM »
I am thinking about opening a Roth IRA account with Lending Club. However, I do have a concern I want to address before doing so.

If I want to rollover my normal Roth IRA account with a broker to a new Roth Ira, I could just sell all the assets and move the money to the new account. Or I can take all the money from the old account and deposit it into a new account within 60 days.

However, if I want to close Roth IRA account with Lending Club and transfer to a new Roth IRA, it would be hard to liquidate all the assets at once since we need to wait until all the notes mature. (I know Folio is a way, but I don't think it is a great way.)

If I do want to rollover my lending club Roth IRA and to a new Roth IRA, do I have to let my money park in lending club until all the notes matured, and then transfer it all to a new account? Or can transfer my money each month to a new account for next 36 month?

GS

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Re: Roth IRA with P2P Lending
« Reply #1 on: February 12, 2017, 07:59:58 PM »
The bad thing about transferring it month by month is that there is a service fee from the IRA custodian for each transfer.  One thing you can do to speed up the process if you want out is to try sell your notes on folio. 

Looks they charge $100 per transfer for a partial transfer and $250 for a full transfer.

https://quikforms.com/viewform/zpWO-MeLbKwAm
« Last Edit: February 12, 2017, 08:04:04 PM by GS »

Rob L

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Re: Roth IRA with P2P Lending
« Reply #2 on: February 12, 2017, 08:59:47 PM »
I can confirm the $100 fee to transfer cash from SDIRA to another custodian (though my account is Traditional IRA not Roth).
Anticipating this up front when I sold half my notes on Folio last year I waited until the end and made one large cash transfer rather than multiple smaller ones.

wcwei5800

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Re: Roth IRA with P2P Lending
« Reply #3 on: February 12, 2017, 09:46:11 PM »
That is helpful. Thanks guys for the info!

PennySaved

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Re: Roth IRA with P2P Lending
« Reply #4 on: February 15, 2017, 05:15:10 PM »
I have stopped investing in LC and have been transferring cash out from my regular and my Roth IRA accounts.  You can transfer uninvested money from your LC IRA back to your SDIRA account and at least it will be in an FDIC insured account earning a little interest instead of earning nothing in the LC account.

Effective October 1, 2013, uninvested funds in the Cash Account are deposited and held with one or more federally-insured
bank accounts which include Horizon Bank, an affiliate of Self Directed IRA Services, Inc. ("SDIRA"), as well as other
FDIC-insured bank accounts selected by SDIRA. The current interest rate is .15%


I just transferred about $14K from my Roth IRA SDIRA account to my Vanguard Roth IRA.  I thought the transfer fee would be $100 according to the fee schedule, but SDIRA charged me a $50 transfer fee.  I plan to transfer more when I get about another $10K from LC into the SDIRA account and will repeat until all the money has been paid back on the Roth IRA loans.  I have another $30K to go but don't want to wait until this whole amount is collected in the SDIRA cash account because of lost opportunity costs to invest during the length of time it takes to wait for the rest of the money. 

I never thought much about how to transfer or liquidate this account when I set it up.  I believe once the account is below $10K, then SDIRA will be charging me an annual fee of about $100.  This fee was waived when I started investing in the LC IRA as long as I got $10K invested in two years time.  One issue is that recovery money still trickles in over time from charged off loans and I guess I would need to keep the LC Roth IRA open for this reason, but the money trickling in would probably not be worth the annual fee keeping the account open.  Also SDIRA charges another fee to close the account.  Anyone thought of how to deal with the ongoing recovery amounts that will keep coming in?

BruiserB

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Re: Roth IRA with P2P Lending
« Reply #5 on: February 16, 2017, 06:32:13 AM »
I've wondered if there is another more traditional type of investment account that SDIRA is able to be custodian of?  That would allow you to keep SDIRA as custodian, but slowly move out of LendingClub. I know SDIRA is meant mostly to be custodian of "non-traditional" IRA assets like real estate, precious metals, etc., but has anyone ever asked them if they would be custodian of a discount brokerage account?

Also I do think that SDIRA charges $100 annual fee regardless of account size, but LC pays the fee if we have over $10,000 in LendingClub.  So the fee would probably kick in once LC assets drop regardless of how much is invested in other assets. Also maybe LC has only agreed to pay the fee only if LC is the only asset in the account?

These are all questions I have thought about that I haven't seen anyone answer and I haven't taken the initiative to call SDIRA Services to ask.


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Rob L

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Re: Roth IRA with P2P Lending
« Reply #6 on: February 16, 2017, 09:47:01 AM »
I can confirm the $100 fee to transfer cash from SDIRA to another custodian (though my account is Traditional IRA not Roth).
Anticipating this up front when I sold half my notes on Folio last year I waited until the end and made one large cash transfer rather than multiple smaller ones.

This was not as clear as it should have been. Just as PennySaved described above I moved cash from LC to SDIRA maybe 5 or 6 times and let the cash build up in my SDIRA account during the two months I was actively selling notes. It seemed like a good idea to have the cash in an FDIC insured account rather than LC. There were no charges for this. After I was done selling and had moved all the proceeds to SDIRA I then moved the entire amount (less enough to cover the expected SDIRA charges) to Fidelity. SDIRA charged me $100 for that transfer.

lascott

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Re: Roth IRA with P2P Lending
« Reply #7 on: February 17, 2017, 12:52:40 AM »
I've wondered if there is another more traditional type of investment account that SDIRA is able to be custodian of?  That would allow you to keep SDIRA as custodian, but slowly move out of LendingClub. I know SDIRA is meant mostly to be custodian of "non-traditional" IRA assets like real estate, precious metals, etc., but has anyone ever asked them if they would be custodian of a discount brokerage account? <snip>
This page would indicate so: https://www.sdiraservices.com/ira-resource-center/investment-options/
Tools I use: (main) BlueVestment: https://www.bluevestment.com/app/pricing + https://www.interestradar.com/ , (others) Lending Robot referral link: https://www.lendingrobot.com/ref/scott473/  & Peercube referral code: DFVA9Y