Did you know that you can open a free individual retirement account (IRA) on Lending Club? It’s true. So if you’re craving an alternative to target-date mutual funds (and stocks, in general), consider adding social lending to your retirement plan.
What is Lending Club?
Lending Club is a peer-to-peer lending network that lets people like you and me lend our money to other individuals. To learn more, check out this Lending Club review or more about social lending networks.
Why a Lending Club IRA?
Lending Club’s average annual return is 9.5%. By their calculations, a single $15,000 investment could grow to over $250k in 30 years. Not shabby. Yes, Lending money is risky, but so is the stock market. And you have to consider that some economists predict stocks may not continue to offer the 10% 25-year average annual returns of decades past.
How It Works
You can open a Traditional IRA, Roth IRA, SEP IRA, or Simple IRA account at Lending Club, and you can rollover another IRA or an old 401(k). Once you have opened your account, you select how aggressively to invest and Lending Club invests your money into hundreds of indiviudal loans, often in increments as low as $25.
What do you think? Do you invest in Lending Club? Would you consider using Lending Club as part of your retirement strategy? Why or why not?