Traditional IRA : Vanguard vs Lending Club

[Rhoon]

Hi Everyone,

I have a question I'd like to get some feedback from the group on. I just recently changed jobs and I'm eyeing what to do with my 401K from my previous jobs. It's roughly about $48K and I've been toying with ideas on where to put it so I can add more money to it. I already have a Roth, so I'd like to leverage the benefits of a Traditional IRA on this conversion.

My question comes down to this: Am I better off putting the money in Vanguard index funds or is Lending Club a viable option?

My concerns on either side are: 1) Stock market volatility, though I'm subject to that where the funds are currently sitting (Fidelity); 2) Ability to put all $47K out on the street to loan money. I'm pretty conservative with my current LC account, but I don't have a long enough personal experience with it to judge if it's stable enough to put such a large chunk of money.

[GGNoob]

Personally, I decided against LendingClub for my IRA because it just hasn't been around long enough. I didn't want to risk my retirement on a new type of investment (new to us normal people anyhow).

Also, I'm now doing a Traditional IRA instead of Roth, to reduce taxes. I don't want that money in LendingClub because it would be hard to do Traditional to Roth conversions later on. I'd either have to depend on the secondary market to sell notes, or let my cash sit idle long enough to build up enough to roll over. With Vanguard, I can simply have them transfer X shares of an ETF to a Roth IRA, without actually selling anything.

My vote is for Vanguard.

[Interest Compound]

I'd go with Vanguard. Maybe after Lending Club has been around for a recession or two I'll feel more comfortable with it. Until then, LendingClub's comparatively huge fees just don't seem worth it.

[Rhoon]

Thanks for the thoughts and feedback. The tIRA -> Roth I hadn't given thought to either, so very good point. After sitting on this post for a few days, I actually decided to roll it into a tIRA @ either Fidelity(where the $ currently is) or Vanguard.

I'm trying to determine how FUSEX compares to the Vanguard index funds.