Investing your retirement fund wisely


Through investing wisely through peer to peer (P2P) lending, you can ensure a wealthy retirement through higher interest earned on investment.

USA and IRAs

In the USA, when you open up an IRA (Individual Retirement Account) through companies like Lending Club and Prosper, you can decide on the type of IRA you need. With a regular IRA, you are not taxed on the money you put in, but you are taxed on the money you take out. With a ‘Roth IRA’ you are charged tax on the money you put in but are not charged on the money you take out during retirement. In France for example, the retirement system works differently. If you are an active worker, your pension contribution is not invested but redistributed to retired individuals. Although private pensions in France do exist, they are a minority.

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The difference between a 401K and an IRA

A 401K is a retirement fund offered by an employer to an employee allowing a small portion of the salary to contribute towards this fund before taxes are taken off, although tax is charged when you withdraw from this fund following your retirement. Traditional IRAs are almost identical to a 401K. In the US, many companies will contribute a portion or match your contribution towards the 401K whilst you are employed with them.

Why invest for retirement through P2P lending?

US enterprises Prosper and Lending Club, UK’s Zopa and France’s Lendix all have various options allowing you to choose your risk level, with the higher risk option often reaping the best rewards financially. The risks are calculated according to the lender’s reasons for the request, their credit background, and also the anticipated duration of the loan. Through this method, you have control over your money and your future savings through self-management of investments. It is important to register for an IRA as the tax on this is less than a general investment through P2P lending.

The UK government looks to be supportive towards investing in P2P lending, and several new tax rules have been passed with alternative ISAs (Individual Savings Account) for retirement. The new law allows you to offset losses against your P2P interest when calculating taxes. has made the process of finding the best P2P lending company for your specific needs infinitely easier. If you are considering transferring your retirement funds to P2P lending, where you can have more control over your money, then as a comparator site, should be the first place you look.