Sell Annuity For Lump Sum Cash Payment
Sell Annuity For Lump Sum Cash Payment
Any investor that has been around for a while knows that sometimes things don't go as planned. Not only can you make poor investing decisions, but other personal factors also come into play. Unexpected job losses, medical expenses, accidents, and other of life's unpleasantries may place you in an immediate financial need.
With some investments, it is quite easy to pull your money out and apply it towards your unexpected circumstances. Other financial investments require a bit more to terminate and cash-out of the contract. Fixed rate annuities (as well as other annuities) traditionally fall into this category.
In order to cancel your annuity contract, you normally would be subject to sizable surrender and/or early termination fees from the insurance company. Annuities are meant to be a long-term investment that provides value to the annuitant over time. They are typically not meant to provide immediate income in a time of need.
Fortunately for investors, there is a secondary market for annuity payments that can be pursued. You have the ability to sell annuity contracts and/or payments for a lump-sum cash amount. If you financial need only requires a portion of your annuity payments to be sold, you can sell just that portion of the payment stream on the open market.
There are willing buyers looking to purchase discounted payment streams and will be eager to pick up your payments.
Understand the selling your annuity payments will still come at a cost. Not only will you be selling the payments at a somewhat discounted price, but you must also cover the spread for the brokerage company to complete the transaction. If you need is sufficient however, this may be a small price to pay. By selling all or a portion of your annuity on the marketplace, you can ensure that you have the cash necessary to meet your financial needs.
Should I Sell My Annuity Payments?
You're asking yourself "Should I sell my annuity payments?" Yes, there are companies out there that will sell your structured settlement, and give you a cash lump sum all at one time.
The thing is, can you discipline yourself, and only buy what you have to, and need, and not blow it all, since originally, your settlement was X amount a year, over 20 years.
You do get less when you take the cash lump sum, but, you get it all at one time.
Speak to a certified financial adviser and decide what you should do. This will cost a bit, but, it will be very good advice that will be worth it either way.
Deciding can be a dilemma but, you can count on that money each year, instead of all at one time.
Investing your money, if you do take the lump sum cash option, can be a good idea. Lets say you buy some CD's and you can't touch them, so, your money is safe, and sound for that length of time.
You could start up a business, if you, lets say make custom chair covers for wheelchairs, or do custom decals, or something. Investing the money in yourself in an education, or a business is just like paying yourself.
Getting that degree is something that can not be taken away from you, and you invested in yourself, so, you can make more money, and have more to save.
Setting aside money for your child's college is a good idea, or setting up a family trust, doing your will, all of those are good ideas for either option you choose: annuity payments, or the cash out option.
