An annuity is an insurance product that gives you a series of regular disbursements. The annuity is funded by regular lump-sum payments that either you or another entity paid into it. Annuities are designed to provide a steady stream of income and are mostly used as a form of retirement fund.
However, annuities can be fairly complex to understand. There are several types of annuities. The annuity amount can vary drastically. Unfortunately, there are some annuities that may have steep surrender charges for early withdrawal or contract opt-out.
Understanding the annuity thoroughly is the best way to ensure that you don’t end up in a poor-value annuity. However, there are times when you have no choice but to stick with it. Unless you win the lottery or come across a large sum of cash, it can be difficult to live the remainder of your life with paltry weekly payouts. To fix it, there are a couple of things that you can do.
If it no longer meets your needs, sell it
It’s actually possible to get cash for annuity payments if your financial situation changes or you no longer need the regular payments. You can sell current or future payments for a lump sum of cash. There are also options to sell it in portions or in its entirety. If you sell it all at once, then you’ll forfeit future payments. Moreover, you can choose exactly how much of the annuity that you want to sell.
The process is usually fairly simple. You can speak to a financial advisor that will consult you on the selling of your annuity. This will help you understand whether selling your annuity is actually worth it or not. The steps usually go like this:
You look for different buyers to find the best deal or options. Ask for a quote and consider it. Next, consult with a financial planner to see if it’s a good deal and fits your financial circumstances. You will need to complete and submit some paperwork. Finally, you receive your money.
The process is a bit more involved than this. However, it’s a good general outline of what you should expect if you want to get rid of your annuity.
Why should I sell my annuity?
Selling your annuity allows you to receive lump sums of cash that help build a better quality of life. If the weekly or monthly payments you get aren’t worth much or are no longer needed, then selling for an immediate lump sum of cash can give you a lot of funds to finance something, help pay off student loans, buy a house or even start a business.
It’s never too early to learn more about income options after retiring. Consider that you generally get more out of it the earlier you pay in. Do plenty of research on this topic to ensure that you understand what you’re getting yourself into.
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