You just received your regularly scheduled annuity payment and after paying off all of your bills, you barely have money leftover.
Wouldn’t it be nice to get a lump sum payment to help you get back on your feet? No, I’m not talking about taking out a loan. I’m referring to selling annuity payments!
Not sure if this is the right decision for you? Keep reading to learn details to help you decide.
Reasons to Sell Annuity Payments
Selling annuity payments starts with a specific need in mind. Funds locked into an annuity offer a solution for those with pressing emergency needs.
Why sell your annuity? The most common reasons for selling annuity payments are to:
- Make a major life purchase
- Pay off credit card debt/improve credit score
- Pay for a funeral
- Pay off medical bills
- Fund a divorce
- Finance college education or pay student loans
The sacrifice of giving up long-term income money for money now needs to pay off in the future.
How to Sell Your Annuities for Cash
There are three ways to sell your annuity for cash. You can choose a partial sale, lump-sum sale, or entirety sale.
We Pay More Funding offers all options so you can choose what to do with your payments. Let’s discuss them.
Partial Sale
A partial annuity sale refers to selling your payments from the annuity for a set period of time. This means you aren’t selling all of your future payments.
A lot of annuities cover you for life so if you are in your 40s or 50s, you can sell payments for five years. After the five-year period ends, you’ll resume period payments from your annuity.
The benefit of this option is that you aren’t sacrificing all of your annuity payments. You’ll instead put them on hold for immediate cash to meet your financial needs.
Lump Sum Sale
A lump sum sale is like a partial sale because you can receive payments from your annuity at a future date.
Instead of selling your payments for a period of time, you are selling a lump sum to receive a certain payout. For example, if you need $50,000 for a major life purchase, you can perform a lump sum sale for that amount.
The option provides you with more control over the cash you receive. A partial sale might lead to a less exact payment amount.
Entirety Sale
Selling an annuity in its entirety means giving up the remaining interest in your contract. You get the money that is left to be paid out from the contract with no future payments.
This is the best way to sell an annuity because no negotiations are required. An entirety sale can help you complete other financial goals.
Selling Annuity Payments: Is It Right for You?
Selling annuity payments can help you make a major life purchase, pay off debt, and much more. While it is a great way to get some fast cash, it isn’t always the best option.
Consider your personal situation and consult with a financial counselor before making a decision. Using the information in this guide, decide if you should sell annuity payments and how to if you decide the answer is yes.
For more financial advice, check out the other articles on our blog.