If you currently own an annuity and you’re looking for a way to receive a lump sum payment instead of waiting around for smaller annuity payments, selling your annuity could be a great option for you.
Selling your annuity is an easy way — and a legal way — to get around your annuity contract without actually breaking it. You could end up paying up to 10% of your annuity money in fees if you decide to break the contract and withdraw the money earlier than specified, but when you sell annuity payments instead, you’ll be able to get as much of your cash as possible.
A lot of people think that annuities are great investment opportunities, and a lot of this has to do with taxes: unlike other forms of investing, annuity accounts aren’t taxed until the money is taken out. In that way, it seems as though you’re getting the most money possible by avoiding Uncle Sam. Unfortunately, it doesn’t actually work out that well. Not only is the annuity subject to annual maintenance fees, but the value of the money depreciates over time and it’s worth less when you withdraw the payments than when you first invested them. A structured settlement annuity, or even a lottery annuity, works in a similar way.
It’s all too common that Americans decide to purchase an annuity but find out later that it’s really not the best financial decision — and then they feel trapped in this agreement which isn’t doing them any good! If you’ve found yourself in a similar situation, selling your annuity might just be the best option on the table.
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