Three Things to Understand About Getting Cash for Your Annuity Payments
There are many reasons that you may want to get a lump sum of cash instead of your annuity payments. Your financial circumstances may have changed, and it no longer beneficial to receive your money as payments, or perhaps you simply inherited this annuity, and you would prefer to have the cash. Whatever the circumstances, there are things you should understand about selling your annuity payments. The following are three of them.
The cash you receive will vary
Not every annuity is the same, so the amount of money you can get from selling one is not fixed in some manner prescribed by law or convention. Depending upon the nature of your annuity, you will be given an offer. If you don’t like the offer, you can request an offer from another firm that does this type of work, but you need to understand that regardless of what you believe the cash amount should be, it may be quite different.
A contract must be drawn up and agreed to
If you decide to accept an offer, it will still take a few weeks to get your money. A contract that documents the details of the selling of your annuity must be created, and then you need to sign the contract. After this, the paperwork will need to be processed. Those paying your annuity will need to be informed of the sale. The bottom line is that it can take at least two to three weeks to get the money for your annuity, so it is important to know that this is not an emergency source of cash, at least if you need to money in the next day or two.
Should you sell your annuity?
Of course, to a large extent, this is a personal decision that only you can make, because each person’s finances are different. However, in general, the older you are, the more it makes sense to hold on to your annuity. These payments represent a secure source of income, and as you get older, it becomes more difficult to earn money, especially in retirement. The younger you are, the more selling annuity payments for cash will make more financial sense. You still have plenty of time to build your retirement fund.
Whatever you decide to do, make sure you take the time to understand how much money you will receive, and whether selling your annuity is beneficial to you, both for today and many years in the future.