Annuities pay out income over a regular schedule, usually for years or even a lifetime. These scheduled payments are often used as a source of income in retirement. Once you have your money in an annuity, you cannot withdraw it early without paying fines. Selling your annuity payments in exchange for cash can benefit your financial stability in many ways.
You will have cash on hand when you need it.
Once you have invested in an annuity, the payments do not start until the date you set. The annuity pays out long term, so your income is steady and scheduled over a certain period. This is a comfortable arrangement if you need long-term income, but it is less convenient if you need funds to cover expenses now. Selling your payments can get you cash for your annuity to use however you need it most.
Your payments won’t lose value due to inflation.
Annuities usually cash out in fixed amounts over time. These amounts remain constant, but the value of money does not, and your annuity payments could decrease in value due to inflation or other economic change. Getting a lump sum for your future annuity payments helps you use your funds while they are most useful to you.
You can sell part of your annuity and keep the rest.
You are not obligated to sell the entirety of your annuity or structured settlement. The safest method is to sell enough of your payment stream to cover your current expenses and leave the remainder. This allows you to keep some of your future payments while still having a lump sum to use however you need it.
You won’t face early withdrawal penalties.
Withdrawing from an annuity before you reach the age of 59 1/2 means facing steep penalties. A 10% early withdrawal fee followed by income tax on your investment earnings can take a significant portion of your money before it reaches your hands. Selling your annuity for a lump sum, however, avoids that penalty while still giving you cash without waiting for your payment schedule.
Novation Settlement Solutions is here to help if you need cash for your annuity. Use our online form or call 1-888-610-1849 to get a free quote today.
*Novation is not a financial advisor and/or consultant and strongly recommends that you speak to a lawyer and/or accountant before making any significant financial decisions.