You may want to cash in annuity payments for a large lump sum of cash if you have a large debt to pay or want to achieve a major life goal…like buy a new home or open your own brewery (craft beer anyone?).
But how does an annuity work, specifically? Can people cash out annuity payments without the red tape? Well, absolutely!
An annuity is a kind of insurance product where you make the initial investment. Then payments are made to you on a future date (or dates if the payment schedule is broken up into installments). It’s a great option for people who are looking for a predictable payment stream. They’re often purchased as a kind of retirement plan, too.
When it Makes Sense to Cash In Annuity Payments
If you’re currently receiving payments and are asking, “Should I sell my annuity?,” RSL Funding can help determine if it makes sense to do so. We’ll get with you to discuss the benefits of selling annuity payments for a lump sum vs. any potential downsides. We’ll also chat about the type of annuity you have and whether or not you should leave your payments as-is or sell them for a large sum of cash.
You might have one of these annuity types:
Fixed annuities: These are guaranteed payouts having guaranteed interest rates. Yay for structure!
Variable annuities: These are tax-deferred retirement plan where payments are based on the performance of the investments you choose…so choose wisely.
Certain annuities: Scheduled payments are guaranteed for a set period of time. When you pass away, your beneficiary will receive the remainder of the annuity payout. Junior is happy at the thought!
Lifetime payments: The payments you receive are only valid during your own lifetime. Beneficiaries will not inherit your payout (sorry, Junior).
Life with period certain: Payouts are made to the customer during his or her lifetime or to his or her beneficiary according to the terms of a guarantee provision. If the insured dies within a certain time period, his or her beneficiary will receive the remaining scheduled payments.
Joint and survivor annuity: Your beneficiary will continue to receive payouts for the rest of his or her life after the insured dies.
Should I Cash Out My Annuity?
Often, having an annuity means paying high management fees, high taxes, and a commission fee for setup. Cashing out part of your annuity can mean having money on hand for big expenses.
Opting for a lump sum cash for your annuities may be one of the smartest decisions you can make for yourself. But as with anything that’s worth it, do your research, stay informed, and speak with one of our RSL Funding representatives if you have specific questions—we’ll let you know if selling your annuity is in the cards!
Ready to cash out annuity payments for a lump sum? Call us at web_phone.
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