Sell Your Annuity Payments
In the face of an investment opportunity, large amounts of debt or unexpected medical expenses, selling part or all of your annuity may give you the financial freedom you need.
Lump Sum for Your Annuity
Annuity owners invest in an annuity agreement for financial stability after retirement or to secure their families' futures. But when life throws a curveball, selling annuity payments could be the short-term solution for long-term debt and unplanned expenses.
Whether that includes buying a new house, paying for a new car, paying for college tuition or even balancing medical expenses, cashing out a portion of your annuity could be the solution to avoiding unnecessary debt.
Important: Selling an annuity comes with transactional fees, interest fees, and other costs. It can also reduce the number of future payments you or your beneficiaries receive. Consider all factors before deciding.
Reasons to Sell Annuity Payments
There are plenty of reasons for selling annuity payments. Whatever your reason, it's important to know your options.
Losing a job
Investing in a business
Paying medical bills
Paying off debt
Paying for school tuition
Buying a new home
How to Sell Annuity Payments - Your Options
Annuity owners have several options when selling their payments.
Entirety Purchase
The most common option. Sell the annuity for the full term of the contract. This provides a lump sum of cash in hand but eliminates future income payments.
Partial Purchase
Sell a portion of your annuity for a temporary period in exchange for a lump sum. After that period, payments resume for the remainder of your contract.
Lump Sum Purchase
Sell a specific dollar amount from your future payments. If you need a set amount for a specific expense, that amount is taken from your future income stream.
Annuity Sale Factors
When considering whether to sell your annuity, consider all the factors involved with the sale.
Discount Rates
You will not receive the full amount your annuity is worth. The discount rate determines how much less you receive in exchange for getting cash upfront. The lower the discount rate, the more money you receive.
Annuity Value
Factors impacting value include how much you wish to sell, current and predicted economic conditions, fees your annuity carries, and frequency of payments.
Tax Implications
Some annuity sales can trigger tax liability, especially if part of a qualified retirement plan. Structured settlement transfers are generally tax-exempt. Commercial annuities may be subject to taxes or early withdrawal penalties.
Pros and Cons of Selling an Annuity
Before making this significant financial decision, weigh the pros and cons carefully.
Pros
Instant Cash
Get efficient access to funds versus waiting years for payments.
Less Debt
Pay off college loans, home repairs, or other debts.
More Options
Multiple ways to receive cash while keeping some future payments.
Cons
Reduced Future Income
Selling early affects long-term retirement savings.
Buyer's Remorse
Easy access to cash can lead to unnecessary purchases.
No Full Price
Transactional and withdrawal fees reduce your lump sum.
Selling My Annuity: FAQs
Let CBC Help
Our team of experienced, caring professionals will make the process of selling some or all of your structured settlement or annuity payments easy.