If you’ve been unexpectedly hit with financial hardship, you’re likely considering the options you have before you in order to get back on your feet. Many people seek out a cash for annuity transaction as a way to immediately put a lump sum of money into their pocket.
Not sure where to get started with your annuity cash-out? To help you understand the process more thoroughly, here are three of the most commonly asked questions about seeking cash for annuity in the United States:
What is an annuity?
By definition, an annuity is a contract made between you and your insurance company, in which you make a one-time payment, or series of payments, that will be paid back to you in regular disbursements sometime in the future. You can set your annuity payments to be disbursed to you over a pre-determined span of time — 25 years, for example — or have the payments continue until your death.
Annuities are a great option for those who will be retiring in a few years. This is because they can provide a steady source of income throughout one’s retirement. Additionally, the money in your annuity can grow over time on a tax-deferred basis, making this a great investment option for the future.
Can I sell my annuity?
Like 401(k) contributions, the funds you put into your annuity can only be withdrawn without receiving a penalty after you reach 59.5 years of age. However, if you are still in your 30s or 40s and want to get out of your annuity now — whether you’ve decided an annuity isn’t the right choice for you or you’re experiencing financial hardship — you may be able to sell your annuity and get back the cash you put into it.
As long as your annuity isn’t contained in an IRA or 403(b) or 401(k) account, you can usually sell your annuity for cash on the secondary annuity market. In many cases, you can actually receive a lump sum comprised of a portion of each annuity payment while still receiving the payment itself later on — just at a reduced sum. For example, if you’ve set up a monthly annuity payment of $4,000 that’s been set to continue for another 20 years, you can sell your right to half — $2,000 — of each payment in exchange for a lump sum. You’ll still get all the money you put into your annuity, but you won’t have to wait 20 years to get it.
How do I get cash for my annuity settlement?
Selling an annuity settlement for cash can be an intimidating prospect, especially if you’re not accustomed to complex financial transactions. But don’t worry — with this six-step guide to selling your annuity, it will be easier than you thought possible to get cash for annuity:
Step 1: Thoroughly read your annuity contract
Step 2: Find out how much you can withdraw without penalty
Step 3: Understand the cashing-in process
Step 4: Choose the right cash for annuity company
Step 5: Seek legal consultation for all documents
Step 6: Get cash back for your annuity
It shouldn’t have to be difficult to get the money you want out of your annuity or structured settlement. When you follow the aforementioned steps, selling your annuity can be a quick, easy and ultimately successful process that will put money back in your pocket.