So, you have won a lottery or a large lawsuit, now what? Most lottery jackpots pay their winners one lump sum and then follow that with annual payments. A Mega Millions $5 millon jackpot winner should expect to receive one check for about $750,000 followed by 29 annual payments. Each will be about 5% more than the one before it. While that is not a small amount of money, many people prefer to get cash for an annuity now and sell right away.
Follow These Steps to Get Cash for an Annuity Now:
- Review your finances. Take your financial paperwork to someone you really trust and go through it to see if selling your annuity is the right thing for you to do. Look at your situation. You will have to have a good reason to sell as the court does have to approve your sale. Common reasons people sell their annuities are preventing bankruptcy, starting a new business, paying for someone’e higher education or medical costs and paying off debt. Whether you need help with living expenses or need to eliminate debt, there are many reasons the courts will permit a sale to allow people to get cash for annuity now. Keep in mind that most Americans are in debt. Nearly 62% of us do not have anything for unexpected costs that come up. Another 66% live paycheck to paycheck. Almost one quarter of all people in the United States will have a medical emergency that will wipe out their savings.
- Have your annuity evaluated. What is the value of your annuity? Do you know? Before you can sell it, you need to know how much you casn get for it. Talk to financial experts that you know you can trust about what it is worth and how much you can get. Anytime someone sells an annuity, they should know that they will receive less money in the long run by getting cash for an annity now than they would receive if they got the annual payments. This normally comes to between 8 and 14% less than you would if you waited. Have the annuity evaluated so you can make sure the quotes you get for it are fair.
- Research the tax ramifications of selling an annuity. Annuities come with an option to defer the tax payments but the payouts you receive are taxable. Basically, while the money sits in an account and grows it is exempt from taxation but if you want to get cash for an annuity now, you have to pay taxes on the money you receive. This is taxed as any income would be taxes. You will need to show the judge who appoves your sale that you understand all of the tax implications of this kind of sale so take your time learning about it.
- Find someone to buy your annuity. There are a lot of companies out there who are ready to help you get cash for an annuity now so take some time and look into more than one. Many experts recommend talking to and getting quotes from no fewer than five different companies. You can check all of their credentials and try to find out what past clients said about them and the process. You should ask your friends and family if they know anyone who has ever sold an annuity. More people than you might expect have and word of mouth is always the best way to find a company to buy your annuity.
The vast majority of people who choose to sell their annuity payments report being happy with that decision. Whether you have cash needs or want to get out of debt, this can be a great way to invest in your and your family’s future. Take your time researching different companies and reviewing your best options. After looking into things, you may find that if you get cash now for an annuity, you can greatly improve your life and that of the people who are nearest and dearest to you. There is no wrong way to handle this just do what is right for you.