Whoever said that money cannot buy happiness has obviously never been in a financially dire situation. While nearly all Americans would love to not worry about money, many of us are unable to do so thanks to debt. House payments, student loans, medical bills, and credit cards are all responsible for making our lives harder; many people with outstanding debt feel trapped or helpless and may face bankruptcy. To better debt, we must first understand how one falls into these kinds of money traps.
How Debt Cripples Americans
The American economy has had a rough couple of years. Over the past 12 years household income has increased by 26% — unfortunately, the cost of living too has increased by 29%, making it difficult for many hardworking Americans to cover their expenses. The average household in the United States carries $15,355 in credit card debt and $129,579 in total debt; again this can come from a combination of irresponsible credit card use, high-interest home loans that many are forced to take, or outrageous medical bills that most families are unable to pay. It is difficult for those in debt to get out thanks to high interest rates; the average household pays a total of $6,658 in interest every year. Getting out of debt takes a good deal of skill or luck — thankfully for some luck may be on their side.
Getting Lucky
Many people have played the lottery in the hopes of curing their financial woes; a select few lucky individuals have been able to do just that. While winning the lottery can certainly be the answer many are hoping for, the logistics and details behind lottery winnings will be an additional test for those looking to get their money. Many people choose to have their lottery winnings paid out in the form of an annuity as this will result in a larger sum over time. Winners have to consider that off the top, the federal government will withhold a quarter of those winnings for tax purposes while state taxes may claim up to an additional 9%. Despite expectations, the actual payments for the Mega Millions and Powerball lotteries pay an initial payment with 29 annual payments that increase by 5% every year — for those in debt, these payments may not be substantial to get out of debt which is why almost half of all lottery winners still work after winning the lottery. In addition to meager payments and tax withholding, lottery winners face annual maintenance fees amounting to 2-3% and early surrender fees for those that attempt a withdrawal within the first five or seven years of establishing their annuity. It would seem that in many cases, the luck of a lotto winner may have run out — thankfully there is a way to get cash for annuity payments.
Selling Your Annuity
There are a number of loan businesses that specialize in offering cash for annuity payments. The lotto winner essentially sells some or all of their remaining annuity payments in exchange for a lump sum of cash that they can use to pay off bills, buy a boat, or do whatever they want with. The lump sum of cash for annuity payments could be just the thing that many households need to get out of debt and get off on the right foot forward. Many of these companies that offer cash for annuity payments are able to offer professional financial consultations to work with each individual’s unique needs; this is helpful as they can help determine what lottery payments the individual should keep and which ones to sell. Although these businesses are unable to offer lotto winners 100% of their payment at a single time, many lotto winners realize that they are constantly losing money by having an annuity and just want a lump sum on the spot. With a little bit of professional advice and strategy, anyone can emerge from the lottery feeling luckier than they were by selling off their annuities for the lump sum of cash that they needed all along.