The Pros and Cons of Annuities

Get cash for settlements

There has been a lot of discussion in the news in recent years regarding structured settlement annuity payments, lottery annuity payments, and retirement plans involving a basic annuity purchase. And if you’ve been paying attention to these discussions, you’ll know that most people have quite a few criticisms about annuities — and most people regret having purchased one in the first place.

Luckily, it’s possible to sell annuity payments safely and securely, so that you get a lump sum of cash for annuity payments.

Here’s just a basic guide to the pros and cons of these confusing things — hopefully giving you a better understanding of why, if you happen to have an annuity, it might be a great choice to sell your annuity payments all at once:

Pros of Annuities

In the confusing and unstable world that is the U.S. post-Recession, it’s easy to understand why people are running to annuities for a secure retirement “investment.” For many people who lost their entire retirement plans and pensions during the Meltdown of 2008, an annuity may still be a stable source of income.

Additionally, there are a variety of different types of annuities that you can choose from, in order to give yourself the best chance at financial security in the future. Your money will stay untouched in its account — it won’t be taxed — and you’ll have the peace of mind in knowing that you’ve saved up.

Cons of Annuities

The biggest problem with annuity settlements is that you can’t touch your money until a certain number of years have passed (or until you reach a certain age) — so it’s still your money, but you can’t use it.

Additionally, unlike other forms of investment, annuities won’t gain interest over time and therefore won’t really grow unless you add to the amount. In fact, most annuity companies charge annual fees and will actually take some of your money out of your account to cover this cost. When you finally take out your annuity, let’s say 10 years from now, you’ll find that it’s actually worth less than when you put the money in the account because it doesn’t adjust for inflation.

If you’re thinking about purchasing an annuity, or even if you’re thinking that you want to sell annuity payments, the most important thing is to consider whether it’s best financial decision for you.

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Laura

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