Why Selling Your Annuity Is a Good Option


Lottery payments

What to know about selling your annuity
Winning the lottery or getting a settlement is not all it is cracked up to be. Sure the money is nice, but the system is so complex that it won’t just let you have the money. In order to win the game, you have to play by the rules. These are the rules when it comes to managing and budgeting your annuity or structured settlement payments.

Hidden Fees
Although “hidden” is a bit more mischievous than intended, many are surprised to learn that the U.S. government automatically withholds up to 25% of lottery winnings for tax purposes. There may be additional fees depending on the kind of annuity you have: for instance a variable annuity’s ongoing investment management and other fees can cost nearly 2-3% per year. Furthermore, any withdraws made before a certain age or length of time has passed could end up charging you with surrender fees that can take up to 7% of your investment or more.

Payment Plans
In most cases, you have choices when it comes to how you wish to be paid for your annuity. A certain length of time (between 10 and 20 years) or payments that will continue as long as you or your spouse are still living are the two most common payment types. The Mega Millions jackpot has an “immediate” annuity, where you ought to receive a first payment within 30 days, followed by 29 annual payments that increase by roughly 5% each year.

Selling an Annuity
So now we see that although the money belongs to you, you are not allowed to use it willingly. In such cases, selling your annuity may be the best option to maximize your return quickly. An annuity settlement cannot guarantee you 100% of your earnings, but it can give you cash for annuity payments quickly. For those who are tired of waiting for lottery payments, selling your annuity is the quickest, easiest option to get the most out of your money.

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