When someone brings up the topic of selling your annuity, does your brain start to hurt? There are many misconceptions out there about cash for your structured settlement, and you have probably heard a lot of them. This list will help clear your mind and give you a better idea of what selling a structured settlement is really like.
Selling an Annuity Costs a Lot of Money
Variable annuities are offered by mutual fund companies who tend to charge low fees which are around 2%. There is a cost involved, but not as much as you may think. The fees vary depending on the company you work with, but most offer competitive rates, especially when you bring in the competitors offer.
Structured Settlements Hurt my Taxes
A structured settlement can save you between up to 35% on state and federal income taxes. The tax liability varies from person to person and it is best to consult a tax professional on the specifics of your case. The laws differ in various states as well.
It Takes a Long Time
While you do not receive your money that day, you do get your money within 45 days. In fact, most people receive theirs around the 30 day mark. There is no waiting years, just a couple weeks and you should receive your lump sum.
I Need to be Financially Desperate
Actually, anyone can sell their annuity. All you have to do is go before a judge who has to approve it. It is a major financial decision, so you should have a plan on what you are going to do with the money after you receive it.
I Have to Sell All of the Settlement
A company that works with you and listens to your needs will help you figure out exactly how much cash you need. From there, you can choose between a partial or full payment when selling your annuity, depending on your circumstances.
I’ll Lose a Lot of Value
Inflation will do more damage your settlement than selling your annuity. If you do plan on selling, put the money in better returning investments so you have an overall higher rate of return.
I Should Get a Loan to Payoff Debt
If you have a structured settlement and need to payoff debt, it is a better decision to sell your structured settlements. The debt will be paid off and you will not have high interest rates hanging over your head.