If you have an annuity, you may be considering selling your monthly payments for cash. Annuities are generally meant to serve as retirement savings vehicles, but many people who receive them find that they don’t really need them anymore in their old age and decide to get rid of them once the penalties from doing so are gone. If you are one of these people, then you should know that there are several reasons why you should sell your annuity payments for cash instead of simply closing out the account and letting the money sit there until the end of time or giving it to someone else in your family when you die.
Are you one of the 250,000 people currently selling annuities?
If you're currently receiving payments from an annuity, it's possible that your financial advisor may have encouraged you to sell those payments for cash. There are a number of reasons why your advisor might have done this, and in this post, we'll explore the most common.
Want to sell your annuity payments for cash?
In the event your financial needs change, there is no better time to sell your annuity payments for cash. Need to generate a quick source of emergency funds? Selling your annuity payments for cash may be the perfect solution. With many types of annuities available on the market today, it can be difficult to find one that fits all of your current and future financial goals. When you sell annuity payments for cash, you’ll have access to lump sum or monthly income, depending on what type of annuity it is. Sellers also have more control over how they want their payout structured which will provide them with much more flexibility when it comes to their retirement savings plans.
Interest rates are at an all-time low
The base interest rate in Australia is at a record low of 2.5%. When you sell your annuity payments for cash, you are able to benefit from this low-interest rate by reinvesting the money into another investment with higher potential returns. By investing this way, you could make more money in the long run than if you were to continue with your annuity plan. It’s important to remember that selling an annuity means that any future returns will be uncertain and less guaranteed, so it’s important to ensure that any investment is taken care of properly and has plenty of time to grow before cashing out.
Are you concerned about rising interest rates?
Rates going higher has the opposite impact on certain investments. A short-term annuity for example is an investment that will pay you a set amount every year. It's traditionally a good option if you're retired and need a steady income, or if you're saving for retirement in order to supplement your pension. However, rates have been historically low and so this investment might not be as stable as it once was. If interest rates were to go up and stay up, the value of your money would decrease, and then you could end up losing more than half of what you paid in insurance premiums over time. When you Sell Annuity Payments for cash with Funds4Freedom instead, these concerns disappear and there are other benefits too!
Here's What You Need To Know Before Selling Your Annuity Payments For Cash
The cheaper home loans will go up but you're coming out ahead. Interest rates can't keep dropping. Interest rates on mortgages are lower than they've been in decades, but the days of them going down are over. You'll pay more to borrow money, but it'll be worth it to get out from under a payment that's guaranteed to rise. Selling My Annuity