Annuity Payments can turn into a Lump Sum of Cash
Annuity payments are generated from an insurance settlement and provide a consistent cash flow of income upon retirement. These structured settlement payments are typically paid either for a specific period of time such as 10 or 20 years, or for the lifetime of the Annuitant.
Annuity payments are subject to income tax regardless of whether they are received monthly or in one lump sum. Additionally, these disbursements might be subject to fees and expenses including mortality and surrender charges, and management fees.
There are many types of annuities including fixed, variable, deferred, immediate, fixed period, lifetime, qualified, non-qualified, single premium and flexible premium. When buying annuities there is no limit on the amount you can invest. Before investing in annuities it's important to understand the different types of retirement plans and determine both your actual and potential financial needs.
Fixed annuities are purchased through insurance companies at a guaranteed rate. This means you will not lose money on your investment. Fixed annuity payments are paid at a fixed dollar amount or interest rate regulated by state insurance departments.
Variable annuities are invested in a fund similar to a mutual fund. Annuity payments are based on the performance of the fund and will vary from month to month. Variable annuities are regulated by both state insurance departments and the federal Securities and Exchange Commission.
With deferred annuities, Annuitants are typically able to withdraw a small amount without penalty. However, should you require a large sum of money, early withdraw can result in a substantial penalty and other fees. In this case, selling your pension for a lump sum of cash might be your best option.
Immediate annuities offer income immediately after investing in the fund. There are different types of immediate annuities; however, the most common is the single-premium fixed immediate annuity. With this type of investment, you pay into the fund with one lump sum and receive a specific dollar amount for the remainder of your life.
In addition to the various types of annuities you'll also want to determine which payment option best suits your financial needs. A fixed period annuity provides income for a specific amount of time. Disbursements are based on the amount paid into the fund and the length of the payout period. Typically, fixed period annuities are paid out over a period of ten or more years.
Lifetime annuities provide income for life and are a good option for married couples, as the annuity payment continues when one spouse dies. Lifetime annuities are the only financial product that provides this option.
While annuities serve an important role in retirement planning, they are inflexible and not intended for short-term investments. Early withdraw can result in substantial financial loss and over-taxation.
If you are invested in annuities and in need of cash, Simon Volkov offers a wide range of options to solve your financial dilemma. You can transfer your annuity rights and receive a lump sum cash payment. Typically, this transaction occurs within three weeks from the date we receive your paperwork and agree on terms.
To get started, simply fill out the secure Annuities Form and click on Structured Settlements. Upon receipt of your information, one of our qualified consultants will contact you to further discuss your needs. Your information will be held in the strictest confidence and there is no obligation to consult with our specialists. We look forward to serving you and assisting you throughout the process.
Published on August 28, 2007 at 10:33 PM