There are a number of reasons people might want to sell an annuity, and one of them is debt. We?ve all heard about student loans cramping the entire economy, and this continues to be an ongoing problem with young people entering the workforce. Money that would have previously gone toward homes, vehicles, and more is now going toward paying off an overwhelming amount of debt — and debt that can?t be dismissed in bankruptcy court, making it difficult for many individuals to move forward.
On average, American adults will owe $11,250 in student loans — this is quite the burden considering that even with monthly loan payments of $200 to $300, it will take many years to pay this off — and that?s before you consider the effect of interest, which continues to add up over time. And on top of that, this is only the average. While some Americans are lucky enough to have few or no loans thanks to scholarships, many owe far more by the time they graduate, especially if they opt for graduate school. By that point, the amount of money owed can quickly move past $20,000.
Getting out of debt is important for moving your life forward, but it isn?t always easy, that?s for sure. If you have an annuity — whether it?s from an inheritance, lottery winnings, or a settlement — you may be frustrated to constantly get this money inch by inch rather than all at once. On the other hand, you?re likely aware that getting cash for an annuity will cut into this amount overall — companies that offer this tend to take 10% or so of your overall amount.
For this reason, it?s important to keep in mind that getting your money now can prevent you from accruing more debt in the future. Take your student loans for instance. If you were able to pay them off now — either completely or a majority of the amount — you wouldn?t have to worry about paying 3% interest (or however much) on your loan for a decade or two into the future. This can more than make up for the money you lose when you get settlement money now.
Similarly, there is the possibility of investing your money in the stock market. Annuities don?t tend to earn you much money over time, if any — meaning that against the effect of inflation, you?re actually losing money. When you choose to sell an annuity you have more power to make money from your money.
If you want to sell an annuity, you need to keep the future in mind. If you don’t want to stay in debt forever — maybe now is the time to finally make a change.
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