Annuities are great. Don’t get me wrong. But for your annuity to give you the punctuated income that you desire, a few other things have to go right. Annuities can be set up a lot of ways, but they’re usually in place to provide steady income for you during your retirement. We don’t always like to talk about these things, but retirement is a time when a lot of things can go wrong in your life. You or a partner might get sick. You may find that your income is not sufficient for your lifestyle. Side income that you may have through a part time job may be suddenly lost. The possibilities are various, but it’s easy to see that an annuity may not be the solution that you once thought it was.

Just to be sure you’re with me, an annuity is a fund that you pay into for years, to be paid out to you monthly upon retirement, or some other time when you’d need the money. So what happens if you have gone through all the trouble of setting up an annuity, only to find that you need the money back all at once? There are plenty of companies that can give you help with selling your annuity. The process is actually pretty convenient. Of course, you won’t get a dollar for dollar lump sum, you’ll lose some of the value of your annuity, but that makes sense given the convenience offered and the need for the company you’re working with to make a profit. Here are some other things to consider.

1)   Shop around. You want to make sure you’re making the most money you can for your annuity. There isn’t some fixed rate that these companies have to pay, so you’ll save money by taking the time to get a handful of quotes. I would recommend no fewer than 5.

2)   Make sure you qualify. Not just anybody can sell an annuity for any reason. The state courts make the final decision. They see, rightly, that your annuity is steady money for you for a long time. In order to sell it, you’ve got to prove to them that you’re not going to spend the money on something frivolous, like a cruise, vacation, or a new hot tub.

3)   Spend the money on something beneficial. The purposes that you can be allowed to sell an annuity for include, but are not limited to: starting a business, buying a new house, paying off a high interest loan that is bleeding you dry, etc. You can see that implementing any of these strategies might benefit you more, in the long run, than the financial trickle of an annuity.

There are other little details to this process, but whoever you work with will make these clear. I urge you to do your homework and speak to a financial professional before selling your annuity. An advisor may be able to point out some detail that you might miss. But if the deal looks good, go for it. It can make a big difference to you over time.

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