Yet, sometimes cashing in is the only option. That $500 monthly payment from an old accident may have helped with medical bills early on, but if the beneficiary lost his job and fell behind on some bills or had to make significant costly repairs to his home, a lump-sum payout of $50,000 may seem quite enticing.
Selling Structured Settlement Payments
Selling annuities, structured settlements, scheduled lottery payoffs
or other ongoing payments for cash became more popular during the
recession. But for those still feeling a cash crunch, this tactic is
seen as a potential option.
Unless
the financial predicaments are dire, most financial advisers recommend
against cashing in annuities or structured settlements. Selling off an
annuity can trigger surrender charges as high as 10 percent, and those
who sell before age 59 1/2 can also face federal taxes and penalties.
Structured settlements are attractive because they generally provide
tax-free income for life.
Yet, sometimes cashing in is the only option. That $500 monthly payment from an old accident may have helped with medical bills early on, but if the beneficiary lost his job and fell behind on some bills or had to make significant costly repairs to his home, a lump-sum payout of $50,000 may seem quite enticing.
Yet, sometimes cashing in is the only option. That $500 monthly payment from an old accident may have helped with medical bills early on, but if the beneficiary lost his job and fell behind on some bills or had to make significant costly repairs to his home, a lump-sum payout of $50,000 may seem quite enticing.
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