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When Should You Not Cash Out Your Annuity?
You should not cash out your annuity when it's not in your
best interest. Here are 3 reasons it might not be in your best
interest; it's too soon, you don't have a good enough reason, it
will cost you too much. Every day someone cashes out their
annuity or settlement when it might not have been in their best
interest. It's an easy mistake to make when the call of money and
burden of financial stress is weighing heavily on you. But read
carefully and maybe you can avoid digging the hole deeper.
If you are a minor, or the parent of a minor trying to cash
out an annuity, it's too soon. Courts will rarely approve an
advance of a minors settlement except in cases of extreme need. A
guardian will need to be appointed to make sure the transaction
is in the best interests of the minor and not the parent. Another
way it can be too soon, your payments are too far away. $100,000
due in 2025 is not going to get you $100,000 today. In fact, you
won't even get $25,000. The payout date is too far away.
Unless you have a good enough reason. If you feel secure that
your $25,000 dollars will yield over the next 20 years a return
equivalent to the $100,000 you would have received, than maybe
it's not such a bad idea. Plenty of courts around the country
will be very interested in your reason for acceleration your
settlement or annuity payments. Judges do their best to evaluate
for you whether the transaction is your best option. Turning in
your monthly payments to buy a new car may not be the best idea.
Buying a home, attending school, averting financial disaster,
keeping a home, important medical needs, all are great reasons to
cash in future payments. Anything else deserves a second look and
more serious consideration.
What also deserves serious consideration is the bottom line.
If you have to give up 50% or more of your annuity's value is it
worth it? That's a very expensive purchase you are making when
you give up $100,000 to get $25,000. And if your $25,000 buys you
a car that depreciates and breaks down in 5 years, you have so
little to show for your money. I think investing in start up
businesses, vacations, recreational vehicles, and entertainment
items are often questionable reasons to cash in structured
settlement payments.
The courts, the settlement cash out companies, your family and
friends will all have their opinions as to whether you should get
an advance on your future payments. But the risk and
responsibility to make the best possible choice rests on your
shoulders. Ask yourself if what you are getting is worth what you
are giving up. There are great reasons to get your money sooner
rather than later, but there are also times when cashing out is
not in your best interest.
Jason M. Rigler
JasonR@ppicash.com
http://www.PPICash.com
Committed to educating future payment recipients in the good,
bad, and ugly of accelerating payments.
MORE RESOURCES:
Selling structured settlementsInfos Jeunes France, France - Nov 25, 2008Alternative arrangements know as structured settlements were created in the 1980's. Under these arrangements the beneficiary would receive cash structured ... |
From comments: lawyer referral feesOverlawyered, NY - 22 hours ago... by marketer lawyer advertising (with companies providing cash in exchange for assignments of lawsuit structured settlements also prominent there). ... |
Father paved way for Street's debutDenver Post, CO - Nov 17, 2008... and Nixon Coming" — on Monday, at the Austin, Texas, offices of The James Street Group, a financial firm that specializes in structured settlements. ... |
Structured-Settlements - Google News
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When Should You Not Cash
Out Your Annuity?
You should not cash out your annuity when it's not in your
best interest. Here are 3 reasons it might not be in your
best interest; it's too soon, you don't have a good enough
reason, it will cost you too much.
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