Looking for cash to stay afloat? You’re not alone. There are those who have a need for money and will turn to some unusual places to get it.
Selling annuities, structured settlements, scheduled lottery payoffs or other ongoing payments for cash became more popular during the recession. But if you’re still feeling the cash crunch, this tactic is 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.
Want structured settlement cash now? Not so fast!
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