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Fixed payments, variable payments, annually, quarterly, doesn’t matter. Let us help you get YOUR money in your hands now instead of waiting. Be in control of your future instead of letting your future control you.

 

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Annuity Payments – Different Types and What They Might Be Worth

When it comes to structured settlements and other annuity payments, there are a lot of different terms that are thrown around that, if you aren’t familiar with them, can be confusing and intimidating. We want to take the guesswork out of this for you and help you figure out how to take that monthly payment and possibly turn it into a lump sum payment that you can use. Some people might even think the terms “structured settlement” and “annuity payments” are the same thing but keep in mind the structured settlement is the event that takes place to set up the actual payments and the annuity payments are the actual payments made over time as described below.

Now an annuity is simply any series of payments made at fixed intervals of time. Annuities can be something as simple as monthly insurance payments, mortgage payments, or even pensions. Typically they are classified by their payment terms such as weekly, monthly, annually, etc. What we are going to focus on here is anniuty payments that you receive for things such as powerball or mega millions winnings, an insurance settlement, or any payments that you would receive as opposed to paying out. In many instances individuals receiving structured settlement payments circumstantially are forced to look at other options for their money and pursue cashing out their payments for the current value of their annuity.

Ordinary Annuity Payments vs. Variable Payments

There are fixed annuity payment structures and there are variable annuities. Knowing which one you have can make cashing it out a lot easier. A variable plan is often difficult to measure value and should be done by a professional which is why we are here to help. Annuity payments that are fixed amounts at a consistent period of time whether that be monthly, quarterly, or annually, are many times referred to ordinary annuities. Ordinary considering there is not a flexible payment amount or time period and it is the most common form used to calculate how much your annuity might be worth. Most often when people consider selling their payments due to an immediate need, they take the total of the payments over time and assume that is the cash value of their annuity today. Although that would be nice, it’s not realistic.

Calculating Your Annuity Payments – What to Consider

As you can see from this graphic the value of an annuity payment decreases the closer it gets to full maturity.

pv-multiple-future-cash-flows

(graphic courtesy of accountingscholar.com)

The next chart clearly shows that most companies will assume a particular discount while calculating your present value for cashing in your annuity so you can see that something that would be worth a fixed amount over 5 years would indeed have a current value that is lower but still giving you your cash up front. Although deferred payments can help with consistent budgeting, it doesn’t take into consideration the variable of life and circumstances that might force someone come up with a significant sum of money at once.

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Often people try to calculate what their annuity might be worth today and there are certainly different calculators out there on the internet, but the best thing you can do is gather your information and let one of our professionals help you make a decision that is right for you and take the guess work out of it. As you can see from the formula below, if I want to sell my schedule of payments to get a single lump sum today, I better brush up on my algebra.

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Ready to Cash In Your Annuity Payments? Let Us Help You

It is estimated that between 4-5 million individuals across the US could qualify to cash out their annuity payments within the next year, so you are not alone. As you can see, as of 2014, California alone has over 200,000 households that could potentially get cash in hand:

infographic-states-that-represent-the-most-opportunities-to-sell-annuities

Even if you are brave enough to plug in all of those numbers and variables, or perhaps even found a calculator that works for you, that leaves you with trying to figure out who will turn those periodic payments into cash in hand, and also what’s taxable and what isn’t. There is a lot to consider here, which is why we have made this website so you can have a trusted source of information and help with taking things like lottery winnings over the next 30 years into something you can invest today.

So, as you can see from the information we have provided you, this process is not always easy so let us give you a hand making a sound investment decision and get the most from your annuity payments. Don’t settle for less than what you are entitled to and certainly don’t let a company take advantage of you. Let our teams of qualified professionals break down your options for you and make the most for you now.

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