Sell Your Annuity

Annuities Enjoy Demand in Shaky Stock Market

Due to the recent turmoil in the stock market, more and more people are realizing the secure advantages that are offered through annuities. People who had their retirement savings invested in stocks now see those savings drastically shrinking, increasing the demand for annuities.

People may have invested their savings for years only to see it washed away with the latest economic tide. Annuities, on the other hand, guarantee a continual flow of income that’s less subjected to market changes. Annuities are contracts with insurance companies that usually provide guaranteed income streams. They offer safer options for investors who are worried about the stock market or getting low returns on bonds.

There are two types of annuities, including an immediate annuity that pays similar to a pension, and a deferred annuity, which allows users to invest money on a tax deferred basis. Although deferred annuities are dependent on the stock market for their performance, there is usually insurance available to hedge against the investment taking a loss. Buy annuity, and you are taking a considerable lower risk than just investing money in the market.

The one disadvantage until recently is that when you buy annuity, you’d traditionally be stuck with it. You’d face high taxes and stiff penalties if you choose to access it early. Fortunately, recent market and rule changes have created a growing market for selling annuity.

Sometimes people consider selling annuity because they don’t need the consistent payments anymore and would prefer to take the money in a lump sum and invest it. Being able to sell the annuity makes it as good as cash, which can be an appealing asset. This fact continues to push the demand for annuities in the marketplace.

Any annuity is up for grabs, except for those held in 401K and IRA accounts. It’s also possible to sell only part of the annuity, if it turns out you don’t need all of it. If you really only need a portion of those payments, you can sell part, take the cash and invest in life insurance, providing your family security that’s still tax-free.

Check how the gains will be calculated with the annuity. Also, watch for any hidden penalties for early withdrawals. Older people should also watch out for any rules that might prevent the money from being accessed for several years.

Annuity is a sound investment in the wake of the economic melt down. They enjoy strong demand, yet can easily be sold as a valuable commodity if you need the money in a lump sum for other investments.

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