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Find a Buyer for Your Annuity

1. Determine whether or not your annuity is transferable
If your annuity is not transferable, then you cannot sell it under any circumstances. Check your contract to see if it is transferable. If you are trying to get immediate funds, list your nontransferable annuity as an asset or form of income and apply for a bank loan.
2. Determine if your annuity is a structured settlement
Check your contract or consult your accountant to learn about the laws in your state. Most states have laws that protect people trying to sell their structured annuity. If your state has a Structured Settlement Protection Act, your transaction will have to be approved by a state court.[2] The Periodic Payment Settlement Act protects those who received a cash sum as a result of personal injury and wrongful death lawsuits, from spending the awarded money too quickly, which may then force them to turn to public assistance to meet their needs.
3. Evaluate your annuity
Before you shop around for annuity buyers, find out what the resale value of your annuity is. Hire an accountant if you are unclear on the details of your investment and its relative worth. Keep in mind that selling your annuity always result in your receiving a lower amount of money from your annuity. You will get a lump-sum payment that is adjusted with a discount rate.
4. Understand the tax implications of selling your annuity.
  • Gains made by selling your annuity before it matures are taxable as ordinary income. However, losses on the sale are not tax-deductible as investment losses.
  • If you withdraw from an annuity before age 59.5, you are also charged a 10% tax penalty. However, exceptions are made in various cases, such as the death or disability of the annuity holder.
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