3 Ways to Enjoy Your Sunset Years in Style

by billnixon on November 14, 2013

You’ve recently taken your last paycheck from work. It’s time to retire. You get a notice from your company’s benefits department. They want you to sign papers for your pension and 401(k). You do it, but then you regret it. What did you just sign up for? They said something about an annuity. Your first retirement check comes and then it hits you. You’re not getting all of your retirement savings. You’re only going to get monthly payments. You don’t want this.


Find a Buyer For Your Annuity

It’s not easy finding a buyer for your annuity payment. Once you start getting those monthly checks, a court has to approve any changes, and they typically only allow you to sell your payments if you can prove that you’ll be better off in the long-term.

So, the first thing you need to figure out is why you want to sell your annuity payments. Maybe you want to start taking more vacations. Maybe you need an emergency fund. Whatever the reason, be prepared to defend it.

Then, start making phone calls. Do a search on the Internet. Ask friends about what funding companies they’ve used. Start reading about companies on Internet forums. When you do find a company you think looks interesting, ask them lots of questions. Specifically, ask about the fees they charge, how they calculate your lump sum payment, and what the discount rate is that they’re using.

All funding companies use what’s called a “discount rate” when calculating your buyout. This is the discounted value of all of your future annuity payments. Specifically, it’s an amount of money that is discounted to reflect a lump sum of money that could be invested to earn the total value of future annuity payments.

In other words, let’s say you have $1 million in lifetime annuity payments. The funding company could calculate the lump sum that it thinks you could invest today and receive $1 million over your lifetime. The funding company’s fees are then subtracted from this amount. So, you may end up with a very small dollar amount, perhaps only $250,000.


Reinvest In Your Lifelong Dream

Many people retire from jobs they don’t really like, but that paid well. If you’re happy to finally be out of your company, but you don’t want to just sit around all day waiting for something to happen, maybe what you need to do is start a business.

It’s becoming more common for retirees to start a part-time business, but the funds have to come from somewhere. Traditionally, they would have come from savings, but you don’t have savings. You have annuity payments – bingo.

By selling some or all of your payments, you can very quickly raise the money you need to fund your post-retirement venture.



If you’ve ever wanted to live out the last days of your life traveling, cashing in that annuity might just be the best move you can make with whatever is left of your annuity payments. Most of the time, you’re going to need a lump sum of cash to get discounted rates on travel and hotels. If you’re really good at budgeting, you can make even a small sum of money last for a very long time.



Bill Nixon is an avid law blogger who likes to share his knowledge on various Internet blogs.

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