Is Selling Your Pension for a Lump Sum Right for You?

Lump sums are almost always tempting. It’s only human nature to want more now.

When faced with a financial crisis, that lump sum can often look even more appealing. Many retirees and pre-retirees find themselves in situations where a major medical issue arises and suddenly they’re strapped for cash.

This is a common scenario that happens all the time. The simple fact of the matter is that healthcare is expensive and important. Your health is not a bill that can be ignored or put on the sidelines. When illness strikes, it needs to be taken care of.

Of course, this isn’t the only unexpected financial difficulty seniors might find themselves in when they’re approached by somebody offering to buy that coveted pension for a single lump sum.

When considering whether or not to take someone up on their offer to buy your pension, there will be a number of things you’ll want to consider, including:

  • The commission structure
  • The legal risks
  • The ability to verify information about the investment

For more information on what precautions you should take when considering the sale of your pension, you can visit the Financial Industry Regulatory Authority (FINRA) website at: http://www.finra.org/Investors/ProtectYourself/InvestorAlerts/AnnuitiesAndInsurance/P253851

“Should I Sell My Pension or Not?”

Whether or not you do decide whether or not to sell your pension will ultimately be up to you and you alone. If you are in dire need of the money right now due to extraneous circumstances, who is anyone else to tell you whether to do so or not?

That said, creating a diversified retirement plan can prove helpful to those who don’t want to wind up selling their pensions.

By setting up varied retirement income vehicles, you may be able to protect yourself from having to make these tough situations in the first place by making sure that you’ll have the income to support any such precarious circumstances.

An annuity may be able to provide you with guaranteed* payments monthly for the rest of your life**. To find out if this is a solution that will help protect you, give me a call!

*Annuity guarantees rely on the financial strength and claims-paying ability of the issuing insurer.

** Some fixed index annuities may have a lifetime income guarantee as part of the base policy; others may have riders available for a charge that provide this benefit.