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Would You Cash Out Your Annuity?

Topic closed. 15 replies. Last post 7 years ago by jwhou.

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United States
Member #83701
December 13, 2009
225 Posts
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Posted: April 2, 2010, 11:45 pm - IP Logged

If you won a lottery jackpot and opted for the annual payments. Would you consider going to a company like Peachtree Financial or J.G. Wentworth to sell your annuity if you went out and overspent your annual check?

If you won the jackpot then your biggest problem would be where to invest your money.    The annuity is a tax sheltered investment that pays about 5% per annum, you would be hard press to make wise investment choices for so much money that would pay better in after tax investments.   Your annual check should be plenty for a good lifestyle plus enough to do some dollar cost averaging investments but should you overspend, it should be possible to secure a personal loan or mortgage till the next annual check by which time you should be wise enough to not overspend.   I would do everything I could to avoid cashing in the annuity and incurring the tax penalty as well as losing all those tax sheltered earnings.