How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Lane Your Own Question
Lane
Lane, JD, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 10103
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
1929974
Type Your Finance Question Here...
Lane is online now
A new question is answered every 9 seconds

Anuity or settlement. Payment of $80,000 is in June 2016.

Customer Question

Anuity or settlement. Payment of $80,000 is in June 2016. What would be the cost to have one of the advertisers buy it out now - early? Of course it is Sunday and no one is available to answer from those companies.
Submitted: 1 year ago.
Category: Finance
Expert:  Lane replied 1 year ago.

Hi,

...

This will vary from company to company ...but they'll essentially pay you the present value of the annuity now (given that they will not receive until 6-2016. (MINUS their profit margin)

...

AND depending on the product hat used to facilitate the annuity, ...

  • Selling off an annuity can cost surrender charges of up to 10 percent.
  • Selling before age 59 1/2 can trigger federal taxes and penalties.

...

If you decide to mover forward, decide to move forward, they offer the you an upfront sum to surrender the stream of payments, along with a discount rate.

...

You can shop around but the discount rate, which is typically between 6 percent and 29 percent, is comparable to the interest you would pay on a loan ... the lower the discount rate, the bigger the present value to you.

...

Also related, insurance companies, have seen their credit ratings downgraded. The cost of funds and capital has also gone up, and developments throughout the credit markets can have big implications in the structured settlement industry.

...

Bot***** *****ne, shop it, get a fixed amount and a fixed time line in mind... and then then see who will give you ghe lowest discount rate (all other tings being equal).

...

Just to give you a foundation ... at 3% annually (.25% per month) for 8 months, the pure present value would be $78,417.85

...

Go here to try different rates to see if they're shooting straight with you: http://www.investopedia.com/calculator/pvcal.aspx

...

Let me know if you have questions

...

Lane

...

If this HAS helped, and you don’t have additional questions on this, your positive rating … (by clicking or touching the stars or smileys on your screen) … would be appreciated!That’s the only way I'll be credited a portion of what you've paid JustAnswer.

.

Related Finance Questions