Sell annuity payment

Selling annuities, structured settlements, scheduled lottery payoffs or other ongoing payments for cash has become more popular in recent years, and now that a cash crunch has set in, more people are looking at their options. Unless the financial predicaments are dire, most financial advisers recommend against cashing in annuities or structured settlements. Selling off an annuity can trigger surrender charges as high as 10 percent, and those who sell before age 59½ can also face federal taxes and penalties. Structured settlements are attractive because they generally provide tax-free income for life.

Yet sometimes cashing in is the only option. That $500 monthly payment from an accident in 2002 may have helped with the medical bills early on, but if the beneficiary has now lost his job, watched his investment portfolio shrink by 40 percent in the past year and is on the verge of losing a home, a lump sum payout of $50,000 may seem quite enticing.