Don’t try to sell a structured annuity by yourself, especially if you are living in a state that does not have a structured annuity protection law. Talk to a trusted broker and attorney before you proceed.
Gains made by selling your annuity before it matures are taxable as ordinary income. However, losses on the sale are not tax-deductible as investment losses. [5] X Research source If you withdraw from an annuity before age 59. 5, you are also charged a 10% tax penalty. However, exceptions are made in various cases, such as the death or disability of the annuity holder. You can also trade your annuity for another qualified annuity contract without paying taxes on the first annuity. These “1035” exchanges can be tricky, so check with a tax accountant or investment adviser before proceeding. [6] X Research source
Have positive, independent reviews of their services. Have excellent customer service. Can make a competitive offer for your annuity. Are licensed to conduct business and follow all appropriate regulations. Communicate timelines and figures in a transparent way. Recommend that you first consult with a financial professional before selling. [8] X Research source Try checking with the Better Business Bureau (BBB) to identify whether or not the company is reputable. Companies with poor ratings from the BBB should be avoided. [9] X Research source Some reputable buyers of annuities include JG Wentworth, Catalina Structured Funding, Peachtree Financial, and Stone Street Capital. These companies can be contacted by phone or through their respective websites.
Ask the broker you want to hire for a quote. If they quote you a percentage, calculate it before you agree. Look up the name of a broker you haven’t worked with before. Any violations or complaints they have might be online. [10] X Research source
When you fill out the free quote form, give them only the standard information. Your name, email address and the name of your annuity should be the only information they ask for. Do not give your social security number, bank information, or pay any fees to obtain a free quote. Give yourself as much time as you can to make the sale. A rushed sale is less likely to get you a good deal.
Gather any other documentation your buyer requires, such as a copy of a court judgment for a structured annuity, or copies of any release agreements.
If you are just selling your annuity to free up some cash, taking out a loan might better serve your purposes.
If you sell an annuity contract, you will have to pay ordinary income tax on your annuity’s earnings. [12] X Research source
Know that this will result in a lower overall payout from your annuity. You will get the money for the sold years up front, but it will be lower than the total value of the payments from those years. You also need to be sure of the value of the future payments before any deals are made. This might be a good option if you need money now, but know you will be able to support yourself during an upcoming time period.
Even though you’ve only sold half the annuity, you will still pay ordinary income taxes on the deferred earnings and any gains made on the sale. [13] X Research source
