How to Get a Lump Sum for Your Pension Settlement
When you work the required number of years for a company that provides a pension, you may be given the option of what type of payments you receive when you retire. In some cases, you can take a lump-sum payment for the entire amount of your retirement; in others, you may have to take monthly annuity payments that you will receive for the rest of your life. Even if you have already chosen the annuity payments, you can still get a lump sum for them.
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Instructions
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Choose the lump sum option when you retire, if it is an option. Typically, when you reach the age at which you can retire, your employer will provide you with information about your pension settlement options. At that point, you can typically simply elect to take the lump-sum option. When you make this decision, the pension plan will give you a check for the total amount to which you are entitled.
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Contact a company that buys annuities to explore the possibility of getting a lump sum. Many investment companies now purchase annuities in the secondary market, then turn around and sell them to people who want regular payments. The company will review the terms of your annuity and then make an offer for it. In some cases, you can even put them up in a marketplace setting, and investors can bid on them.
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Talk to the company that provided the annuity. Annuities are investment contracts provided by insurance companies. In some cases, insurance companies will be willing to buy back the annuity for a lower price than what it cost.
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Evaluate offers from all sources for your annuity. Choose the offer that provides you with the biggest lump sum, as long as it is from a reputable company. You do not want to give your annuity to an unscrupulous company that will not deliver on the amount it promises. Once you choose which option to pursue, you can transfer ownership of the annuity contract and receive your lump-sum payment.
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