Annuities

The sites listed below are commercial sites. They are listed because they contain good information on annuities (streams of equal payments over time). The reader should be aware that if you convert your annuity to cash, you are essentially taking out a loan from the buyer of your annuity--a loan of the amount he pays you for the annuity. The payments on that loan are the monies you would have gotten from the annuity, and the cost of the loan is generally quite high--in all the examples below, that cost is a double digit interest rate. Is it worth it? It depends on what other options you have. I urge you to shop carefully for other alternatives before selling your annuity. The sites below are not endorsed by either Pepperdine University or the webmaster, but are provided for the information they supply you.

Please spend some time with your independent financial advisor before selling your annuity to assure that the high cost of funds that you are paying by doing so meets your needs. The average cost of the examples shown on the websites listed is above 10 percent per year, which in today's market for essentially risk-free cash flows is a high cost of funds.