Pension advances come at a very steep price
If you’re retired and trying to make ends meet, here’s a pitch that might catch your interest: “Convert tomorrow’s pension checks into hard cash today.”
Sound tempting? Think again. Pension advances, also advertised as pension sales, loans, or buyouts, can come at a very steep price.
Most pension advances require you to sign over all or some of your monthly pension checks for five to 10 years. The lump sum payment you get in return is less than the pension payments you sign over, so you’re signing away money you need to live on. And pension advances often require retirees to buy a life insurance policy – with the pension advance company as the beneficiary – to insure that the repayments continue.
Before you sign on the dotted line, read Pension Advances: Not So Fast.