That’s no longer the case, thanks to the secondary market. Annuities are packaged into asset-backed securities and sold typically to big institutional investors. Any annuity is up for grabs, except for those held in retirement-specific 401(k), 403(b) or IRA accounts. Selling holds the most appeal for annuity owners who want another investment for tax reasons or better returns, who inherited annuities from older relatives, who need a quick stream of cash due to financial emergencies and other significant life changes, or who simply realized that buying an annuity was a mistake.

The secondary market is also good for those who only want to sell part of their annuity. Take Jack, a hypothetical 66-year-old man who owns a single-premium annuity guaranteed to pay $7,865 per month for 20 years. If he dies before the term ends, the remaining payouts go to his children, who as the heirs would be taxed at their current income tax rate on the annuity’s accumulated interest. Jack decided to shift his focus from retirement income to wealth transfer and avoid some of the tax penalties. He sold $4,000 of his monthly payments over 16 years, totaling $776,000. By selling it to a secondary investor, Jack pocketed a lump sum of $448,910. He invested in a life policy with a face value of $1.66 million, which goes to his children tax-free, and he still retains a monthly payment of $3,865 from the annuity portion he still owns.Rize Üniversitesi

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