Stacy is on a fixed income. She could free up more cash if she paid off her credit cards and mortgage. Should she cash in an annuity to make that happen? DailyFinance's Laura Rowley explains the key factor Stacy should consider in making the decision.

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December 30 2011 at 12:56 AM Report abuse rate up rate down Reply
James Tarr

imo I would examine her situation better. There may be underlying behavioral problems regarding spending habits. Cashing out on the annuity may just be putting a bandaid on a bleeder.

October 25 2011 at 7:00 AM Report abuse rate up rate down Reply
Murray Arvin

Mortgage Rates have hit an all time low! For many, these rates will be the lowest we see in our lifetime. Rates change several times throughout the day, so to get an accurate quote search online for 123 Refi learn about mortgage refi before you do refi on your home.

October 20 2011 at 7:21 AM Report abuse rate up rate down Reply
Sam Gupta

what the heck is an annuity life ins policy

October 20 2011 at 4:56 AM Report abuse rate up rate down Reply

this is really lame! ...and I thought Suzi Orman was bad! You can't address a complex situation in a 50 second sound bite.

October 19 2011 at 4:29 PM Report abuse -1 rate up rate down Reply
1 reply to brazenind's comment

Social networking is all about the collective wisdom being superior to the advice/counsel of a single expert. Some of the comments here are very insightful and do apply to this person. What she will ultimately do, is up to her, but the perspectives expressed here are relevant, meaningful and helpful even if we are not privy to the particulars.

October 19 2011 at 7:25 PM Report abuse rate up rate down Reply
larry & gail

Its hard to borrow yourself out of debt

October 19 2011 at 3:40 PM Report abuse -1 rate up rate down Reply
1 reply to larry & gail's comment

Not really, consolidation loans free-up cash while setting-up a repayment plan over time that will eliminate the debt. The key here is does this person have the discipline NOT TO USE CREDIT CARDS until the debt is paid. The problem with the "quick fix" of using annuity money, though it may make sense from an interest owed/interest earned perspective is that often credit card users do not learn the lesson. They pay off the credit card debt only to charge-up expenses again. What will she do when this happens again? The fundamental lesson here is: Pay the debt down over time and teach yourself how to live within your means. Do not use credit to finance stuff you don't use and don't need. Of course, I'm assuming this person used the card for consumerish stuff. However, if these are charges for medical or other emergencies, the same rules for payback apply and I would be hesitant to use retirement money for consumer debt--unless you can afford to do so. This person doesn't have a lot in the annuity to begin with.

October 19 2011 at 7:21 PM Report abuse +1 rate up rate down Reply

Of course if the cc debt is at least 15%, it is probably in the 20%+ range. Everyone talks about tax penalties without keeping in mind they are very different for different situations. I doubt this lady has much of a tax bill and tax on $15,000 in added income will probably still keep her in the 12% or below bracket. Mortgage different issue without knowing the rate. But if she does it, do in increments of $10,000 or $15,000 a year.

October 19 2011 at 2:31 PM Report abuse rate up rate down Reply

At age 41, I was $25,000 in credit card debt, I finally came to my senses, and decided the best way to turn this situation around was to consolidate the debt. I did so, by "borrowing" from my 403b plan, and taking-out a personal loan with the credit union. I was able to pay myself back with interest on the borrowed money, but the interest on the credit union loan, was just interest paid. I do not recommend anyone sacrifice their future for their current situation, UNLESS, there is absolutely no other way, but there is. Cut back on discretionary spending, create a payment plan. No one gets into debt overnight, and getting-out is not going to be overnight either. Most folks want to take the easy way, when paying down the debt over time, might teach the greater lesson. Can she make more money, can she borrow to consolidate debt (except the mortgage, of course)? Do not cash-in the annunity. The taxes and surrender charges alone will eat-up so much of the cash. Bad idea.

October 19 2011 at 1:56 PM Report abuse rate up rate down Reply
Joseph Paretta

What does her debt picture look like? If she has credit card debt and student laon debt, that is a big problem. Cashing out the annuity might not help.

Joe Paretta
Author - "Master The Card: Say Goodbye to Credit Card Debt...Forever!"

October 19 2011 at 1:38 PM Report abuse rate up rate down Reply

what the heck is an annuity life ins policy

October 19 2011 at 11:58 AM Report abuse +1 rate up rate down Reply
1 reply to joyce's comment
James Tarr

Off of the top of my head, it is an insurance policy that kicks in after the death of a loved one. The beneficiaries receive equal payments divvied out over time until the policy is used up. The money is held by an insurance company and invested to extend the life of your policy.

October 25 2011 at 7:06 AM Report abuse rate up rate down Reply