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Be Wary of Taking a ‘Pension Advance’
Today, traditional pension benefits are gold for retirees who receive them, as they’re fast disappearing from the workplace. But even with a pension, some retirees still struggle financially and sometimes have a need for extra cash because of unexpected bills or emergencies. Unfortunately, that’s when they can fall prey to companies seeking to take advantage of their desperation through a “pension advance.” Also known as a pension sale, loan or buyout, a pension advance provides you a lump sum to meet your cash-flow needs. In return, you sign over all or some of your monthly pension checks for a period of time — often five to 10 years. However, the pension payments you sign over typically exceed the amount of the lump sum received, affecting your income far down the road. Read more…