# How Much Is My Annuity Worth?

Pricing annuities is a challenge, although there are many calculators designed to do exactly that. To figure out how much your structured annuity might be worth, you must first understand what the annuity actually is. When you receive a settlement, you might have the choice between a lump sum payment or an annuity.

The lump sum payment is almost always considerably less than the sum of the annuity payments, making the annuity appear more attractive. For example, you might get $10,000 now in a lump sum or $15,000 in an annuity over the course of ten years. $15,000 is more than $10,000, so it's easy to see why many people select the annuity.

But in the long run, the annuity is often worth less than the lump sum would have been if you invested it. If you had taken the $10,000 and invested it at 7 percent for those ten years, you'd have almost $20,000.

Annuity calculators do this sort of math in reverse. The total of your annuity payments may be $15,000, but the annuity itself may be worth less thanks to the timing, tax implications and investment potential of your funds.

The longer you hold your settlement, the more its value goes down and depreciates. This is the time value of money and clearly demonstrates how there are better ways to invest or put your money to work for you. Most will only look into selling part of or an entire settlement when they have a financial issue, but even if not the case in your situation its wise to consider how to make the most of it, such as investing in real estate or a business.

In order to find the exact value of what your annuity may be worth, you will need to work with a financial expert to discuss the possibility of selling a structured annuity. The amount offered may vary according to the various financial institutions, but in every case it will likely be less than you were expecting by simply multiplying the monthly amount you receive by the number of months you'll be receiving the annuity.