With the number of options available to you today, deciding between lump sum versus payments can be quite difficult. There are benefits to both options and it will come down to what your individual situation requires. Here are some tips to help you make the right decision.

In many cases, a lump sum versus payments will not be your ideal choice. While this type of investment might be nice for some people, it may not be the right one for you. One of the main advantages of lump sum versus payments is it gives you immediate financial relief. When you receive your annuity payments, they can be received any time. However, if you are receiving an annuity payment you may be waiting for several years before you actually receive some money.

If you are considering lump sum versus payments, you will also need to consider your personal situation. For example, what are your income needs? If you need a large lump sum of money now to help you with expenses, your immediate need is not solvency problems. Your future income requirements can be handled more easily by another investment product. In this case, having a family office or other capacity funding source may be more important.

On the other hand, if your major short-term need is immediate access to cash to help meet emergency expenses, then your situation makes lump-sum payment a more appropriate investment choice. Because this type of investment will give you instant funds, you won’t have to wait several years to receive your monthly payments. You can immediately utilize the money to pay medical bills, tuition, housing, utilities, and other bills. For many people, immediate access to cash enhances their quality of life dramatically.

As mentioned above, many people prefer lump sum versus payments because of its immediate access benefits. However, in order to select the best options, you must understand your own financial situation. For example, some people are better suited for immediate access to funds, whereas others prefer to spread out their monthly payments over a longer period of time. Understanding your own investment goals is absolutely essential to making a well-informed decision. Once you have a good understanding of your own financial situation, you will be in a better position to select the right option.

Once you understand your investing objectives, you are in a much better position to select the best investment product. For example, if you need immediate access to cash in order to cover immediate expenses, an immediate annuity is likely a better option than the long-term savings account. The key is to determine how you will use your annuity payments and which investment products will provide you with the most immediate financial benefits. If you are committed to a long-term investment strategy, using your annuity payments to make investments and pay your bills will be very beneficial. However, if you are simply looking for extra cash each month, then a lump sum payment will provide you with that extra cash you need.