FTC Warns Consumers about Pension Advance Plans
If you're trying to make ends meet, here's a pitch that might catch your interest: "Convert tomorrow's pension checks into hard cash today."
Sound tempting? Think again. The Federal Trade Commission (FTC) advises consumers that pension advances, also known as pension sales, loans, or buyouts, come at a very steep price.
Most pension advances require you to sign over all or some of your monthly pension checks for five to 10 years. The lump sum payment you get in return is less than the pension payments you sign over, so you're signing over money you need to live on.
On top of that, pension advances often require retirees to buy a life insurance policy – with the pension advance company as the beneficiary – to insure that the repayments continue.
To learn more about pension advances, read the FTC's 'Pension Advances: Not So Fast.'