Pension advance lenders offer retirees and veterans a loan or cash advances in exchange for all or part of their pension payments. Paying back the advance or loan, plus the high interest and fees that such loans typically include, could threaten older Americans’ retirement security.
If you are considering a pension advance, follow these do’s and don’ts:
- If you are asked to sign up for life insurance with the pension advance, you could end up paying the insurance premium.
- If you are resorting to pension advances due to financial difficulties, consider getting financial coaching or counseling from a professional.
- Don’t be fooled by patriotic-sounding names, logos, or claims of government backing.
- Don’t give anyone access or control over your monthly pension payments.
For additional information, and learn more, click here.
Teaching Suggestions
- Ask students to research local non-profit credit counseling agencies and what services they provide.
- Why is it important not to give anyone access or control over your monthly pension payment?
Discussion Questions
- Why do people resort to pension advance loans?
- What are other alternatives to pension advance loans?
- What recommendation should you take to protect your retirement pension when considering an advance?
Melissa Hart
Focus on Personal Finance, 7e 