I was offered a pension advance. What is this? What should I look out for?
You should be careful if you get offers for pension advance products. These are offers to pay a lump-sum payout to military or other retirees who receive pensions. This payout is made in exchange for all or part of your monthly retirement pension payment. Though you might get a large amount of money up front, in the end you may only be paid a small amount of what you would have earned if you waited to receive your full pension payments.
There are many companies making pension advance offers on the internet. Many use patriotic-sounding names or logos. You should always research the terms and conditions to figure out whether their offers will actually help you in the long run.
Pension advance offers promise quick money, but the cost can be very high. We’ve heard from veterans paying interest rates as high as 106 percent. In the end, these veterans have ended up keeping pennies for every dollar they borrow.
Never give a creditor access to the account where your benefits are deposited.
For more information on what to look out for with pension advances, visit the FTC's website.