Why Sell: Retirement

Looking forward to retirement, but want to make sure that you have your finances in order before you stop working? If so, you’re not alone. About 40% of baby boomers expect to see their living standards decrease when they retire, according to a recent Transamerica’s Center for Retirement study. That shouldn’t be the case—most people have worked hard all of their life and deserve a relaxing, rewarding retirement.

If you own your mineral interests, though, getting a lump-sum payment for your mineral interests could be just the financial boost you need. In addition, there are other really good reasons to sell.

Reduce Your Financial Risk

When you’re receiving monthly royalty checks:

• Your check amount is at the mercy of the unpredictable market price for oil and gas and the production capacity of the well—neither of which you can control.
• Mechanical or operational problems with production equipment can affect the amount of oil and gas that can be produced.

This is why the royalties you receive may range so widely. By selling for a lump sum now, you can ensure the amount that you receive for your interest. And because we’re well-funded, we can close quickly and get your money to you as soon as possible.

So if it’s so risky, why would we want to purchase the rights? We invest in the long term and buy enough mineral interests spread across a large area so that we can manage in the event that one of the interest’s value declines.

Reduce or Eliminate Debt

Most Americans carry some sort of debt—whether it’s credit cards, car payments, mortgages or student loans. Selling your mineral interest will give you quick and easy access to a lump-sum that you can use to pay off or pay down any type of debt.

Simplify Your Finances

By selling, you no longer have to keep up with all of the paperwork such as depletion schedules, division order files and tax records. It also reduces the amount of work involved with your estate planning. By liquidating your mineral rights while you’re still alive, you can distribute cash instead of dealing with dividing up property and monthly royalties.

Take Advantage of Tax Benefits

With royalty payments, you have to report and pay taxes on them every year. By selling, you’ll simplify your tax returns because you’ll no longer have that yearly burden, plus you can potentially benefit from long-term capital gains tax rates.

Other Things to Think About

When you sell your royalties, you won’t receive monthly checks any more, but you will have a larger, one-time payment. If this seems like too big of a decision right now, or you’re just not sure, you can always sell a portion of your mineral interest. This will help reduce your financial risk and provide you a lump-sum payment, but you’ll still have some monthly royalty checks.