How to Choose Between a Lump Sum or Annuity?

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There are two ways to get “free” money in the United States: sue someone or win the lottery. Before everyone goes out suing people or spending their life savings on lottery tickets, it may be helpful to know how “free” that money really is.

The Real Lottery

Winning the Mega Millions would be a dream come true for many, but the 25% immediately withheld by the federal government is sure to wake some from that dream. An additional 6-9% is withheld off the top for state taxes as well. Rather than receive a lump sum, lottery winners receive an annuity; the Mega Millions starts with an initial payment followed by 29 annual payments that increase by 5% increments. Winners are then plagued by additional administrative, early withdrawal, and other fees if they violate certain stipulations.

What to Expect With a Structured Settlement

In many cases, civil cases will settle outside of court awarding the claimant with a structured settlement for damages. There are over $6 million paid out every year to fund new structured settlements, making the average structured settlement payout $324,000. Like the lottery however, the annuity settlement received is paid out over a number of years and protected with similar fees.

Choosing a Lump Sum or Annuity

Lottery winners and structured settlement holders have the option to sell their payments for a lump sum of cash, although selling a structured settlement or annuity can cost surrender charges totaling up to 10%. While it is abundantly clear that there is no way to get 100% of the pie, selling your annuity could be the best way to get the most of your money quickly. A study found that 92% of claimants who sold their structured settlement were pleased with their decision. Picking a lump sum or annuity is a decision that only you can make, but it is an option that will always be available to you.

5 Reasons To Sell Your Annuity Right Now

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If you’re interested in selling your annuity, you definitely aren’t the only one! There are plenty of reasons why people sell annuity payments, whether they’re dealing with a lottery annuity or with annuity settlements resulting from a lawsuit.

The most important thing to keep in mind is that selling your annuity payments can be simple and stress-free — you just have to be focused and figure out exactly why you want to sell you payments! For example,

  • Maybe you’ve found a better investment for your money — whether it’s real estate, the stock market, or a big purchase like a home or car. Annuities are kind of annoying because the money you put into an annuity really doesn’t appreciate over time; in fact, it depreciates, making an annuity a pretty poor investment strategy.

  • A lot of people just get fed up with all the fees involved in an annuity. Between management fees and the taxes you have to pay when you finally start withdrawing your payments, you can end up paying a lot of money toward basic tasks that don’t really matter.

  • Financial emergencies are another reason why people choose to sell their annuities, and although this probably isn’t the way you’d like to be spending your money, it’s definitely better to spend money that’s already yours rather than borrowing the money. It’s impossible to predict when these emergencies will occur, so it’s understandable if you don’t have savings to cover the costs.

  • One interesting trend that occurred following the economic collapse in the U.S. during 2007 and 2008 was that retirement funds began disappearing — and as a result, more people began pruchasing annuities just to make sure that they had something in the future. A lot of these people are now realizing that an annuity really isn’t a great retirement plan.

  • Last but not least, maybe you want to sell your annuity payments simply because the annuity is yours, the money is yours, and you should be able to spend or save it as you choose! Maybe you want to go back to school, start up a business, go on a big vacation, or just pay off some credit card debt. It’s up to you how to use your money — the only thing that really matters is selling your annuity safely and securely!

Are Structured Settlements Working Out For You? Here’s Another Way To Get Things Going

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Life is a series of ups and downs, so when things start plummeting, it’s your responsibility to take action and make a change. Don’t hesitate, waiting around for things to get better; do what you have to do to make things better.
Some might say this kind of direct ambition is easier to claim than it is to apply, but that doesn’t have to be the case with you. Seek professional guidance by setting up a consultation with a financial expert and see what kind of options you have to get money now…

For example, let’s say you’re down and out because you suffered an accident. Even if you file a lawsuit, while you wait for the judge’s decision, you’ll have plenty of expenses to tend to. Markedly, even if you manage to win the lawsuit, your everyday cost of living won’t just go away.

At this point, what are you going to do?

Even if you win the lawsuit, it’s more than likely that you’ll be paid with a structured settlement. By and large, one good thing about a structured settlement is that it can save you 25 to 35% in federal and state taxes; usually, interest income is subject to tax, but that’s based on your tax bracket. Nonetheless, a structured settlement won’t allow you full access to your designated funds.

For those who don’t know, a structured settlement is when you are rewarded money, which is the settlement, but the money is distributed in arbitrary, structured increments, depending on what the judge decides. Accordingly, about 80 to 92% of cases settle outright; however, for those processed by trial, over 90% are won by the person who pursued the suit.

Understandably, with a structured settlement, it can be frustrating to have funds that are legally yours, but they’re also legally inaccessible. However, what if there was a loophole to access these funds?

Luckily for you, there is! You can consult with a finance company and discuss getting cash for structured settlement funds. The obvious plus of you getting cash for structured settlement funds is that your money will be immediately available. Naturally, once you have access to your funds, then you can pay off whatever life expenses are pending.

If you’re looking into getting cash for structured settlement funds, there are services ready to help you sell your structured settlements to help you get settlement cash now, you just have to find them!

After you receive the cash for your structured settlement, financial freedom will be yours…

Why wait?