Category: Lump sum versus annuity

What to Do With Your Structured Settlement Annuity

    Finance Tips

Cash for settlement

If you are currently receiving a structured settlement annuity either because you won the lottery, a lawsuit or through a life insurance payout, you need to decide if you want to keep collecting the money monthly or if you would rather get cash for your settlement. There are a number of factors that go into making this decision regardless of whether you received $150,000 from an employer, are getting part of the over $3.5 billion paid out in medical malpractice suits in 2013, or you won $1 million in the lottery.

When you choose an immediate annuity, you can usually get your money is about a month. However, you have to choose the right one in order to offset the amount you will be charged in fees and taxes. For example, if you are under the age of 59 1/2, then your annuity will be charged 10% for early withdrawal. However, if you choose to wait to withdraw the funds, you must begin receiving payments by the time you are 70 1/2.

In addition, annual fees can be anywhere from 2% to 7% on top of the taxes that need to be paid. Taxes are usually between 25% and 35% depending upon your tax bracket, but cannot exceed 35% of the annual income, regardless of the amount of money made. This may be why almost 50% of lottery winners are still working and why nearly 70% of all lottery winners lose their money in five years or less, regardless if the amount of money they won was $500 million or $1 million. One of the best ways to determine what is right for you and your money is to use a special sell structured settlement calculator.

Once you sell your structured settlements, you are free to do whatever you want with the money. You can use it to get out of debt, buy a car or pay off your mortgage. However, if you do not want to spend the money from your structured settlement annuity all at once, there is another option. Another way to keep your structured settlement annuity safe is by turning into a deferred annuity rather than getting the money right away. While these are low risk, you do have to wait for 15 to 20- years in order to withdraw funds. However, the rate of return greatly exceeds other low-risk options. For example, if a 60-year-old man has a $100,000 deferred annuity and waits until he is 85 years old to collect, then he is guaranteed $4,000 a month in income.

3 Reasons for Defendants to Choose Structured Settlement Annuity

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Buy structured settlements

A Structured Settlement Annuity (SSA) is a tax-free, annual payment of money usually resulting from a lawsuit or insurance claim. Every settlement is different and structured to accommodate the specific needs of the individuals involved in said case. While people usually view these in the context of the plaintiff (those receiving payments), there are structured settlement annuity benefits to the defendants as well. Here are three reasons it could very well be in the best interest of both parties to come to an annuity settlement.

    1.) Success Rate: Perhaps un-success rate would be more accurate. The plaintiff is victorious in the majority of cases that go to trial (over 90%). For that reason most people on the defense side elect to try and settle outside of court (80-92% of cases by some estimates). Obviously you will be losing in the sense that you’ll have to pay something, but the total amount will often times be much less than if you leave it up to a judge/jury to award damages. Even if the plaintiff wants a lump sum most will be open to the idea because there are plenty of businesses that they can get cash for settlements almost immediately.

    2.) Reduce Cost: Lawsuits can be expensive. On average, employees that win a case against an employer will receive $150,000. Besides the outright cost of the payout though there are court fees, lawyer costs, and other expenses associated with going to trial. In the end it is usually a more cost-effective option to cut your losses from the jump and negotiate a fair Structured Settlement Annuity.

    3.) Insurance: Perhaps the most important reason to consider an SSA is the insurance implications. Depending on the situation and your provider they will sometimes cover the annuity payments for you. Obviously this will have an affect on your rates and premiums, but it will save you from having to come up with the finances on your own, or having to borrow from a bank at high interest rates.


Overall a Structured Settlement Annuity can be beneficial to all parties involved. It should be one of the first options you look for if you’re caught on the wrong end of something like a personal injury lawsuit because of the above mentioned reasons, as well as others left out.

3 Common Reasons for Selling Your Annuity

    Finance Tips

Sell my structured settlement for cash

Every case is different, but there is a good chance that you need cash now if you are looking into selling your annuity. The motivation for making this decision can vary from person to person, but there’s never a shortage of reasons for people to need settlement cash now more than they may need it in the future.

If you’re considering selling your annuity, you probably have a good reason to do so. Here are three common reasons that people take advantage of this opportunity, and the benefits of receiving huge lump sums of your well-deserved money:

    You lost your job. The recession has affected everybody, and thousands of people have lost their job as a result of the struggling economy. If you find yourself unemployed, selling your annuity is your best chance to get back on your feet and survive the drought.

    Your mortgage payments have gone up. Your income tax rate can be as high as 35%, and property taxes certainly don’t help your bank account. If your mortgage as gone up, selling an annuity settlement can help you take care of a large portion of these new expenses and get some peace of mind for the immediate future.

    You need a vacation. Sometimes you don’t lose your job or experience an increase in required monthly payments. Sometimes you just need a break from it all. Whether you want to help finance a lengthy destination vacation or just relax at home until you figure things out, selling your annuity is the best way to finance it.

Talk to a professional and figure out how to make your annuity work for you, instead of the other way around. It’s your money and your future, and you should decide what happens to it.

Win the Lottery? Congrats! Think Twice, However, Before Leaving Your Job

    Finance Tips

Lump sum versus annuity

Moving to Tahiti. Buying a Rolls Royce. Spending your summers in the south of France. These are just a few of the images that pop up when we think about winning the lottery. One thought that certainly doesn’t come up that often is the idea of staying at your job after winning. But did you know that a whopping 48% of all lotto winners continue to work? It may be hard to believe but the reality is that winning the lottery, despite its connotations, isn’t what it’s cracked up to be.

Lottery payments are notorious for their gradual and often frustrating allotments. That is, lottery winners usually do not get their winnings all at once. Instead, lottery organizations opt to pay winners gradually. The Mega Millions lottery, for example, shells out lottery payments over a span of 30 years: one initial lump sum and another 29 payments, each one 5% greater than the one before it. For obvious reasons, this can be very frustrating for lottery winners, who want nothing more than to collect their money in peace. Add on the fact that the government — federal, state, and local — takes up to 25% of lottery winnings, lottery winners can become more than flustered. Overall, with the flow of money rather tight (at least at first), lottery winners often have to continue to work before they can live off the fat of the land.

Because of this, many lottery winners turn to annuity settlement deals to get their cash quick. Structured settlement annuities are financial arrangements in which a lottery winner signs over his or her earnings to a company for investing. In return, the company provides their lotto winnings much quicker, either in a lump sum or in a gradual (but more favorable) payment cycle. Structured settlement annuity benefits are massive, which may account for the fact that 92% of people who sell their structured settlements are ultimately happy with their decision.

When you win the lotto, just do yourself a favor: win the lotto the right way with structured settlement annuities.