Prolonged Annuity Payments Versus a Lump Sum Now

Investing your money

If you have been looking for ways to reduce debt so that you can manage your finances better, receiving a structured settlement annuity may seem like the break you have been waiting for you. However, there are several things that you should know before signing on the dotted line to receive your annual or monthly payments.

  1. Prolonged Process
    After you find out that you are going to be receiving annuity payments, it can still take a very long time for you to actually have them in hand. The waiting period could take months, even years before you ever see a penny of your money. The reason for this is that there are so many legalities and processes that a company must go through when doling out this type of cash. Then there’s the question of how they will report it on their taxes and so their accountants have to hold on to it for awhile. What it really comes down to, is they are dragging their feet.

  2. Small Payments
    If your settlement is coming from lottery winnings or winning a case like an auto accident, these companies will do everything in their power to not have to pay out a lot at one time. Setting up payments with you will be done in such a way that it benefits them. They are not thinking of your best interests. Sure, they may give you options of amounts and time frames but all of them are first of all beneficial to the one giving away the money. Usually, annuities are spread so thin and for so long that the payments you end up getting every year or month are so small that they barely make a difference. You may be receiving money for the next 30 years but the payments will be very small amounts.

  3. No Tax Breaks
    You will still have to pay a very large amount in taxes the following year after receiving your earnings. This is on top of what will already be taken out in order for the company to pay taxes. Yes, they will take it out of your money. And then you have to pay your own taxes out of it also.

So, what else can you do? How can you avoid these problems? You can sell your annuity. What does that mean? Well, once you know the amount that you are going to be getting, you can sell that amount to a company that will buy it for a certain price. While there may be fees and things like that involved, there are many benefits that could outweigh waiting for your yearly installments. If you choose to sell your annuity, this means several things:

  1. Immediate Payment
    Typically, When you want to sell your annuity, you don’t even have to wait to find out if you have won your case or not. If you know the amount of the settlement, you can put in an application for sale at one of these places. They will give you an offer and once you accept it, you can expect a check within days.

  2. Quick Turnaround
    The whole process can take less than two weeks once it’s started. Actually, the main waiting periods are up to you. Your application will be reviewed and an offer made, as mentioned above and then it really is up to you how long you wait to accept or deny. You can negotiate the final amount as well if you don’t mind waiting a few extra days for your payment to get to you.

  3. Lump Sum
    Selling your annuity payments means that you will receive your money in one lump sum. No more waiting year after year for your money to get to you. You can have it all right here and right now. This is extremely beneficial if you are trying to pay off medical bills, get out of debt or pay a large item.

Deciding whether or not to sell your annuity is a big choice. It really comes down to what is in the best interest of your life goals. If all you are doing is saving for nothing in particular, annuity is fine. But if you have plans to travel or live large, you’ll need all of your money as soon as you can.

Selling Your Lotto Win for a Lump Sum

Lump sum versus annuity

Do you have a structured settlement with a large amount of money due to you? Perhaps you’ve won the lottery, or a lawsuit. You have plans. Maybe you want to quit your job and see the world. Create a college fund for your kids. Buy your dream house on the beach. Start a business. But if you wait for the annuity to be paid out over time, it may be 30 years before you see all your money. You can however decide to get cash for your settlement and discover pre settlement loan benefits.

What to do when you win the lottery

Once all the excitement has died down, you find that it is a long wait for your money. And if you choose to stay wth the annuity settlement, it will be thirty years before you have all the money that’s due to you. Thirty years is a long time in anyone’s life and your goals and needs will have changed by then. You need the money now while you have the vision and energy to achieve your goals.

Also keep in mind that the value of money depreciates over time due to routine inflation and 5 million dollars will be worth less thirty years from now. On the other hand, if you sell your lotto win for a lump sum, you can access all your money now when you need it, to move on with your plans.

Cash for structured settlement: how does it work?

If you decide to get cash for your settlement, you will be working with a direct funder that has built a relationship of trust over time with banks and other financial institutions. If you’re one of the more than 37,000 Americans who use money from structured settlements each year, you may want to consider the pre settlement loan benefits of selling your annuity.

One of the benefits of an “immediate” annuity is that normally you can begin receiving payments in around 30 days. The vast majority – 92% – of those who sold their structured settlements report that they are satisfied with their decision.

So if you decide now not to wait for your money but to sell your annuity, thirty years down the line you may look back and think it was the best choice you ever made.

Three Reasons You May Not Be Getting the Most From Your Lottery Winnings

Lottery annuity

One of life’s greatest joys, a fantasy held by many, is the idea of winning big in the lottery. How many of us have used a ‘winning the lottery’ scheme as a wistful notion for running from all our financial problems? Indeed, it seems like it would be a dream come true but the truth of what it’s like to win the lottery is far from ideal. A downside that not many people talk about are lottery payments, the concept of getting cash in structured settlement payments rather than at once in a lump sum. There is an answer in the form of selling a structured settlement, but how and why would such an option help?

1) Selling Lottery Payments Saves Money

It may not come as a huge surprise, but there are lots of ways in which a lottery winner can lose their total earnings from following by the preexisting structured settlements. For one, the lottery has to withhold about 25% for federal tax, depending on your situation and where you live, and another 6 to 9% for state taxes. This already takes out a big of your total earnings, but the practice of receiving the money in small lottery payments can lead to blowing the amount on small expenses at once rather than a potentially big, worthwhile investment like a house or college.

2) Selling Your Annuity Insures a Quicker Payoff

There are few things slower than the course of lottery payments. Mega Millions issues one immediate payment, followed by 29 annual payments that increase by 5%. While an increase is never bad, waiting 30 years for a payoff isn’t exactly the lottery winning ideal that most people fantasize about. The annuity payout schedule for Powerball follows this same 30 year pattern rather than offering a lottery lump sum payout. Even for a big amount of money, who wants to wait that long?

3) Selling Lottery Payments Is a Decision You’ll Feel Confident About

You would not be alone at all in choosing to sell off your lottery payments to get cash for annuity now, rather than waiting forever. By 2013 there were 34,800,000 individual deferred annuity contracts, the total of which exceeded $2,580,000,000 in all. It’s perhaps no surprise then that 92% of lottery winners that sell their payments end up being happy with their decision to do so. This is clearly a choice that many people in the same situation have made to their own benefit.

If you’re wanting more from your lottery winnings than what is being offered to you by the lottery itself, making the choice to sell your structured settlements might be just the answer you’re looking for.

3 of the Nicest Things People Have Done After Winning the Lottery

Sell structured settlement payments

There are two main ways winners can receive their lottery payments — as either lottery lump sum payouts or as lottery annuity settlements — but there are billions of ways that money can be spent, some of which are nicer than you might think. Here are a few of the more unique ways people have used their new riches.

Upgrading the ‘Ol Alma Mater.

Gloria MacKenzie won the lottery at the ripe old age of 84-year-old, and knew just what to do with her money. First, she upgraded her home. Rather than continuing to live in a shabby shack with a tin roof, she bought a 6,322-feet-square home in one of Jacksonville’s gated communities to the tune of $1.2 million. Then, she dropped another $2 million upgrading her former hometown high school in Maine, where her daughter taught biology at the time.

Building a Waterpark.

When John Kutey of New York won the lottery back in 2011, he decided to spend his $28.7 million giving back to his community. He used the money to demolish a local wade pool, and install a new, $250,000 spray park. The park opened in 2013, and though Kutey and his family lived in Florida at the time, they made it to the grand opening.

Giving to Charities.

Robert Erb of British Columbia won a cool $25 million in November of 2012. That year, Erb estimated he spent more than $8 million giving charitable donations and gifts to individuals in need, including 10 cars, $300,000 in dental care, and $70,000 fixing up the local community association’s facility. He also left a $10,000 tip at a restaurant after he heard about the owner’s daughter being diagnosed with cancer. Oh, and the 61-year-old donated $1 million to support the legalization of marijuana.

It doesn’t really matter whether you decide to get lump sum payout or an annuity, just so long as you invest it wisely, as these folks have done.
If you have any questions about lump sum payouts or annuity settlements, feel free to share in the comments. More like this article.