How to Choose Between a Lump Sum or Annuity?

December 3, 2015 Finance Tips

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.

Cash Management Solutions What Are They, And How Do They Work?

November 18, 2015 Finance Tips

When running a business ? especially a small business ? the issue that stands above all others is money. But you know as a business owner that money doesn?t simply concern what you make and the bottom line. There?s also the matter of physical currency, and how cash is managed on the most basic level. In fact, many people who shop at stores on a daily basis don?t know what happens to their cash once they spend it, or how their personal cheques are cashed. Cash management solutions are incredibly important, not only to business owners but to those trusting them with their money. They not only lead to more responsibility overall, but more efficiency.

What Does ?Cash Management Solutions? Mean?

When discussing cash management solutions, you?ll usually find yourself talking about things like cin sorters, coin and note recyclers, and cheque scanners, among many other things. These systems make organizing money and scanning cheques much simpler. Furthermore, these solutions take human error, for the most part, out of the equation. This ensures that your business is less at risk of employee mistakes that you could be held accountable for ? not to mention the fact that it minimizes the risk of a poor employee getting away with theft.

What Are The Advantages Of Using Retail Management Systems?

First thing?s first: what do these machines do? Well, there are plenty, and they all have different functions and purposes. A currency counter machine, for example, can count everything from stacks of banknotes to loose collections of coins. While counting coins by hand is time consuming, often requiring two or three counting sessions, you?re still susceptible to mistakes. Only a cash counting machine can allow for 100% accuracy. There are also high quality cheque scanners available, which can scan and electronically deposit cheques throughout the day. Another thing that a cash management system can accomplish is simpler deposits for bank tellers. As they can identify which bills were inserted ? rather than simply how many ? currency counters in modern automated teller systems can allow for deposits without envelopes.

What Issues Can Cash Management Systems Prevent, Besides Theft And Miscounting?

A major issue faced today by bankers and business owners alike is counterfeit cash. Counterfeit cash isn?t simply useless; it actually can get those who take it, even unknowingly, in legal trouble. One of the oldest crimes in history ? becoming a serious problem in the 19th century, when banks issues their own currency ? counterfeiting is still very common, and relatively simple for criminals to accomplish. By using currency counters, you can not only keep track of money but in some cases identify counterfeit money on the spot. The bill will be identified and then, hopefully, traced to the source. In using cash management systems that can spot counterfeit money, you?re not only saving yourself a headache, but helping the government catch criminals.

Thinking of Moving Your Businesss into Canadia? Do You Know the Diffferences in Payroll Regulations?

November 17, 2015 Finance Tips

A potential issue facing all small business owners is employee payroll processing, as it can be risky, complex, and expensive if mistakes happen. Business owners who manage employee payroll themselves have to total hours, perform gross-to-net calculations for each employee, calculate and deposit payroll taxes, and prepare and file tax returns accurately and on time, but when you use outsourced payroll solutions, you only have one report to approve and one bill to pay.

As a small businesses owner, you?ll benefit greatly by using an employee payroll service, HR services, and leaving employee benefits to a specialized company, so you can focus on your core business. Accounting and how to figure payroll taxes can be especially difficult for small business owners, who often have little experience bookkeeping, that?s why more than 85% of CPAs recommend that you employ the acumen of professional employee payroll services providers.

You?ll find that using an outsourced payroll service can save you time and money, particularly around tax season.

In addition to employee payroll service, a payroll provider can offer ESA and OHSA compliance, government remittances, and HR Management. HR management and employee payroll in Canada are different than in the U.S., because we have very different laws and regulations. When it comes to payroll processing in Canada, there are more than190 regulatory legislative requirements, that?s why it can be challenging for U.S. based companies to ascertain that they?re in compliance with Canadia when paying their Canadian staff.

There are many U.S. firms that are reticent to expand into Canada because of the jurisdictional differences between the two countries. Firms based in America can potentially make costly mistakes mismanaging their Canadian employee payroll by relying on spurious practices and misinformation. Hiring a PEO service in Canada will help you to avoid this. Plus, they?re aware that the Canadian Revenue Agency is focusing its efforts on enforcing employee payroll tax policies for small businesses in Canada, because small businesses have been classified as the greatest source of uncollected taxes.

Obviously, there?s a lot more to employee payroll management than just cutting cheques. So if you?re ready to expand into the Canadian market, consider hiring a company specializing in Canadian employer of record services. You?ll be glad you did.

Here’s How Selling a Structured Settlement Can Help You Take Care of Your Most Dire Cash Needs

November 10, 2015 Finance Tips

Everybody has random and unexpected cash needs that pop up from time to time, and not having the financial resources to meet these needs can lead to some serious consequences. If you’re the recipient of a structured settlement, you have the right to sell your fixed payments for a huge lump sum and face these urgent cash needs head-on.

There is a wide array of things that can happen on a daily basis that will cost you money, but the most common sources of urgent cash needs are medical problems and overdue rent. Selling your settlement will allow you to avoid hassling creditors and possible repossession of your most valuable assets. Here are just three of the ways that selling your structured settlement can get you out of a financial jam:

Medical debt.

Rent/mortgage payments.

need

access your settlement cash now

Fast pre-settlement advances.

you have the option to receive a pre-settlement cash advance

settlement recipients

Selling a structured settlement is is a fast and easy solution to a complicated problem. Don’t fall victim to financial distress; talk to a settlement expert and receive a huge lump sum to take care of these unforeseen expenses.

Five True Facts About Lottery Annuities

November 4, 2015 Finance Tips

Everyone has dreamed of winning the lottery at some point in their lives, and why not? Winning the lottery can either solve all of your problems or spawn some entirely unforeseen problems of its own. Here are the top five reasons why the lottery system might not be all it is cracked up to be.

1. Taxes on Your Annuity
Right off the bat, you lose 25% of your lottery annuity to federal taxes. As if this is not enough, state taxes can cost you an additional 10%. Some annuities may even have yearly tax fees, costing you even more money.

2. Annual Upkeep Fees
The threat of annual tax fees is only increased when one has to consider annual upkeep fees. Annual fees for your annuity can reach as much as 3% of your total investment. Some annuities charge penalties reach 6 or 7% within the first seven years; meaning that money is lost every year you wait.

3. Subject to Early Withdrawal Fees
Waiting might just be the only thing you can do, as many annuities are specially set up to hit you with early withdrawal fees. If you withdraw the money before a certain length of time, or in some cases before the age of 59½, you will be subject to taxes plus an additional 10% early withdrawal penalty fee.

4. Lottery Annuity Payment Schedule
The most important part of an annuity is the money of course. The Mega Millions starts out with an initial payment followed by 29 annual lottery payments that increase every year by 5%. This means that a typical Mega Millions jackpot of $50 million would start with an initial payment of over $750,000 and future annual payments that would nearly reach $3.1 million dollars.

5. Love and Loss
Despite being entitled to more money than most people see in their entire lives, nearly half of lotto workers continue to work at their old job. Whether they will $500 million or just $1 million, nearly 70% of lotto winners will lose or spend all of their money in five years or less.

Still encouraged to go for the lottery? Many people have bypassed the unnecessary fees associated with annuity settlements by selling lottery payments to trusted companies who will continue to collect the cash after giving you a lump sum. Although you’ll never beat the lottery, at least you can find a way to still come out ahead.

How to Receive Cash for Annuity Payments

November 4, 2015 Finance Tips

Winning a lottery annuity is often the subject of a great story, but rarely happens in real life, right? The truth is, lottery winners are living and working along side of us; chances are you know one. So why are these hidden millionaires not driving yachts or sipping champagne? Here are three hidden truths that the lotto business doesn’t want you to find out.

Taxes
To put it mildly, lottery taxes are brutal. The government will instantaneously withhold around 25% of jackpot winnings for federal taxes, plus an additional amount for state taxes too. These heavy taxes significantly cut down on your winnings, which may be why nearly half of lottery winners continue to work even after receiving annuity lottery payments.

Hidden Fees
Unfortunately the taxes are only the beginning of what can be a lengthy process of fees and restrictions. Many annuities have hidden fees that are enacted once you try to make a withdrawal; if you make a withdrawal within the first five to seven years you may surrender charges of up to 7% of your investment or more. In some cases, withdrawing from particular annuities before the age of 59½ can result in additional taxes plus a 10% early-withdrawal penalty. Just maintaining a variable annuity can cost $20 or $30 per year in maintenance fees — those millions don’t look as attractive as they used to.

Payouts
Getting money is the only reason people really play the lottery anyways, right? Unfortunately a lump sum lottery payout is not going to happen, so you’ll have to receive yearly payments. Some annuities come with options for payments, including payments over a specified number of years ore payments that continue for as long as you or a spouse are still alive. A lottery annuity, such as the Mega Millions is paid out in one immediate payment followed by 29 annual payments that each increase by 5% every year. While some are happy to sit back and collect, some people want to get cash for annuity payments as quickly as they can to pay bills and come out ahead. In order to get cash for annuity payments, you’ll have to find a specialized buyer who will continue to collect on your annuity while giving you a certain amount of money in a lump sum. Selling your annuity may just be the best way to get the most out of your lottery payout.

What to Consider About Lump Sum Lottery Payouts

October 30, 2015 Finance Tips

Everyone wishes for a little bit of luck every once in a while. Even though many people may hope that traffic isn’t too bad on their way to work, or that class will get canceled the next day, some aim a little higher. Considering the massive amounts of debt that are facing citizens in the United States, hoping for a pile of money to drop in your lap is not uncommon. Fortunately, the lottery offers the chance for people to do just that.

The lottery is the most widely spread and used form of gambling in America. The easy and cheap cost of entry is affordable enough for anyone to enter. To do so, one must simply travel to the nearest gas station or convenience store and jot down their lucky numbers. From there on, it’s just a matter of waiting.

For those lucky few who do find themselves sitting in a pile of lump sum lottery winnings, there is still work involved in receiving the money. The problem that lottery winners face, is the enormous taxes that coincide with lottery winnings. The government can withhold up to 25% of lottery jackpot winnings, which is a substantial chunk of change from a multi-million dollar prize.

There are essentially two ways to handle an individual’s winnings. They can choose an annuity, or just a lump sum lottery payout. An annuity settlement allows the winner to receive fixed sums of money every year, rather than all at once which will accrue higher taxes. The Mega Millions for example offers a version of lottery annuity wherein they pay the winner one immediate payment, which is then followed by 29 annual payments; each payment is 5% larger than the previous one.

The choice between an annuity or a lump sum lottery payout can be difficult to make in the heat of the moment. Having all of the money at once is tempting, but overall you will receive more from structured settlement annuity payments. If it’s any indication of how large of an impact this can have, consider that about 48% of lotto winners still work after they’ve won.

Take time to weigh your options before taking the lump sum lottery payout. It could mean the difference between working and sitting on a beach for the rest of your life.

Four Questions You Need to Ask Before Selling a Structured Settlement

October 26, 2015 Finance Tips

Do you receive annuity payments from a lottery winning, a lawsuit settlement, or a life insurance inheritance? Receiving a small payment of your larger balance each month is a nice way to pad your budget; however sometimes it makes more sense to sell your structured settlements to significantly improve your life. Some people find selling a structured settlement is beneficial as starting a business or getting a degree with the cash will generate more money than the annuity payments provided. Other people choose to sell their settlement to buy a house, get out of debt, or make an investment with higher returns to makes their lives more financially stable than getting a small payment each month provides.

Whatever your reasoning, if your are considering selling a structured settlement, you should ask the following four questions before finalizing the deal:

How much cash will I get for selling a structured settlement?
Companies interested in purchasing structured settlements are doing so to make a profit, you will not be able to sell it for the entire value of the settlement. Additionally, you might be subject to a surrender fee of 10% for selling before the terms of the structured settlement are complete. To get the highest value for your structured settlement, you should consult several companies to get a few quotes. Some structured settlement companies offer instant quotes online, with makes the process convenient.

What options do I have for selling a structured settlement?
You have several options for how much of your settlement you sell; you do not have to cash in your entire settlement. You have the option of just selling a portion of your payments, which allows you to make the investment that you want while reserving some payments for the future.

What documents do I need to gather before I can sell my structured settlement?
First, you will need to prove that the structured settlement you’re selling belongs to you. You can achieve this by providing the annuity contract to the company purchasing your annuity. If you do not have the contract, you can provide the original court agreement you were given when you initially entered into the structured settlement or a letter of updated benefits provided by the company who manages your structured settlement.

Second, you will need to provide proof of residence for the state you live in. The easiest way to do this is by submitting a copy of your driver’s license or state issued ID.
Do I have any restrictions in the sale of my structured settlement?
You might face restrictions on selling a structured settlement from the state you reside in. At least 38 states have enacted some kind of regulation that restricts the selling of structured settlements. Some states do not allow it at all. There also may be restrictions on selling your settlement listed in your settlement’s contract. It’s a good idea to consult an attorney to understand the full legality of selling your structured settlement.

Have you ever sold a structured settlement? Do you have any advice to share with people just starting the process? Please share your input in the comment section below.

Annuities and Structured Settlements For the Financially Clueless

October 7, 2015 Finance Tips

Finances are difficult to manage — just ask the 40% of American families who are spending more money than they earn. Perhaps this means that a call for better financial education is in order.
But where to start? One of the biggest financial things that people don’t understand are annuities. Sure, they may have seen them on a late-night television commercial, but does anyone actually know what an annuity is? Luckily, we have the answers for you with this short yet comprehensive guide.

OK…so what’s an annuity?
An annuity is a lump sum payment that is distributed over the course of an allotted amount of time. The amount of time that the payment period spans for varies, but the most common are between 25 years to a person’s death.

Interesting. How do annuities work?
Like any kind of insurance, annuities started with a premium after purchase. Once the premium is paid, it is contributed towards a pool of money that your annuity payouts will ultimately come from.

I think I get it. But how will it benefit me?
Annuities are an excellent investment for anyone but are ideal for individuals with limited amounts of money in their savings. As previously mentioned, annuities are distributed over a period of an allotted amount of years, usually until death. This means that you will be receiving a lump sum of cash until you die. When you have savings alone, it isn’t always guaranteed that you’ll be able to have money coming to you every year.

Okay but what if I wanted to sell my structured settlement or annuity?
Selling a structured settlement is an extremely popular thing to do. Getting cash for annuity payments happens when you sell your structured settlements, resulting in a lump sum. And when you go about selling fixed annuities, it’s profitable and a way to eliminate debt if you’re in a fix and need extra cash.

What does this have to do with my structured settlement?
When you get into car accidents or sustain an injury, structured settlements are often offered in the form of yearly payments, or annuities. But if you want cash for settlement now, in a form of a lump sum, you have to sell your annuity for a lump sum. See, they all work together.
Read more about this topic at this link.

5 Reasons To Sell Your Annuity Right Now

September 18, 2015 Finance Tips

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!