The best financial planners advise their clients to be prepared for life’s events, planned ones as well as surprise ones.
Some of us are more able to plan for life’s twists and turns, but most of us do not have the financial assets to prepare in advance for life’s expenses, it doesn’t matter if they are expected, such as weddings, or if they are unexpected surprises, such as medical emergencies or a collapse in the housing market.
Financial planners recognize that life comes with surprises. As Mr. Rick Annaert, President and CEO of Manulife Securities, an affiliate company of John Hancock Financial Services, said in a recent interview, “You can’t prepare for all of life’s events, of course”. He explained that “Life is better when you’re prepared. Financial planning helps you prepare for life’s most significant events – your children’s education, the wedding of a son or daughter, your lifestyle in retirement, being able to care for your elders. You can’t prepare for all of life’s events of course, but when you identify and plan for most of them, life is just better. Financial planning makes that happen.” **
Financial planners say that having a financial plan helps families to be prepared for planned or voluntary financial obligations like weddings and kids’ college expenses, as well as for unplanned or involuntary financial obligations such as an illness or losing a job or helping a family member. A completely ready financial plan is a wonderful objective for all of us to try to have, but most people live life without having the cash in the bank to deal with life’s unexpected events and changes.
In this sense, annuitants receiving structured settlement payments are among the fortunate few who have assets they can access in times of need or financial stress.
According to Jane Olshewksi, manager of Investors Group Financial planning programs, families need to be prepared for “life’s bumps and bruises – unanticipated changes such as a serious illness or a job loss, for example, have financial consequences”. **
In fact, annuitants who sell their payments are just dealing with the inevitability that many financial planners see as their most important job – preparing for the unexpected. We all have to deal with life’s changes and surprises.
None of us has a crystal ball so we cannot be ready for every change, but we all want to be able to react to changes. Some of us may have to sell our investments, or sell our house, or take out a loan – or sell our structured settlement payments. Annuitants are just doing what we all do: trying to react to life’s changes in the best possible way we can.
Only 1 – 2% of structured settlement payments are sold each year, and it seems reasonable that 1 -2% of annuitants need an escape mechanism to deal with unexpected changes in life’s events, especially in a world of 10% unemployment.
It seems reasonable to us that as long as annuitants are dealt with fairly and reasonably, then what they are doing is ok. The problem is how it is done.
In other words, in times of need, it’s not selling structured settlement payments that is the problem, it’s selling too many payments or selling for too little money that is the problem.
Strategic Capital is here to help annuitants deal with life’s changes. Please call to speak to our experts should you have any questions