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Turning your structured settlement money into a lump sum of cash probably sounds like a great idea. Yet, if you have read much of our Strategic Capital settlement guide then you probably already have the idea that your structured settlement is actually a really good financial tool, for many people. Now, let’s make it a little more clear and easy to connect the dots, so to speak. Sure, you can get cash for your structured settlement. But following are four good reasons why structured settlements make excellent financial sense, and why you are actually fortunate to have one:
The United States government wants your money and they get it in the form of taxes any time you work or have earned income. However, the government also recognizes that when your structured settlement money is probably needed to help you recover, mentally and physically, from some problem. Thus, the federal government passed laws to allow settlement money to be distributed tax free through structured settlements in many situations. In fact, more than 80% of injury cases are distributed through such structured settlements.
So while casino winnings, lottery payments, and your paychecks are always taxable, your structured settlement payments were not taxed. They were not taxed when they originated or as you receive your payments. And any interest earned on the money in the structured settlement annuity is also not taxed.
This is a fantastic benefit of structured settlements, especially when many people pay income tax at rates of 10%, 20% or more. There simply is no structured settlements taxation. The extra good news is that this money is always tax free, forever. What that means is that even if you sell your settlement payments for a lump sum of cash that money will still be tax free – what a great benefit!
Money that you receive from a structured settlement is usually invested in something called an annuity. These investments offer interest, though at a low rate of growth, and they offer security. So, while there may be other ways to earn more money these settlements do grow, tax free, in a safe environment. Of course, as you now know, the answer to the question, “Can I sell my annuity” is usually “Yes”.
Do some calculations and ensure that you will still be able to meet your life expenses if you sell your settlement payments. Ensure that you will still have enough money to pay rent, cover transportation expenses, and so forth.
Structured settlements offer steady income on which you can rely. You may miss work when you are sick, have transportation issues, or lose money when the work runs dry, but your structured settlement will continue to be paid – the money keeps on coming no matter what. This offers you security and stress relief, giving you the money that you need to pay your mortgage or rent, buy groceries, pay college tuition and more.
On top of all these benefits structured settlement money also offers a degree of flexibility in that some, or all, of the payments can be sold when you need a larger sum of cash all at one time. These four benefits make structured settlements the grand slam of the financial world, offering you tax free growth that is dependable and flexible. Can you sell an annuity? Well, you can get cash for your structured settlement if you have a real need. Call Strategic Capital today for a free consultation to learn how you can sell your payments to get your financial life back on track.