The good news is that you will most likely win or settle your employee lawsuit or medical malpractice case. Most cases (8 out of 10 or more) settle, resulting in a win for the person who had the original complaint. With an average settlement of $150,000 for an employee, the question then becomes: lump sum versus annuity? Selling your annuity, also known as selling a structured settlement, is a viable option with many benefits.
“Can I sell my annuity payments lump sum?”
Experts agree that receiving a lump sum is not the best idea. Although the idea of having a large amount of money can be exciting, people have a tendency to spend, spend, spend. Structured settlement annuity benefits include having a guaranteed monthly income that can be adjusted for inflation. It is important to remember, however, that not all annuities are alike. Selling your annuity settlement will convert your annuity from deferred to immediate.
“Can I get settlement money now?”
The problem with a typical–also known as deferred–annuity is the fees: some annuities force the recipient to incur a penalty of up to 7% in the first seven years. They are geared towards payout in retirement, and force the recipient to pay annual fees of up to 3%. Not only are these types of annuities subject to income taxes (up to 35%, depending upon income bracket), but withdrawals made before the age of 59½ will also incur a 10% early withdrawal fee.
“Can I sell my structured settlement for cash?”
With an “immediate” annuity, you can start getting paid in a little under a month. You can use the funds to pay off medical bills and credit cards, take a long-awaited vacation, upgrade your house and car, or even start your own business. Restructuring a deferred annuity into an immediate one makes it possible to receive payments for decades, or even longer, without having to wait for retirement or to pay those kinds of high, unfair fees.
“Can I sell my structured settlement payments?”
Overall, it is important to find a reputable company to buy structured settlements, and to have a conversation about what would work best for your family, long-term. Selling your annuity is an important decision and with the help of an expert, financial solutions can be tailored to any need.