The Settlement Alliance

4 Ways to Maximize Your Personal Injury Settlement

4 Ways to Maximize Your Personal Injury Settlement

Apr 25, 2017

Receiving a personal injury settlement may help provide a sense of closure to an emotionally charged time in your life. For many claimants, though, post-settlement can also be stressful. The realities of handling hundreds of thousands, or even millions of dollars, while trying to recover physically and emotionally can be overwhelming. The key is having a plan for your settlement, and one of the best financial tools you can utilize in your plan is a structured settlement annuity.

What is a structured settlement annuity?

A structured settlement annuity is a type of financial arrangement in which the defendant (or insurance company) assigns the proceeds of the settlement to a third-party assignment company, which then purchases a structured settlement annuity. You (the claimant) then receive periodic payments based on a schedule of your choosing. Your payments are 100% income tax-free, including any growth in interest on the annuity.

How can you maximize your settlement with a structured settlement annuity?

There are several different ways you can leverage a structured settlement annuity. Here are four examples:

  1. Use a structured settlement to supplement your daily needs: If you are out of work as the result of your injury, or you’ve had to take a lower paying job due to physical limitations, structured settlement payments can be arranged to fit your lifestyle. For instance, a monthly structured settlement payment can help pay for your daily needs by providing you with a steady, reliable source of tax-free income.
  2. Set up payments to decrease gradually as you get back up on your feet: Not only do structured settlements allow you the freedom to determine the schedule upon which you will receive payments, but you can also choose to have them decrease (or increase) over time. For example, if you know that you will be off of work for a year, but intend to return after that time, you could choose to receive larger payments up front, then schedule them to gradually decrease when you expect your regular income to climb back up.
  3. Use a structured settlement to start your retirement savings: A structured settlement can serve as the bedrock of a diversified retirement portfolio. Instead of taking your payments right away, you can arrange for your structured settlement to begin paying out on a future date, such as when you intend to retire. Until that time, the money will continue to grow at a pre-determined rate of return, and better yet, there are no limits to how much money you can place in the structure, unlike the contribution limits associated with traditional retirement plans.
  4. Use a structured settlement to fund college for your children: Instead of waiting for retirement to begin receiving payments, you could opt to receive the lump sum payments during the years in which you need to pay for college tuition. You would receive the payments tax-free and unlike traditional educational investment vehicles (such as 529 plans), there are no restrictions on what the money can be used to purchase. Also, if your child does not end up going to college, you won’t get hit with taxes and penalties that you may incur with traditional educational savings plans.

Contact our structured settlement experts to learn more

Our settlement planning team works with the most highly-rated structured settlement companies in the country. Contact us today at 800-464-2500 or info@settlement-alliance.com to learn more about how a structured settlement annuity can help you maximize your personal injury settlement.

We are proud to partner with the highest rated structured settlement providers in the industry:

  • American general Life Companies
  • Berkshire Hathaway Structured Settlements
  • Liberty Life Assurance Company of Boston
  • MetLife
  • Mutual of Omaha
  • New York Life
  • Pacific Life
  • Prudential