6 Signs That it is Time to Sell Your Structured Settlement

Pre settlement loans

Unless you are Bill Gates, winning the lottery is probably something you can only dream of. What you might not expect is that winning the lottery might not provide enough money to alter your life that substantially. Off the top, you have to pay 25% in federal taxes and then depending on what state you live in, another 6-9% in state taxes. If you won $1 million, the amount you’d actually get after state and federal taxes is more like $682,500, and that is before any additional administrative fees you might be subject to.

After taxes and fees, your winnings might be issued in a structured settlement, which gives you an annual payment for 30 years or so instead of one large lump sum. If you find it more beneficial to access the full balance of your winnings instead of getting small payments over time, you can decide to sell your structured settlements. This gives you cash for your structured settlement in a lump sum, often at a fee of about 10% of the balance. Deciding whether a large cash settlement or annual structured settlement payments is best for you depends on your own situation. People who choose to sell a structured settlement most commonly come to this conclusion for the following reasons:

  1. Financial Control
    Having a lump sum gives you the freedom to choose how to use your money in any way that suites your lifestyle. Sometimes the best use of your money might involve larger payments than your get at one time with structured settlements.
  2. Paying off Debt
    The interest rates on your credit card debt might be higher than the fees associated with selling structured settlements. In this way, selling your settlement actually makes you more money than getting small annual payments.

  3. Lifestyle Changes
    Life changes such as marriage, death of a family member, and birth of a child make your financial needs different than they were when you were offered the structured settlement. With major lifestyle changes, it may become more advantageous to get a lump sum payment than receive smaller yearly payments.
  4. Making a Significant Purchase
    Having a large lump sum is advantageous when you want to make a large purchase such as a home or a car. Being able to pay for your major purchase with cash and avoiding mortgage or car loan fees may be less expensive than the fees you will pay in selling your structured settlement.
  5. Investing in Your Future
    Having the cash in a lump sum could enable you to use the money to make more money. Some people sell their structured settlements to start a business or to pay their tuition and get a college degree that helps them make more money in the long run.
  6. Creating an Emergency Fund
    You might choose to get cash for your settlement to have a nest egg in case of unexpected circumstances. Having something to fall back on in case of injuries, job loss, and emergencies provides peace of mind that makes every part of life more enjoyable.

The reasons people choose to get cash for structured settlements might vary, but they are commonly satisfied with their decision. About 92% of people who sell their structured settlements say they are glad they did it.

Have you ever sold a structured settlement? What made you decide to sell it? Leave us a comment with your story!