Lump Sum Settlements: Should You Take the Deal?
Once awarded a settlement in what ever capacity, there is sometimes the opportunity to defer payments or to take all the money at once. While it may seem like an obvious choice, let’s first consider some options. Please keep in mind that I am not an attorney or versed in law, so these are all opinion and if you are presented with this situation you should consult a lawyer for the proper handling in the settlement.
1.) Taxes - You pay more now compared to an annuity payment - if you make some wise investments, you should be able to grow more from your money.
2.) Liquidity - Since you have all the money at once, there is no need to worry about when the next payment will arrive, it should all be in your bank account(s)!
3.) Opportunity to invest - Since you are flush with cash, you can invest some amount to make even more Return On your Investment (ROI).
4.) Credit - Since you have financial reserves you’ll be able to build your credit line in case the day comes when you need it.
These are just some of the reasons to take a lump sum over an annuity - You need to consider all outcomes to decide what’s best for you.
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[...] File Bankruptcy Now wrote an interesting post today onHere’s a quick excerpt Once awarded a settlement in what ever capacity, there is sometimes the opportunity to defer payments or to take all the money at once. While it may seem like an obvious choice, let’s first consider some options. Please keep in mind that I am not an attorney or versed in law, so these are all opinion and if you are presented with this situation you should consult a lawyer for the proper handling in the settlement. 1.) Taxes - You pay more now compared to an annuity payment - if you make some w [...]
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Allen Taylor