If someone offered you the choice of receiving $100 today or $100 one year from now, you would clearly take it today. That is because money has a time value.
A long term payout of your structured settlement actually diminishes the value of your money. A million dollars, paid out over 20 years time, can wind up being worth as little as $300,000 in today’s money.
THE IMPACT OF INFLATION
Inflation reduces the value of your structured settlement. The amount you get paid remains the same every year. But the value of that money decreases by the rate of inflation. Over a 30 year period, inflation can really take a bite out of the value of a periodic payment stream. Look at these prices from 1979 and compare to 2009:
This example can help you to imagine how little your settlement payments would actually be worth after a 30 year period. If you received $1,000,000 over a 20 year period, your payout would be $4,166 per month. At a 7% yield, the present value of your last payment would be only $1,032, less than one-quarter of where it started.
A lump-sum payment is your best defense against inflation. It’s the most sensible way to start building a secure future for you and your family. A Singer consultant will be happy to answer your questions and can provide you with an appraisal for a lump-sum amount. Call us at (800) 670-6777 and learn about the many ways we can help you to protect your award and realize your dreams.