THE TIME VALUE OF MONEY
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 20 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 today:
|
Average
Price
|
1979
|
2009
|
|
New house
|
$42,900
|
$235,300
|
|
New car (midsize)
|
$3,997
|
$31,000
|
|
Loaf of bread
|
$ .36
|
$1.52
|
|
Gallon of gas
|
$ .63
|
$2.98
|
|
This example can help you to imagine how little your payment would
actually be worth after a 20 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 Account Executive will be happy to answer your
questions about our products and can provide you with an appraisal of
your lump-sum payment 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.
