October 11, 2018 - Maybe you've been sitting on the structured settlement sidelines these past few years because "rates are too low."
Maybe the recent bull market-on-steroids proved too alluring and you've been dabbling in the market yourself with much success.
Maybe you've been gobbling up real estate en route to your Pacific Avenue-through-Boardwalk Airbnb empire and just couldn't be tempted with straightforward guaranteed, tax-advantaged income.
If you're one of our regulars who always appreciates the value of annuities,
THANK YOU! We're honored to be at your service and grateful you place your trust in us.
But if you've hit the pause button on structured settlements and retirement annuities these past few years, we're here to share with you why now may be the perfect time to revisit your position and consider this time-tested safety net with a new set of eyes.
3 Reasons to Consider Structured Settlements NOW
Reason 1: The Rates
Tax-free (physical injury claims) and tax-deferred (nonphysical injury claims and attorney fees) income has always been in vogue for those seeking safety, security and certainty.
But yesterday's close of the 10-Year Treasury at 3.21% was its highest since the summer of 2011. 30-year Treasury yields hit a 4-year high and the 2-Year had its best showing (yield-wise) in over a decade.
While this may be bad news for bond investors (rates move in opposite directions of bond prices), those contemplating structured settlements and structured attorney fees should find returns to their liking as of late.
Example: I recently provided a 60-year-old male (rated age of 64) with a quote for immediate lifetime income with 15 years guaranteed.
4.35% internal rate of return (IRR), or a tax equivalent yield of 6.50% assuming a 33% tax bracket and Normal Life Expectancy.
U.S. Treasuries aren't directly tied to life market structured settlement rates, but there tends to be a measurable correlation.
Reason 2: The Market
If your plans are to simply ho-hum your way through the stock market in the coming years, you're likely overly confident that tariffs, trade, elections, Fed policy, national debt,
obscene (and once illegal) stock buy-backs
, etc. will have little or no negative impact on your money.
Some scary things you may not have noticed about the stock market:
1. The Dow Jones Industrial Average (DJIA) hit an all-time high of 26,616.71 on January 26, 2018. A bunch of ups and downs later (but mostly downs), it didn't eclipse that mark again until September 21. But then . . .
2. Yesterday, the market tanked 831.83 points (3.15%). The S&P 500 fared slightly worse. And then . . .
3. Just for good measure, the DJIA shed another 545.91 points (2.13%) today, closing at 25,052.83.
NOTE: On a $1,000,000 deposit, that's a $52,800 loss in two days.
With 100% accuracy, I can guarantee you that the market will absolutely, positively decline in value losing money along the way.
I just can't tell you when it will happen.
Neither can anybody else, though. Sure, you might make it up and then some the very next day or an hour later, but volatility is part of what you sign up for when you invest.
If you've lucky enough, you'll "get out" of the market at the right time and preserve your gains.
Rolling some of those gains into guaranteed lifetime income is like walking away from the blackjack table when you're on top. Stay too long and you might regret it.
But you'll never regret holding onto money you didn't lose.
Reason 3: You Can't Lose
When you lock in a guaranteed structured settlement, structured attorney fee or retirement annuity, you win by solidifying a chunk of your future.
No surprises. No maybes. Just a predictable outcome.
"Three things can happen when you throw a pass, and two of them are bad."
Peace of mind comes from knowing your future is secure. Numerous studies reassure us that people with guaranteed future incomes are happier than those whose futures are not guaranteed.
Don't risk money you can't afford to lose. Speculate if you must. But do so with your Monopoly money, not the money you'll need for your rent or house payment, food, car payment, utilities, insurance premiums, etc.
Play it safe. Run the ball.