Sell My Structured Settlement

Situation: Let’s say you want to raise money to return to college for your Master’s degree. Simultaneously, you’d like to continue growing a modestly successful home-based business that you started a year ago because you intend to operate it full-time after you graduate.

You want to retain your full income in the beginning while you’re in school, and provide some income stability for the first few years in business. But after you graduate and your business takes off, you anticipate needing less and less monthly annuity income. Last but not least, you’d like to establish a “Plan B” for your retirement, just in case the business doesn’t work out.

Structured Settlement: You are due to receive $2,500 each month for the next 10 years (120 months). You also will receive guaranteed incremental lump sums as follows: 5 years=$50,000, 10 years=$75,000, 15 years=$100,000, and 20 years=$150,000

One Option: You could sell $500 each month for months 36-60, $1,000 each month for months 61-84, and $1,500 each month for months 85-120. In addition, you could sell either the entire $50,000 5-year and $75,000 10-year lumps, OR keep the 5-year lump and sell the entire $75,000 10-year lump and $50,000 of the 15-year lump.

• The result is that you would receive your full $2,500 each month for the first 3 years while you’re attending college. It would reduce to $2,000 each month for years 4 and 5, reduce again to $1,500 each month for years 6 and 7, and reduce again to $1,000 each month for years 8, 9, and 10. In addition, depending on the lump sum option you choose, you will receive $50,000 in 5 years, $50,000 in 15 years, and $150,000 in 20 years OR $100,000 in 15 years and $150,000 in 20 years. Either way, you will receive $250,000 that you can earmark for your retirement savings.

Another Option: You could sell $2,000 each month for years 5 thru 7 and sell the entire 5-year and 10-year lump sums.

• The result is that you would continue to receive $2,500 each month for the next 4 years (2 years after you finish college to stabilize income during the business growth). Then it reduces to $500 each month for 3 years, and then increases back to $2,500 each month for years 8, 9, and 10. You would also receive $100,000 in 15 years and $150,000 in 20 years.

_{Keep In Mind: By focusing more on the nearer payments, you retain the value in the later payments. Depending on your circumstances later in life, you can either sell more payments later when they will be worth more, or you can simply wait and collect their full value when they become due.}