Case Study/Comparison

How do structured settlements compare to other investments?
Consider the following three examples.

Example 1

Structured Attorney Fees vs. Taxable Investment Account

Compare a structured settlement annuity with an alternative taxable investment account. The taxable account would require an additional 2.7% rate of return to match the structured settlement annuity level payout


Example 2

Same rate of return comparison

Let’s assume that the structured settlement annuity and the taxable account both offered the same rate of return. Payouts for the taxable account would be $7,071 less than the structured settlement payout each year – that’s a total of $106,065 less!


Example 3

Same Rate of Return and Equal After-Tax Payments

Assuming equal rates of return and after-tax payments, the taxable investment account ultimately runs out of money during the payout period. Bottom line – the taxable account pays $126,791 less in after-tax payments than the structured settlement annuity payout and is depleted sooner.