by Structured Settlement Watchdog®
On June 28, 2009 Roger Proctor, CEO of Genex Capital, offers the following financial advice to structured settlement recipients:
"You may have heard in the media in recent weeks that interest rates have bottomed and are slowly creeping back up. I (Proctor)believe that this is the beginning of a new cycle of incremental increases in interest rates over the next few years. When interest rates go up, the present value of a person’s structured settlement goes down. This is a simple truth. As such,if you are considering selling your structured settlement, now is the time to get the best rate".
One of the things missing from Roger Proctor's financial lesson "belly flop" is that we are an environment that is also likely to result in higher tax rates. Higher tax rates will INCREASE the intrinsic value of your existing structured settlement.
Have a look at this Structured Settlement Taxable Equivalent Yield Chart. which will help you compare the higher rate of interest required to equal income tax free structured settlement accumulation at various rates of return and various tax rates.
Postscript Mr. Proctor's "clairvoyance" about interest rates "over the next few years" (from June 2009) did not prove to be the case. Interest rates actually got worse! It would have been a bit of a shame for those who people who succumbed to the fear and sold their payments in 2009 (at a discount hoping that after tax interest rates would be sufficient to cover the discount) when they really did not need to. It's like feeling the need to take on more than a reasonable amount of debt because you have a zero or low interest rate card for 6 months. Even though companies like Mr.Proctor's provide a sometimes valuable service such as when people have no other alternatives to raise cash to meet immediate and pressing needs, the point is that there are many valid reasons to keep structured settlements.