The intrinsic value of your existing structured settlement will likely increase over the next 4 years regardless of who is the next President of the United States, John McCain or Barack Obama. To best part is that to get this increase in value you don't have to do anything except keep receiving your payments as you always have.
Does anyone believe that taxes will NOT increase in next 2-4 years?
Whether you are receiving a structured settlement as a result of the settlement of and payment of damages in a physical injury, wrongful death case, or a workers compensation claim, such payments are excludable from gross income under the Internal Revenue Code (IRC 104(a)(1) for workers compensation and IRC 104(a)(2) for personal physical injury). Excludable from gross income means income tax free.
Investing the same amount of money at the same interest rate will result in a dramatic difference in your bottom line because of the tax leverage.
A 6% tax free rate is the equivalent of 7.32 % taxable at an 18% tax bracket and 9.23% taxable in the current maximum federal income tax bracket of 35%. We're just talking federal taxes. Now start lobbing in state and local taxes. If you move from the 18% to the 28% tax bracket you go from 7.32% taxable to 8.33% taxable. If the maximum Federal Rate goes to 40% then ignoring (for this exercise) state and local taxes, the 6% is equivalent to 10.17% taxable. What has the long term return on stocks been, with greater market risk?
ALERT to 18 year olds and young adults! The idiots that JG Wentworth pays off to scream from balconies are targeting YOUR money and your financial security.
Say you just turned 18 years old, are working part time while in school and just found out about this thing called a structured settlement that your parents set up for you when you were younger. Maybe you're thinking WTF is this and why do you need it? It's set to pay you a stream of income that works out to a 6% yield with a "AAA" rated insurance company. That's "no flat tire" man! Check out the taxable equivalent yield chart!
Consider that tax rates are likely to go up before you graduate. Then WHEN you graduate and start your first job, you WILL be in a higher bracket by virtue of your earned income regardless of what tax rates do.
What is effectively a bribe or kickback to tort victims such as the plasma TVs offered and paid by "cash now pushers" like Woodbridge Investments, are designed to cloud your mind and prevent you from seeing clearly about the future. Do you think these companies will tell you to keep your structure locked because tax rates are likely to go up? Don't be stupid!
Advice provided by Structured Asset Funding (a/k/a "Structured Ass") to sell your structured settlement to buy a Ferrari or boat is also just plain stupid! By their flawed logic you should impinge your long term financial security (that again, is likely to increase in intrinsic value by virtue of a tax increase) at an unfavorable rate to buy a depreciating asset. (i.e. one that is guaranteed to decrease in value. Don't be stupid!
- What potential exposure does a factoring company have from use of unlicensed solicitors to provide financial advice in their call centers advising tort victims to sell their long term financial security, knowing of the possibilty of a tax increase? How does that change if the advice is accompanied by a kickback such as a plasma TV?
- Do judges now have a greater responsibility to take into account the effect of a likely tax increase on the intrinsic value of the structured settlement that they are examining for the "best interest test"?