Case Study and Comparisons

How do structured fees compare to other investments? Consider the following three examples comparing structured attorney fees with taxable investment accounts.

Example 1: Required Rates of Return

Compare a structured settlement annuity with an alternative taxable investment account. The taxable account would require an additional 1.9% rate of return to match the structured settlement annuity level payout.

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Let us assume that the structured settlement annuity and the taxable account both offered the same rate of return. Payouts for the taxable account would be $4,113 less than the structured settlement payout each year — that’s a total of $61,695 less.

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Example 3: After-Tax Payouts

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 $70,558 less in after-tax payments than the structured settlement annuity payout and is depleted sooner.

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