Sorry Einstein structured settlements but as it has been said before – Einstein does not equal more cash
If there is a secret formula to obtain more cash from your structured settlement annuity, lottery, or investment annuities it’s this, MC=MO . More cash equals multiple offers. To ensure you receive the most money for your settlement call multiple companies and compare the offers. In the end you’ll be happy you did.
Is it Einstein or just an average client?
Taking a look at the Einstein website under reviews, they have a video testimonial of a Hispanic client praising Einstein for their large lump sum. The young lady claims to have won the lottery but was just receiving $15,000 a month for life; Einstein helped her convert her payment into a lump sum so she could buy an oceanfront property in Miami and a Bentley.
At the end of the day individuals who sell their annuities, structured settlements and lotteries can do what they want with their lump sum, but gloating about buying an oceanfront property and a Bentley can hardly be considered a typical and noteworthy reason to sell your payments. This reason will certainly not satisfy the best interest determination by the judiciary across many States in the US.
Perhaps a more realistic example is a father who inherited his recently deceased son’s annuity and is selling the future payment streams to pay for the funeral expenses that are in excess of $8,000.
There have never been more companies offering to buy your future payment streams in exchange for a lump sum than there are today. While the process of selling an annuity, lottery, or even a pension is not complicated the decision should not be taken lightly. Consult with your trusted friends, family and advisors about the decision and always research the company you are considering doing business with.
Boston College’s Center for Retirement Research suggests using Social Security for Retirement
The Center for Retirement Research at Boston College released a study stating that the best way for people to utilize their retirement income more effectively is to “buy” an annuity from Social Security. This statement, of course, is completely misleading and the whole concept should be investigated further[vi]
According to Pat Foley, president of U.S. life insurance distribution and marketing at Genworth Financial, approximately 10,000 people turn 65 every day and this will continue over the next 20 years.[i] As these individuals approach retirement age armed with only their 401k plans and Social Security as their only means of support once they stop working, there is a huge need to minimize risk while preserving wealth. Fluctuation interest rates as well as longevity are all issues to consider. Obviously, no one wants to outlive their savings or pay huge fees to protect their nest eggs but recommending Social Security as an option seems a little optimistic.
No one can “BUY” an annuity from Social Security. You delay claiming your Social Security benefit in order to get a higher pay out later. Instead you’re using your savings to support yourself. Here’s the one major problem with that. What if you spend your cash supporting yourself to hold off for the higher Social Security payout only to discover there is nothing left when it comes time for you to retire?
In their 2011 report, the Social Security Board of Trustees stated that by “2023, total income and interest earned on assets are projected to no longer cover expenditures for Social Security, as demographic shifts burden the system. By 2035, the ratio of potential retirees to working age persons will be 37 percent — there will be less than three potential income earners for every retiree in the population. The trust fund would then be exhausted by 2036 without legislative action.”[ii]
Therefore if you didn’t invest your money, decide to live off your cash and use Social Security as your annuity you could be in for a rude awakening come 2036. While annuities do have their faults—they’re expensive, underperformers and restrictive—for the most part they do provide risk adverse individuals with a guaranteed income stream.
Some products, like Indexed annuities, take hybrid approach from variable and fixed annuities because they have stability of a fixed annuity with the growth potential of a variable annuity. Indexed annuities have a loss provision which protects the nest egg even if the stock market goes down. Unless you make a withdrawal, the value of your annuity will not decrease. The insurance company invests most of the principal in bonds ensuring the policy generates a small annual return. In addition, the insurer uses a small portion of the premium to buy options in a stock market index such as the S&P 500. Options that are exercised can result in additional interest credited to a policy. As the demand for more risk adverse products rise, insurers will create newer products with better growth potential. [iii]
Apparently other government entities believe that annuities would be a good investment vehicle for retirement. In July 2011, US Government Accountability office (GAO) put out a report stating purchasing an income annuity from an insurance company is “an alternative to self-managing periodic distributions from savings" because it protects retirees from underperforming investments, overspending as well as from the risk of outliving their savings. It also claimed that inflation adjusted annuities reduces the risk of diminished buying power. Also some experts dispute that claim.[iv]
Other things to consider
Some investments allow the investment to be passed on to heirs. Social Security survivor benefits are for spouses and dependent children as well as disabled children only. If your financial situation changes some investments like annuities are not easily converted into cash. Some can’t be cashed out without suffering penalties and some cannot be cashed out at all once you start collecting. While some annuities can be sold on the secondary market for a discount, some cannot. Social Security, on the other hand, can not be liquidated or sold.
When it comes to retirement savings you’re never too young to start saving. It is also important to consider asset allocation and getting professional advice. Asset allocation is not putting all your eggs in one basket so if things go wrong in one investment class you don’t lose everything. [v] If you rely solely on one type of investment, especially one that is extremely inflexibl,e you’re leaving yourself open to possible financial hardship in the future.
[i]http://rescuecapital.com/blogs/2012/01/genworth-re-enters-the-indexed-annuity-market/
Got cash flow problems? Rescue Capital has got your cure.
Sometimes stuff happens that is out of your control and you need money fast. Perhaps you thought of using a payday loan, title loan or refund anticipation loan to get yourself out of a jam. What most people find is that they only dig themselves deeper into their financial hole because these loans are so expensive and risky.
What if I told you there was a way to get the money you need now without having risk of high interest loans with reoccurring payments? It is really a very simple concept that can give you access to your future money today, in the convenience of a lump sum payment. So what’s the catch? Well you need to have periodic payments from a structured settlement annuity, divorce settlement, a single premium immediate annuity, life insurance policy, inheritance, royalties, or a pension in order to take advantage of this program.
With the Illiquid Asset Purchase Program from Rescue Capital, you can sell some of your future payments for a lump sum cash payment. Rescue Capital has an A+ Rating with the Better Business Bureau and offers the best rates around. They’re rates are much lower than high interest loans and credit cards. There are no income requirements or credit checks because selling your future payments isn’t a loan. There is no affect to your credit score and you can’t default. You do not have to pay any of the money back either.
According to John Zepeda at Rescue Capital, "In our current economic climate we are seeing many people who living paycheck to paycheck. So when an emergency happens they’re in a real bind. Luckily, they can use a portion of their future payments to get the money without incurring more debt."
Rescue Capital’s team of experts will guide you through the entire process to ensure all your financial goals are met. Many individuals think that they have to sell all their payments and they don’t know about other options such as deferment. With a deferment you can delay selling your payments for several years, which allows you to get the cash now but your periodic payments won’t be reduced until later.
According to Rescue Capital, COO Maureen Healy, “Sometimes you need a small amount of money to get back on your feet such as money to move or start a business. In those cases a deferment makes a lot of sense.”
Rescue Capital can provide you with a free market analysis of your asset as well as no-obligation written quote.
Resolutions aren’t solutions for financial problems
How lifestyle changes can improve your bottom line
Another year comes to an end and many of you are starting to think about 2012. Perhaps you may try to come up with resolutions like getting out of debt, quitting smoking or losing weight. Every year approximately 45% of American adults will make 1 or more resolution. However within 6 months almost half of those resolutions were abandoned.
There are many reasons why these resolutions fail including unrealistic goals, not having a plan in place goals that are too broad and no accountability. According to some experts, resolutions are about taking something away, leaving a person feeling deprived. By accentuating the positive you change the whole mindset. Instead of making a resolution, make a commitment to change in the New Year.
Whether it is looking better, feeling better or breaking the cycle of debt you need to look at what are the underlying cause of the problem and address it first. By breaking habits such as shopping when you are depressed, not taking account small daily purchases and stop impulsive spending you will be headed in the right direction.
Another issue is that consumers are often too optimistic about potential earnings. For example, relying on a tax refund, future raises or selling future annuity payments to pay for items later can be dangerous to your finances. If you do not get the amount of money you need to pay off your purchases you leave yourself open to huge interest rates or penalties.
So maybe you decided you want to make a change but you’re not sure how to get started. The best way to start is to define what you want to accomplish and make a plan. Make sure you develop obtainable, measurable goals and develop rewards for when you accomplish your goals. Below are some suggestions on how to get started.
- Define your financial goal. Whether it is to become debt free by 2013, create an emergency fund or go back to school put it in writing.
- Determine what is holding you back from accomplishing those goals. Is your spending getting in the way of your dreams, perhaps you are not sure.
- Create a spending diary to see where your money is going. Track every purchase you make no matter how small it is. Identify places you can make small changes that can really add up.
- Create a budget and stick to it. Don’t forget to save money too. It will help you avoid the debt roller coaster when emergencies happen.
- Reward yourself. Give yourself little treats that won’t derail you when you hit milestones.
- Don’t let setbacks derail you. If you have a setback, don’t quit trying to obtain your goal. Just regroup and move on.
- Change your relationship with money. Avoid triggers like shopping your way out of a better mood and spending mindlessly by developing better habits such as exercising when you’re depressed or leaving your credit cards at home.
- Get organized. Late fees and penalties waste money and they are damaging to your credit score. Develop a system that works for you and pay your bills on time.
- Get professional help. Sometimes you are in over your head. Perhaps you need professional credit counseling or financial advisors who can help you develop a system that works for you.
- Keep your options open. Sometimes your financial situation requires a more drastic approach such as selling some of your future annuity payments to avoid foreclosure or to pay off high interest debt. Remember to research all your options and don’t make hasty decisions.
If you have periodic payments from a structured settlement annuity, a divorce settlement, a single premium immediate annuity, life insurance policy, inheritance, royalties, or even a pension and you want to know more about selling some your future payments, call Rescue Capital at 866.688.3532. With today’s lower rates, your future payments could be worth more than ever before.
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