Buying a car or getting into a college are some of the biggest decisions anyone can make. They go a long way in establishing financial and social independence and are often the most avid goals a twenty-something will make before investing in a house or a retirement fund. However, they’re not always easy to pay for. When you look at methods of payment such as annuity vs lump sum lottery winning payments, sometimes you have to decide the most feasible way of getting what you need without breaking your bank. Below I’ll explain settlement payments and the difference between lump sum and annuity to better give you an idea on how you’ll tackle your dream projects.
Annuity VS Lump Sum Lottery Winning Payments
So, what is annuity and how does it work? Annuity is a specific amount of money that’s paid to someone each year in order to create a steady income flow or bolster the amount of savings in your bank. Many use it to create a foundation for a future retirement plan while others use it to invest in certain projects while being protected from fluctuations in market pricing or rule changes. An estimate 37,000 Americans use structured settlement money annually and ninety-two percent of those who sold their settlements were satisfied with the decision they made. A lump sum payment, on the other hand, is providing a one-time payment upfront rather than over time. Should you be lucky enough to win the lottery, you could even turn that into a winning payment!
Where Do I Start?
Do you want to start a business or are you needing a used car? Do you have a child on the way or have you considered saving up for a future house? All of these questions should be answered before you consider applying for annuity or a lump sum payment. The average structured settlement payout can reach over $300,000, which should be taken into account depending on what you’re saving up for. Immediate annuity can have you receiving payments within the following month and selling a structured settlement can free you up to pay for things you need now, like tuition or a new apartment. With annuity and lump sum payments, your options are as varied as your goals are. What are you going to invest in?