Hi folks, J.G. Wentworth here. Do you have a secure grasp of both your current and long-term financial situation? Do you understand not just how much debt you currently owe, but also how financially secure you will be upon your retirement?
At J.G. Wentworth, the nation’s largest structured settlement and annuity purchaser, we pride ourselves on empowering our customers so they can make the soundest financial decisions, both now and in the long-term. With that in mind, here are four things we believe are extremely beneficial for you to understand about your money.
1) You are likely paying substantial fees on your long-term retirement accounts
Many of us have 401(k)s or other forms of retirement accounts that are managed by others. These financial service companies are likely charging you fees. It is imperative that you understand exactly how much these companies are taking from you in annual fees, and how much they charge per financial transaction. Such charges can reduce your retirement account by many thousands of dollars over the long-term!
2) Inflation: the silent plague
The sad fact is that due to inflation, money you keep in the bank over the long-term – or expect to receive from a structured settlement, annuity, or inheritance – will likely be worth much less in the future than it is today. Assuming an average inflation rate of just 2.5%, for instance, even $100,000 today, will be “worth” in goods and services, just $61,000 in 20 years!
3) The “cost” of debt is almost always higher than you think
Many of us gladly pay the minimums on our monthly credit card bills and mortgage payments and put off paying more for a later time. In many cases this is exactly what the companies that own your debt hope you will do. Many charge interest rates so high, while keeping your minimum payments so “manageable”, that you will end up paying much, much more in interest charges than you did on the original purchase! A better option: always try to pay more than the monthly minimum – or even better, especially when it comes to credit cards, never purchase anything you cannot afford to pay off in full immediately.
4) You may not have to wait to get future money owed to you into your hands sooner
In most situations, there are costs and penalties associated with getting money out of your 401(k) or other retirement accounts sooner than your planned retirement date. But while most financial advisors recommend that these be the last accounts you access, there are circumstances in which getting that money immediately, even with these penalties, is necessary.
The situation is very similar when it comes to needing cash from your structured settlement or annuity payments. Certainly, there are advantages to keeping these payments coming to you over time. But if you need cash now, and you do not want to wait for these payments to get to you at some distant dates in the future, you have an excellent option to get access to this money sooner.
Every individual’s financial situation is unique. J.G. Wentworth and its representatives do not provide financial, legal or tax advice. You should consult a qualified financial, tax, and/or legal professional for advice and information concerning your particular situation.