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J.G. Wentworth Blog

Getting more money for your structured settlement payments

Did you know that the sooner your next structured settlement or annuity payment is scheduled to arrive, the more money you’ll receive from J.G. Wentworth for selling that payment?

To explain what we mean, let’s say you are on a twenty-year structured settlement payment plan but need cash now. According to the details of your original structured settlement agreement, you are going to receive a check for $10,000 two years from now, then another $10,000 a year for the next 19 years. You’ll receive a higher amount if you sell  that first payment, rather than the later, because it is the one scheduled to get to you soonest.

The reason this is so is because of inflation. Simply defined, inflation is an increase in the cost of living due to a rise in prices. It’s why five years ago you could have purchased a chocolate bar from the corner grocery store for a dollar, while today that same chocolate bar costs a dollar twenty-five. It’s also part of the reason why the amount we can offer for a structured settlement payment decreases the later that payment is scheduled to come to you.

Here’s another way to think about it: the $10,000 you receive this year will basically allow you to buy $10,000 worth of goods and services at today’s prices. But because of the annual price increases that historically occur due to inflation, that same $10,000 a year from now will probably be able to buy you approximately 2 to 3% less in goods and services. In fact, according to standard inflation rates, within just 10 years’ time, that $10,000 will actually be worth less than $8000 in today’s dollars, and within 20 years, it might (brace yourself) only get you $5000 in goods and services!

Understanding the long-term impact of inflation is an extremely important part of understanding the “true value” of your structured settlement or annuity plan, and in making the right choices when it comes to your long-term financial planning. It’s also a guiding force behind a principal we have mentioned before, that money is worth more the sooner it is received. Finally, it’s why if you need cash now, and want to get the most money for your future payments, you should consider selling payments that are due to come in sooner rather than later.

Nothing above is meant to provide financial, tax, or legal advice. You should meet with appropriate professionals for such services. If you have any questions related to selling your future structured settlement or annuity payments, please call J.G. Wentworth today at 877-227-4713.