Structured Settlement Mutual Funds

Structured Settlement Mutual Funds

Even though you are hell mad at the driver of the large conglomerate company for the accident which have rendered your left arm useless, you are still happy that the arbitration has been settled. Now you have been awarded a large structured settlement. You are a investment type of person who loves to lay an egg and watch it hatch and allow that chicken to lay dozen more eggs so you investment will sure to multiply. You are seeking a good investment for your structured settlement and you are looking at mutual funds. Of course, whenever you are investing money in anything, you must always look at the instruments in dept and see if it is the best vehicle to drive you investment forward or is it just a park car with only reverse gear working.


 What is it you want to achieve?

• You want a good investment for your structured settlement money.
• You want long term stability an good returns
• You want flexibility

When you are awarded a structured settlement, an insurance company sets up an annuity in order to pay you small portions of the money at regular intervals. So you will get you periodic payments. You money is safe but you will not see any growth on this type of money that is safe but sleeping.

Investing in a structured settlement mutual fun, your money may be invested in one or more mutual funds as to tap in on security of the fund while experiencing growth. Mutual funds are groups of individual equities (stocks), the make-up of which is closely managed in an effort to maximize returns. The individual stocks in any mutual fund can change regularly.

This introduces an element of risk - sometimes significant risk. So, if you have your structured settlement money in a structured settlement mutual funds set-up, you have the potential for higher rates of return, but you also incur more risk that you'll lose some of your money. You have to remember that the bigger the return on investment, the higher the risk is. Your choice is to invest your structured settlement cash in mutual funds, keep getting a annuity or just go sell your settlement.


The upside to investing in the mutual funds is the potential for earning more if the mutual fund's value increases. From a tax standpoint, income you receive from a fixed annuity is tax-free in most cases. However, structured settlement mutual funds are subject to capital gains taxes and the possibility of some income taxation. Keep in mind that if your mutual fund loses money, the losses can be written off of your tax bill (under most circumstances), so it's not all bad if things don't go well.

Choosing a standard structured settlement fixed annuity means you are locked into a set payment amount and schedule. If your needs change down the road, this may cause you some financial hardships. With structured settlement mutual funds, you are allowed to move money around (within certain strict limits) from fund to fund. This will allow you to adapt to changes more readily.

As should be clear by now, this is not an easy decision. There are many pros and cons, whether you choose structured settlement mutual funds, the fixed annuity option, or any other alternative. This is one reason why it's a smart move to enlist the services of a competent lawyer who specializes in this area of the law. It's also wise to educate yourself as thoroughly as possible before making the final decision. The day will come when you can use something you read here to have a beneficial impact. Then you'll be glad you took the time to learn more about structured settlement mutual funds.