Structured Settlements Can Help Stabilize an Ambiguous Future

We’ve seen much turmoil in 2020, amid a pandemic, civil unrest in major U.S. cities and more. There have been casualties, manufacturing realignments made in record time and enormous financial strains on businesses and government alike.

The last time our nation faced an economic crisis of this magnitude was World War II, and in that instance, top marginal tax rates rose dramatically and didn’t meaningfully decline until the early 1960s. That was nearly 20 years of higher than normal taxation. Will the economic effects of this pandemic be similar? Only time will tell, but the “tax clouds” appear to be gathering.

THEORY versus REALITY

Former Vice President Joe Biden’s preliminary tax plan has been billed to only increase taxes on individuals who earn in excess of $400,000 per year. Will that be enough? Or will a higher percentage of taxpayers need to bear the burden? One thing seems certain: Taxes won’t be going down anytime in the near future for most people.

What our economy will look like or how financial markets will perform is beyond the financial meteorologists' ability to forecast. The THEORY has always been that the stock market will make ________% (you fill in the blank). In REALITY, once taxes and fees are factored into the investor experience, NET (“real”) returns are much less than people think.

Look to Concrete, Foundational Solutions

One thing that will never change is the value of common sense. Despite not having a crystal ball, we know that the core values of SETTLEMENT PLANNING remain the same. Here are some things to keep in mind:

• Guarantee the really important things in life – things like income, education and critical life goals.
• Recognize and manage risks along the way.
• Distinguish between needs and wants.
• Have a plan, but be prepared for the unexpected.

Structured settlements may be boring, but so is concrete. Look to them as a foundation of a well-made settlement plan. Market-based investments are wonderful vehicles for growth but are better suited for the upper floors of a building. Footings should be poured with instruments that carry guarantees.

In the face of higher tax rates and monetary policy likely keeping interest rates down for the foreseeable future, it’s a great time to build settlement plans with your Ringler settlement consultant. Unlike many financial professionals, we understand the dynamics of working with accident victims and their families.

And throughout the pandemic, Ringler hasn’t skipped a beat. Our investments in technology and diverse national representation have allowed us to continue serving the needs of all those involved in the claims and litigation industry. More importantly, we’ve been able to help make sure that those who have suffered injury or lost a loved one can move forward with security and hope for the future.