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Bill Wright & The Wright Team
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Structure Strategies

Parents Protect Sam’s Future

Like many parents these days, Ben and Jennifer waited until they were in their 30s before having children. Their youngest son, Sam, was only 10 when he was thrown from a sled in a freak accident and suffered a spinal cord injury that resulted in paraplegia.

Ben and Jennifer were nearly 50 when the case was settled, so they knew they needed to plan carefully to ensure a secure future for Sam, even if they weren’t around to see him through. Education was a particularly high priority given Sam’s extraordinary musical talent (he was a piano prodigy from age 5). With the help of their Ringler consultant, Ben and Jennifer were able to compare and plan for the projected cost of tuition at several prominent music programs.

“Every dollar in that settlement is now worth more than a dollar, thanks to the structure arrangement,” said Jennifer. “First, we know no matter what happens to us or the market, his money and all the tax-free earnings are guaranteed to be there when he starts college. Second, we know that the return on a college education averages $20,000 more per year than not having a degree. We were devastated by Sammy’s injury, but listening to him play now and thinking about his bright future takes some of the hurt away.”

(Note: While Structure Strategies is based on actual Ringler case histories, the names and images of the people involved have been changed to protect their privacy.)

Look to the Fed and Markets for Direction of 2023 Economy, Ringler CEO Says

Peter JachymPeter Jachym is the interim CEO of Ringler.

Veteran investment banker. Private equity investor. Strategic consultant. Ringler board member for six years and now interim CEO. Peter Jachym has expertly set the course for capital development at several of the nation’s largest insurance companies and investment management firms. Here is what Jachym had to say during a recent interview on Ringler Radio about the direction of the U.S. economy in 2023 and what it means to the various parties involved in a settlement.

It Starts with Inflation

“I think everything begins with prospects for inflation,” Jachym began. “And I think probably the best way to talk about this is to look at what the markets and the Fed are currently telling us about inflation. And then talk about how that affects our business and how it affects structured settlements and structured settlement annuities.”

The Fed is saying they need to keep interest rates high because inflation is proving to be more intractable than initially thought, which could trigger a recession. However, Jachym points out that the yield curve on Treasury bonds is inverted, leading one to believe that inflation may not last that long. Two different scenarios, then:

 Scenario 1: Market Volatility

“Now, if you think about some of these macro factors like the potential for a recession, like increased inflation,” he continued, “that probably points to more market volatility going forward than we’ve had recently. So, that sense of having the security of a structured settlement is even more important,” he said.

“And the other factor, of course, is with the increase in interest rates, structured settlement annuities provide a good and very competitive rate of return relative to everything else in the market right now. So it’s almost like a win-win situation,” Jachym observed, “lower risk and, at the same time, really good returns.”

Scenario 2: Inflation Eases

“If you take the other scenario, and you say inflation is going to be really short-lived in the United States,” he said, “and it looks more like inflation will come down to a normal level, say 2% by early 2024, interest rates will come down along with that. And if you’ve bought into a structured settlement annuity now, you’ll probably get fantastic returns relative to what might be available in the future.”

“So in either inflation scenario, I believe the structured settlement annuity looks really good, and it’s a really good time to do it,” Jachym concluded.

Security Always the Right Advice

No matter how the economy goes, now and in the future, Jachym emphasizes that security should be the priority of everyone involved in a settlement. “The people that we’re working with on structured settlements are injured. They need the money to last for a period of time. They need to make sure that they keep purchasing power on those assets, that it continues to provide for their needs,” he said. “It’s really important, both from a cash flow and from a return basis, then, to have something like an annuity for at least a significant portion of those assets.”

You can listen to the entire interview here with Ringler interim CEO Peter Jachym. And for answers to your questions about settlement planning and structured settlements, contact your Ringler consultant today.