Non-taxable annuities from the nation’s top life insurance companies drive the return on a Ringler Associates structured settlement. So let’s compare both, apples-to-apples. Because a settlement annuity is a guaranteed source of funds paid on a tax-free basis, it is very difficult for an investor to match the rate of return generated by a structured settlement. The tax equivalency table below illustrates how much additional interest an investor would have to earn in order to match the before-tax rate of return offered by a structure, assuming the current tax brackets.*
In order for an injured party to earn the 6 percent return rate of the structured settlement, he or she would have to earn an additional 3.23 percent on the cash investment at the 35 percent tax bracket (9.23 percent less 6.0 percent), an additional 2.33 percent at the 28 percent bracket and 2.0 percent more in the 25 percent income tax bracket. In addition to the added interest, the self-investor would have to subtract any local and state taxes, as well as the related brokerage or investment fees. And unlike traditional investments, you’ll enjoy peace of mind knowing that the structured annuity is guaranteed no matter what happens in the market.