Structured settlements are often created for injured individuals who must make their settlement payout last for the rest of their lives—sometimes 30, 40 or 50 years. They want to be sure they will not outlive their money. But what happens when claimants are injured in their 60s, 70s or beyond? Do structured settlements still make sense? In many cases, yes.

Working Seniors

For employed seniors, a life altering injury can greatly impact their retirement savings. An injured 60 year old who had counted on adding to his retirement fund for another six or seven years but now finds he can no longer work, can rely on regularly scheduled, guaranteed payouts from a structured settlement to help cover expenses.

Structured Settlements As Part of A Tax Strategy

Money grows tax-deferred within a retirement account but is taxed once withdrawn. Settlement payments for physical injuries are always tax exempt. By receiving structured payouts, claimants may be able to delay withdrawing funds from a retirement account–so the money grows tax-deferred longer.

Estate Planning

Once claimants pass away, the remaining structured payments become part of their estate. Through a living trust, a claimant can determine ahead of time how those funds will be distributed.

Maintaining Government Benefits

If settlement proceeds are paid through a Special Needs Trust, the injured party can still be eligible for government benefits.
Structured settlement recipients can also be creative in how they use their funds—to pay for grandchildren’s college education, lump sum payouts to adult children or to cover the high cost of assisted living.

The financial needs of every individual is unique. In some cases, a structured settlement may not be appropriate. Before any decision is made, the claimant should discuss options with his or her accountant and an estate-planning attorney.

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