Market woes affect $42 million lottery winner
As a long-time structured settlement provider, we have often heard personal injury recipients decline a structured settlement because “they could do better investing themselves”. Interestingly, the tide seems to be turning with the recent market turmoil and steep losses among all asset classes. However, everyone that has elected a structured settlement placed through us, has received 100% of their payments, tax-free, at a rate between 5% and 7%. Month after month, year after year, structured settlements have provided a safe, reliable rate of return. With their special treatment by Centers for Medicare & Medicaid Services (CMS) in Medicare Set-Aside arrangements, a structured settlement should be part of almost any personal injury settlement that requires Medicare’s interests to be protected and where the claimant needs a reliable rate of return to meet his/her financial obligations.
This story by CNN illustrates the value of periodic payments in this economic environment.
LANSING, Michigan (AP) — A winner of a $42 million Mega Millions jackpot in Michigan may do something almost unheard of: receive the money in installments rather than getting a smaller, one-time cash payment.
The winner of the October 3 jackpot indicated a preference for taking the annuity. State lottery spokeswoman Andi Brancato says she can’t remember a Mega Millions winner in Michigan ever doing that since the game was launched in 2002.
The winner will be announced Friday at a news conference.
Lottery winners typically take a lump-sum payment with plans to invest it, but confidence in the market has dropped with the current financial crisis. The Dow has lost nearly 40 percent since closing at its all-time high a year ago.
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