How does a structured settlement annuity compete in the current interest rate environment?
Structured settlement annuity yields remain competitive to other alternatives, even in cases where there is no lifetime payout. Even if you don’t need lifetime income, a fixed income investment may be part of, or may have been recommended to be part of, your portfolio. So let’s illustrate a structured settlement in which the payment flows are modeled after a fixed rate bond held to maturity. Generally the issuer of a bond pays to the bondholder a yield until maturity and then, the bondholder receives back the amount invested or principal. Listed below are internal rates of return on structure simulations of several types of 10, 15 and 20 year bonds and the corresponding yield on the bond that is being simulated. Once again, for this illustration, the bonds are assumed to be held to maturity. • 10-year Simulation 10 Year U.S. Treasury 2.60% taxable 10 Year AAA tax-exempt municipal 2.33% tax-exempt Structured annuity from A++XV Best’s rated company simulating same cash flow 2.83% tax-fre
Related Questions
- How does selling my structured settlement payments annuity work, do I have to sell all of it because I only need a little extra money now?
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