In my opinion the Structured Settlement Authority blog is a tsunami of bad information… here’s yet another direct excerpt:
"Have you ever considered getting cash from your structured settlement to use for investment purposes? People try to save money for the future and invest in various ways. Liquidating a settlement could be an alternative source of funds. Some invest in property, others in the stock market, all hoping that they can make a good return to live on comfortably in old age. For those who want to avoid major risks in investing a retirement fund such as a 401K plans might seem like a good option"
First of all, do not follow the advice of the Structured Settlement Authority in that last sentence!
Do the people that publish this blog read what they publish? Suppose you are receiving payments from a structured settlement , and you "want to avoid major risk", these ninnys suggest that you first sell your structured settlement payment rights at a deep discount and then put the deeply discounted proceeds into a 401(k). That’s right… these ninnys want you to take it out of a guaranteed tax-free stable structured settlement, put it into a tax deferred trust with exposure to some volatility that carries with it a further 10% penalty if you withdraw prior to age 59 1/2**. The other thing is can you even do this? Such qualified plans have contribution limitations and defined contribution retirement plans are based on percentage of earned income. Hopefully this type of deal would never get past a judge.
To the author of Structured Settlement Authority, I’d like to send you a giant bottle of extra strength Pepto. Your blog runneth over!
** a similar flawed strategy was highlighted in our 3-22-2006 Structured Settlement Advertising Wall of Shame involving Dos Coyotes funding.
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