How to invest structured settlements
Imagine someone is injured and permanently disabled after a car accident. As a result, they receive a structured settlement from an insurance company paying out $4,000 a month over the next 20 years. Because this structured settlement does not provide an immediate cash payout to the recipient, the injured party can sell the cash flow at a discount in exchange for a lump sum payment which means that they can take a loss on their settlement in order to receive a lump sum. This presents investors with a unique opportunity to purchase these monthly payments through a self-directed IRA and lock in a rate of return for the judgment or settlement — all on a tax-deferred (or tax-free in the case of a Roth IRA) basis.