Mike, this is a big question, while getting some feedback on the Net is OK ( without of coarse discussing specifics, amounts, etc....) you really need to get a referrel to a good financial planner in your neck of the woods. I am assuming you have worked your whole life to get to the place you are at, now you REALLY NEED to do your homework, get connected to the right people, and protect your principal while generating an income that balances your risk / reward ratio. If you have an accountant they can often lead you in the right direction. Be smart, these decisions will make or brake your future financial picture.....if you need any specific guidance (general) please please ask away.

Mike,

Are you familiar with Dave Ramsey?  He's a well-known financial expert who is very down-to-earth & practical.  His website is http://www.daveramsey.com/home/.  On his site, he has referrals to Endorsed Local Providers (ELP's) all over the country.  These are financial experts who you can meet with to discuss your financial situation & how to best handle the money that you have.  These folks advise & educate you so you can make a well informed decision.  You might want to check his website & see if there are any ELP's in your area.   

Lucky Mike wrote:

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Thank you Gene.......yes Im more interested in proper steerage........I guess my attorney would be a good place to start, there is no doubt a finacial planner and several others will become part of my day to day life.....

 

 I figure when the hospital releases me this winter Im getting back in the coach and finding me a few good hiding spots until the media frenzy settles down.......and then sneak back into my nomadic free spirited simple life I miss so much!!!!

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Sounds like a great plan Mike, Myrtle Beach is real nice in the winter, maybe we will see you there.....

Jake the attorney has already completed all the estate planning....wills ,executors , trusts and legal protections for my children..........my only decision at this point is if I want to anuitize the payments or accept one lump......for tax reasons Im leaning on the payment program over 10 years...to include full life & medical for myself & family...

 

Then again, Mike, if you annuitize and take payments over time, would your heirs still be able to receive any remaining payments?  If you choose annuitized payments and your heirs are NOT entitled to receive the remainder, then you are betting your life span will be longer instead of shorter.  One never knows.  Something to most definitely think about. 

And, Mike, listen up... if you do take a lump sum and invest with a reputable investor, it sounds like your investments could provide you with a very comfortable monthly income.  If you take payments, your earnings on investments would be less and less over time since you will probably end up cutting into the principal as time goes on.  So, I ask you... why leave money on someone else's table and not your own.  If it were me, forget the taxes.  They're a fact of life.  I would much rather be in control of MY money (and the income a larger sum would generate) than to let someone else hold on to it and dole MY money out to me over time. You can't generate a lot of income if you don't have a lot of income to generate income!

I am not giving professional advice as I am not a financial expert.  This just makes sense to me.

Good luck, Lucky Mike!  (Did I say LUCKY?)

With all due respect, nothing was ever said about a 401(k) or IRA.  Never, never, EVER take a lump sum from those type of accounts!!!!!  Not only would you pay taxes, but a penalty if taken out too early.  (I have no clue your age!)  Anyway, if this is a settlement of some kind or winnings, then you could do a lump sum and go ahead and pay the taxes, although there are some settlements whereby you do not have to pay any taxes whatsoever.  Look, you will have to pay taxes on the money, anyway, so why not just pay the taxes, get them behind you, and move on with the remaining sum of YOUR money to INVEST for monthly INCOME?  To my way of thinking, it's kind of like taking a bunch of money out of a paycheck for your 401(k).  If you don't see it in your check, you don't miss it.  The same with taking a lump sum.  Focus on the NET, not the GROSS.  The idea is to have enough principal that will generate a sufficient monthly income, bottom line.

Annuity?  Mike, please, NEVER.  What an annuity does, among other things, is put money into the pockets of the person selling it to you.  Even Dave Ramsey would tell you that is THE WORSE INVESTMENT YOU COULD EVER MAKE... if you can call that an investment!  Hence, another reason to contact an investor.  The markets are a fine balancing act.  If you had the knowledge and understanding on investments and how to invest, wouldn't you be a millionaire already?  Alternatively, if you have a good investor whom you like and trust, he/she can work miracles!  And, they know a lot about tax implications of various investments.  Just my two cents worth!

Again, this is not professional advice.

Good luck!

-- Edited by Mary Sunshine on Wednesday 19th of September 2012 07:41:25 AM

mary ....this is a structured Settlement , I worded it wrong by calling it an annuity. By taking it over a 10 year period it carries a greater tax shelter and just in simple 2% interest in the first year would gross over 250k....

I want to protect it for a future for someone else and keep it simple at this point until I can grasp an understanding of what has happen and what can be done.

My children are still young (14 & 16 ) This is their future and unfortunately Rags to riches tends to be wasted if not handled right......Im not in it for the money anymore. my life will be as it is and comfortable til my bucketlist is completed...


Unfortunately, like all others who fall into this category the stress and attention that goes with it has now fallen into my lap. the money is nice but I cant buy back the losses and life it cost to get it.

Mike, you need good professional investment and tax advice. Making the wrong move can be costly. Making the right moves can set your family up for their future years.

Mike, structured settlements are set up based on current interest rates, which right now are historically low - meaning you will receive far less than you would if the rates were higher. And once you've locked in your structure, it's a done deal, leaving you with far less flexibility than another type of investment. I've seen many situations where people's situations change and they end up selling their structured settlements later for HUGE discounts. When I used to practice law (don't take this as legal advice - talk to your own attorney) I always emphasized that as a lawyer, I was NOT the client's financial adviser. You need to connect with that person in addition to your lawyer. Taxes are complicated and there may be many options depending on the type of settlement. It sounds like you're dealing with enough money to justify a tax planning expert - just make sure they'd don't advise getting too creative so you run afoul of the IRS. My final advice would be pay by the hour - avoid any financial planner/broker that wants a percentage to "actively" manage your money. I'm not an expert on this - just my own advice and what I've read. (AARP has some good general financial planning articles as a place to start.). Good luck.....Lucky Mike!

I'm not sure if this is the right place for this post, but health insurance costs have been one of our biggest concerns planning for an early retirement so we can start full timing.  We thought we were in good shape because my husband''s employer of over 20 years promised we could continue our coverage through them after age 55, for the same cost as when DH was working.  Then his division of this very large food company was sold to another very large food company and, just like that, goodbye cheap retiree health coverage (among other things).

I've been researching the Affordable Care Act (but it still seems to be a work in progress).  As of 2014, it seems it may be a great option for us as pre-Medicare retirees.  Our only real "income" will be interest from our non-IRA savings, which certainly will be less than $60,000.  My understanding is that in these circumstances we can buy insurance through the "exchange" at a cost of no more than 10% of our income.  Does anyone know if that is true?  I also understand assets don't count against you - but if we are using assets (house sale proceeds) to live, will that count as income?  Last question: will the answers vary by state in which case we should think about this when deciding a residency?  

If anyone else has been researching this or knows of a good resource for information, we'd really appreciate it.  We're healthy now, but if we don't choose hubbie's very expensive retiree plan when he leaves work, we can't pick it up later so we want to make the right choice.

Thanks!

 

Mary, 

i found more info a this topic on am early retiree website.  I then followed a link to an estimator tool for pt he cost of purchasing care from an "Obamacare" exchange, and the cost to us is  less than $400 a month for better coverage than we would get from my husband's employer at 3 times the cost. (Assuming our magi is $60,000).  Assets apparently don't matter, so the way I understand it, our interest income would count, but not any money we spent from our home sale.)

I wonder if we're talking about the same second largest food company in the world who sold a division to the largest food company?  The former bartered the company employees as though it owned them, all the while assuring employees that the new employer would continue the benefits employees had worked many years to earn.  After the deal went through, it. Was like pulling teeth to get any details, but one by one we've learned benefits have been cut or reduced....and it's still ongoing.  

I guess if we continue this it belongs on different rent thread? Can this be transferred?

 

thanks and commiserating with you!

one Mary to another