Structured Settlement Annuity Calculator

A Structured Settlement Annuity Calculator converts a lump sum settlement amount into a stream of periodic payments - monthly, quarterly, or annually - over a fixed term or for your lifetime. Enter your total settlement amount, any upfront lump sum, payment frequency, term or lifetime duration, and discount rate to see your periodic payment, total payments received, total interest earned, present value, and a lump sum vs periodic comparison.

In the United States, structured settlement payments from personal injury, workers' compensation, or wrongful death cases are generally tax-free under IRC Section 104(a)(2). This means the interest and earnings your settlement generates inside the annuity are not subject to federal or state income tax. However, punitive damages and interest on delayed payments may be taxable. Always consult a tax professional for your specific situation.

A period certain guarantees that payments will continue for a minimum number of years even if the annuitant (the person receiving payments) passes away early. For example, a "Life with 10-year period certain" means payments last for life, but if the annuitant dies after 3 years, payments continue to their beneficiary for the remaining 7 years. Common period certain durations are 5, 10, 15, and 20 years.

Discount rates for structured settlement annuities are set by life insurance companies and vary based on market conditions, the payment term, and the insurance company's credit rating. As of 2025-2026, typical discount rates range from 4% to 7% for standard structures. Higher rates produce larger periodic payments but may come from less creditworthy insurers. The discount rate is locked in when the annuity is purchased and does not change.

The choice between lump sum and periodic payments depends on your financial situation, investment discipline, and goals. Periodic payments provide guaranteed income, protection from overspending, and tax advantages (personal injury settlements). A lump sum offers flexibility and control but requires investment discipline. Use this calculator to compare the lump sum equivalent of your payment stream - if the lump sum offered is less than the present value, periodic payments may be financially better.

Yes, you can sell some or all of your future structured settlement payments to a third-party factoring company in exchange for a lump sum. However, this requires court approval in most states, and the factoring company will discount your payments at a high rate (often 10-18%), meaning you will receive significantly less than the present value shown in this calculator. Selling structured settlements is often discouraged due to the high discount rates and fees involved.

A fixed annuity pays the same amount each period for the entire term. A growing annuity (or increasing annuity) increases the payment amount each year by a specified growth rate - for example, 3% annual cost-of-living adjustment (COLA). Growing annuities start with lower initial payments but provide inflation protection over time. This calculator supports both fixed and growing annuity structures.

Yes, 100% free with no signup, no account, and no usage limits. Calculate as many settlement scenarios as you need, compare lump sum vs periodic payment options, and adjust discount rates and payment structures. All calculations run locally in your browser - no data is sent to any server.