I'm receiving a $160k personal injury settlement. I have the option to take the lump sum and invest it myself or take some upfront cash and keep the rest in a protected annuity account.
Lump sum plan:
$20k for debt/auto loan payoff
$15k for emergency fund
$30k savings for last three years of college
Invest the remaining $95k into vanguard index funds
Annuity plans:
Keep same 65k for reasons above
Life annuity company will keep the $95k tax free risk free---- nobody can sue me and take that money, won't be lost in divorce if that ever happens, don't pay taxes on gains, etc. But the return would only be about 3.2%, so I'd see either $134.6k when I'm 35 or $163k when I'm 40. There are other ways I could set it up, but these two seemed like the best payout options.
I'm leaning toward lump sum and investing it into vanguard index funds. I feel like even if there's a downturn in the market for a number of years, I'll still come out significantly ahead of 3.2% returns. I'm super young, so I feel like I can take the risk. I need to make a decision by end of day tomorrow, so any advice is greatly appreciated.
Submitted August 08, 2018 at 06:22PM by investhelp23 https://ift.tt/2KDNul4
