Structured Settlement Present Value
Size the cash lump sum equivalent of a structured settlement by combining the monthly payment, years remaining, and a target discount rate. Adjust the payment frequency if the annuity pays more often than monthly.
Financial planning aid only—consult a licensed advisor or attorney before accepting settlement purchase offers.
Examples
- $2,750 monthly payment, 18 years remaining, 7.5% discount, monthly schedule ⇒ Present value: $276,356.93 USD • Effective annual discount: 7.76% • Total payments evaluated: 216 (12 per year).
- $1,850 payment, 12 years remaining, default discount, quarterly payments (4/year) ⇒ Present value: $149,606.13 USD • Effective annual discount: 8.00% • Total payments evaluated: 48 (4 per year).
FAQ
What discount rate should I use?
Benchmark the rate against quotes from factoring companies, prevailing bond yields, or your personal hurdle rate. Higher discount rates imply greater risk and reduce the lump sum you should accept.
How do I include annual cost-of-living adjustments?
Estimate the inflation uplift and adjust the monthly payment input upward to the average payment you expect over the payout period before recalculating present value.
Can I model a partial sale of my settlement?
Yes. Enter only the portion of the payment stream and years you intend to sell. The calculator will value that slice independently of the remainder you keep.
Does the calculator handle lump-sum balloons at the end?
Add the balloon amount divided by the number of payments to the monthly input to approximate the effect, or treat the balloon as a separate calculation discounted over the remaining years.
Additional Information
- Result unit: U.S. dollars representing the lump-sum value of the future payment stream at the chosen discount rate.
- Discount rate reflects the yield demanded by the buyer; higher rates lower the present value.
- Payment frequency converts the monthly amount to match the compounding periods automatically.