Structured Settlement Calculator
See what your future settlement payments are worth today — and what a company would realistically pay if you sold them. This is an estimate to help you understand the math, not an offer or financial advice.
A rough estimate, not an offer or financial advice.
This shows what a payment stream is worth today and what a buyer would realistically pay — to help you understand the math before talking to anyone. Any real offer, and any sale, must go through a court and a qualified financial or legal advisor.
Advanced: deferral & future lump sum
Many structures pay periodic income plus one or more future lump sums (for example a payout at a milestone year). Leave at 0 if none.
Present Value Today
$318,578
at a 4.5% discount rate · estimate only, not an offer
vs. $480,000 in total future payments (240 payments, spread over time)
Discount rate: 4.5%
Higher rate = lower value today. ~3–5% reflects fair value; buyers use much more. Drag to explore:
If you sell to a factoring company
$138,748 – $227,982
realistic cash range (≈18% to 9% effective rate). Typical offers land near $188,925.
You would give up about $129,654 of value selling at the typical rate — the price of cash now instead of payments later.
Selling structured-settlement payments requires court approval in every state — a judge must find the sale is in your best interest before it can close.
A 40% federal excise tax (IRC § 5891) applies to the buyer unless the transfer is approved in advance by a qualifying court order.
Present value discounts each future payment for the time you wait to receive it — the standard way to compare money over time. Factoring companies apply a much higher effective rate, which is why their cash offer is far below the total of your payments. This tool is an estimate to help you understand the trade-off; it is not an offer, a quote, or financial or legal advice, and RecordingLaw.com is not a law firm or a buyer of settlements.
How a Structured Settlement Is Valued
A structured settlement pays you over time — say $2,000 a month for 20 years — instead of one lump sum. The total of all those payments looks large, but money you receive years from now is worth less than money in your hand today. To compare them fairly, you discount each future payment back to its present value using a discount rate. The lower the rate, the closer the value sits to the undiscounted total; the higher the rate, the less those distant payments are worth now.
The calculator above adds up every scheduled payment (including any annual cost-of-living increase or future lump sum), then shows the present value at a discount rate you control. A rate of about 3–5% reflects a fair economic value. It then shows what a factoring company — a buyer of settlement payments — would realistically offer, which is much lower because they price in a far higher effective rate.
Should You Sell Your Structured Settlement?
Selling converts future payments into cash now, but at a real cost: a typical offer is well below the fair present value of what you give up. Companies advertise "cash for your settlement," and the convenience is real — but so is the discount. The figure the calculator labels "value you would give up" is the price of that convenience.
Selling can still make sense — to stop an eviction, clear high-interest debt, or cover a medical emergency — but it is rarely the cheapest source of money, and it is almost never reversible. Before signing anything, get a written quote, compare it to the present value here, and ask whether a smaller partial sale (selling only some payments) would meet your need while keeping the rest of your income stream.
Court Approval and Taxes
You cannot simply sell structured-settlement payments on your own. Every U.S. state and the District of Columbia has a Structured Settlement Protection Act that requires a judge to approve the sale first, after finding it is in your best interest (and your dependents'). The buyer files the petition; you can — and often should — have independent advice before the hearing.
Federal law backs this up. Under Internal Revenue Code § 5891, a buyer who acquires settlement payments faces a 40% federal excise tax on the discount unless the transfer is approved in advance by a qualifying court order. That tax is the main reason buyers always route a sale through the courts.
One advantage you would be giving up: structured-settlement payments from a personal physical-injury or wrongful-death case are generally income-tax-free under IRC § 104(a)(2). A lump sum you receive from selling them is a different transaction — confirm the tax treatment of any sale with a qualified advisor.
Frequently Asked Questions
How much is my structured settlement worth?
Its value today is the present value of all your future payments — the total discounted for the time you would wait to receive each one. The calculator shows this at a discount rate you choose (about 3–5% reflects fair value). The undiscounted total of the payments is always higher than the present value.
How much will I get if I sell it?
Far less than the total of your payments, and less than the fair present value. Factoring companies apply an effective discount rate commonly in the 9–18% range or higher, so a stream worth, say, $300,000 in present value might fetch a cash offer well below that. Always get the quote in writing and compare it to the present value before deciding.
Do I need court approval to sell?
Yes. All 50 states and DC require a judge to approve the sale and find it is in your best interest before it can close. The buyer files the petition; the hearing exists to protect you, so use it — bring independent financial or legal advice.
Are structured settlement payments taxable?
Payments from a personal physical-injury or wrongful-death settlement are generally income-tax-free under IRC § 104(a)(2). Selling those payments for a lump sum is a separate transaction — confirm its tax treatment with a qualified advisor.
Is this calculator an offer?
No. It is a rough estimate to help you understand present value and what selling would cost you. It is not an offer, a quote, or financial or legal advice, and RecordingLaw.com is not a law firm or a buyer of settlements.
Disclaimer
This calculator is for general informational purposes only and is not financial or legal advice, an offer, or a quote. Present-value and buyer-offer figures are rough estimates based on the numbers you enter and standard discounting assumptions; a real offer depends on the buyer, your specific annuity, and a court's approval. RecordingLaw.com is not a law firm and does not buy settlements. Consult a qualified financial advisor and attorney before selling any settlement payments.