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Settlement Present Value Calculator

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Enter your structured settlement payment details to estimate their present value - both at a fair economic rate and at rates typical of settlement-buying companies.

Structured Settlement Present Value Calculator

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Present value at your rate
$75,671.16
Total remaining payments
$120,000
At a "fair" rate (4%)
$98,770
At a typical buyer rate (14%)
$64,405
An educational estimate, not an offer. Selling structured settlement payment rights requires court approval in every US state, and a 40% federal excise tax applies to transfers made without it (IRC Sec. 5891).

The formula

PV = PMT x [(1 - (1+r)^-n) / r] PMT = your periodic payment amount r = discount rate per period (annual rate / payments per year) n = number of payments remaining
Example

$1,000/month for the next 10 years (120 payments), discounted at 10%: present value of about $75,671 - meaning $75,671 today is considered financially equivalent to that entire payment stream, at a 10% annual discount rate.

Why the "fair" rate and a buyer's rate produce such different numbers

The discount rate is doing all the work in this formula, and it's exactly what a company offering to buy your payments controls. A rate that reflects genuinely current market interest rates and reasonable risk - roughly 3-5% - produces a present value close to the real economic worth of your payment stream. But companies that buy structured settlements typically apply discount rates of 9-18%, according to the National Association of Settlement Purchasers, because that rate also has to cover their profit margin, operating costs, and the court-approval process. The higher the rate a buyer applies, the less they pay you for the same stream of future payments - which is why comparing offers, and understanding what rate is implied by any offer, matters enormously.

Common mistakes

Comparing the total face value of your remaining payments (simply adding them up) to a cash offer, instead of comparing present values - the total face value will always look much larger than any reasonable present-value offer, which can make a fair offer look worse than it is, or a poor offer look better.
Accepting the first offer without comparing at least two or three quotes - discount rates vary meaningfully between buyers, and the difference between a 9% and an 18% rate on a long payment stream can mean tens of thousands of dollars.

Frequently asked questions

Do I need court approval to sell structured settlement payments?

Yes - every US state requires a judge to review and approve the sale, confirming it's in your best interest, before the transfer can close. This is a legal safeguard, and any buyer proposing to skip it is not operating legitimately.

What's a reasonable discount rate to expect from a buyer?

Industry sources cite a typical range of 9-18%, with the specific rate depending on the buyer's costs, the size of the transaction, and your negotiating position. Getting multiple quotes is the most reliable way to see where a specific offer falls in that range.

Can I sell only part of my structured settlement?

Yes - many people sell only a portion, such as the next several years of payments, while continuing to receive the remaining scheduled payments afterward, rather than selling every future payment.

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