If you have received money in a personal injury settlement and are unsure how to go about saving it, there are a few things you must know before you make any big decisions. Being aware of the tax consequences is a big step in the right direction. Many individuals do not realize that taxes are also taken out of personal injury settlements, so educating yourself about them is very important. Hiring a personal injury lawyer or using the one that won you the settlement is recommended. They can how explain the amount of tax to expect on your settlement.
Creating a Plan
Before you make any huge decisions, you need to make sure that you have or create a concrete plan for your money. You must ask yourself what you would like to do with your settlement money. Would you like to buy a bigger house or to fund your retirement, or would you like to donate to charity and ensure that your children have money for their college tuitions put away? By creating a plan, you can be certain that you will not stray too much from what is important to you. Hiring a professional can help you avoid making mistakes like investing too much money when you are trying to save towards a bigger goal. Taking out a life insurance policy on yourself is something else to keep in mind. This can help not only you but your family as well in case something happens to you. The rule of thumb here is to get life insurance while you are healthy so that you do not have to worry about it if your health ever changes. Another thing to consider is paying your debt or mortgage off. It is only human to forgets about your debt when you suddenly come into a large amount of money. While creating your plan, you should remember to include your debt or mortgage. This will make things a lot easier down the road. If it is possible for you to keep working, think over the idea of keeping your job. A regular paycheck can go a very long way when added to your settlement income. Also, if you stop working you will lose a contribution for Social Security benefits.
Contact an Attorney
Get in touch with an experienced attorney such as the personal injury lawyer Phoenix AZ locals trust. Having a solid plan created before contacting one is a good way to keep yourself accountable and shows that you are taking steps to become wiser with your money.
Thanks to authors at Lorona Mead for their insight into Personal Injury.