Ask Terry Questions Workers comp settlement — what to do?

Workers comp settlement — what to do?

By Terry Savage on May 30, 2018 | Chicken Money

I received a worker compensation settlement. Can you explain what and where would I best put this money.

Terry Says

The first thing you need is a bit of tax advice.  Workers comp settlements are generally free from income taxes, except if you are getting Social Security disability payments.  Here’s an article that describes those issues.

Second, you need to describe your circumstances — your age, your ability to earn an income in the future, your obligations (mortgage? education for children?) etc.  All of those factors will impact the time horizon you have, and the amount of risk you should take with this windfall.

I urge you to put it ALL in the bank, earning practically nothing, until you get some trusted financial advice.  You can search for that at the website of fee-only financial advisers —  www.NAPFA.org.   There you can find a certified financial planner who does not sell products, but charges a fee for an overall financial plan.  It may take one or two sessions, but there are a lot of issues involved and you don’t want to make a mistake with this money.

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