Structured Settlement Calculator

Total Amount Received is a simple nominal sum of every dollar you'll actually receive over time -- Discount Rate has no role in that calculation at all. Present Value instead discounts each future payment back to today's dollars using that rate, so a higher discount rate makes the same future payments worth less in today's terms, even though the actual dollar amounts arriving each year haven't changed.

Total Amount Received adds up the raw dollar amounts of every payment, ignoring when they arrive. Present Value instead answers 'what would this stream of future payments be worth if I received it all today,' by discounting each future payment for the time value of money. A structured settlement almost always shows a lower Present Value than Total Amount Received once any payments extend beyond the first year.

Payments from a structured settlement arising out of a qualifying personal physical injury or sickness claim are generally excluded from federal income tax under IRC §104(a)(2), which is a well-established federal rule. However, not every settlement qualifies -- punitive damages and many non-physical-injury claim types are generally taxable -- and this calculator does not model taxes at all, so confirm your specific settlement's tax treatment with a qualified tax professional.

Yes. Annual Escalation Rate compounds each year's payment above the prior year's amount, so a higher escalation rate increases every payment after the first one and raises Total Periodic Payments -- and with it, Total Amount Received. It has no effect on Upfront Payment, which is calculated only from Total Settlement Amount and Upfront Payment %.

Not necessarily. This calculator only compares dollar totals and their present value -- it doesn't account for your personal cash-flow needs, the security of guaranteed periodic income versus a lump sum you must manage yourself, inflation risk, or your own life circumstances. A lower Present Value structured option can still be the better choice for someone who needs predictable income and wants to avoid the risk of spending a lump sum too quickly.