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A More Flexible Retirement Solution

A More Flexible Retirement Solution
Sage Settlement Consulting

Most retirement plans leave high earners confused when it comes to tax planning and contribution limits. As a contingency fee attorney, you have an opportunity that is not available to most taxpayers. Attorney fee deferrals are a flexible, tax-advantaged solution for substantially increasing your existing retirement portfolio.

Deferred Income Tax Liability

If you take your contingency fees up front in cash, then you’ll be liable for income taxes on the entire lump sum. A banner year could bump you up to a higher tax bracket.

Attorney fee structures provide periodic payments, thus spreading out your fees and corresponding tax liability over time. Structured attorney fees grow tax-deferred, with a 1099-MISC issued only for funds received within a given year.

Some attorneys may find themselves in a lower income bracket upon retirement, while others may choose to retire in states with no income tax, like Florida, Texas, Nevada, Tennessee, Alaska, South Dakota, Washington, and Wyoming. The proactive planning nature of attorney fee structures keeps more fees in your pocket, regardless of your retirement plans. Even better, they offer a simpler solution for deferring compensation than setting up a 401(k) or a defined benefit plan.

Distributions on Your Schedule

Unlike IRAs and 401(k)s, attorney fee deferrals do not have a required minimum distribution, nor do they have an age restriction for when you begin receiving payments. Instead, you have the power to design a payment schedule that works best for your circumstances. You may receive monthly, quarterly, semi-annual, or annual distributions, or even a series of future lump sums.

Unlimited Savings Potential While Stabilizing the Firm’s Income

One of the greatest financial hurdles contingency fee attorneys face is unpredictable income. Case volume ebbs and flows, and with that, so do anticipated contingency fees. Furthermore, retirement fund contribution limits could diminish potential profits from a particularly lucrative year. Attorney fee deferrals are a game-changer—with no contribution limit, you are free to defer as much of your fees as you want and create guaranteed income to cover your firm’s overhead.

Attorney Fee Deferral Options

You have several options for structuring your fees, including structured settlement annuities, market-based structured settlements, and U.S. Treasury Bonds:

  • Structured settlement annuities offer a guaranteed1 rate of return and no overhead fees, allowing them to remain competitive with traditional bank investments. Backed by highly-rated life insurance companies, fixed annuities are a secure choice for fee deferrals. Additionally, fixed index annuities can now be used within a structured settlement to provide additional upside market-based performance based upon an index like the S&P 500.
  • Market-based structured settlements provide an even greater opportunity for growth. Rather than placing the contingency fees into an annuity, the funds are directed into an investment account on a pre-tax basis. Market-based structured settlements can be managed by a professional fund manager or the attorney’s financial advisor.
  • Treasury Funded Structured Settlements™ (TFSS) utilize U.S. Treasury Bonds as the underlying investment. TFSS payments are held in a trust, with the attorney listed as the trustee. The bonds are backed by the full faith and credit of the U.S. government, making them a safe, reliable addition to an attorney’s retirement portfolio.

Contact Sage Settlement Consulting for Attorney Contingency Fee Deferrals

Sage Settlement Consulting provides the most innovative attorney fee deferral solutions. Contact us today to create a flexible, tax-advantaged plan for your contingency fees.

1Guarantees are subject to the claims-paying abilities of the issuing insurance company.

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