A personal injury victim should invest their settlement with extreme care, focusing on safety, income stability, and long-term sustainability—not quick growth. Since this money may need to last a lifetime (especially if the victim can’t return to work), the investment approach should be conservative, strategic, and tailored to their medical and living needs.

Here’s a breakdown of how a personal injury victim might invest their settlement:

1. Build a Safety Net First Before investing:

• Pay off high-interest debt
• Set aside 6–12 months of expenses in a high-yield savings or money market account
• Ensure you have adequate health, disability, and long-term care insurance

2. Work With a Fiduciary Financial Planner

Look for a financial advisor with experience in:

• Personal injury settlements
• Special needs trusts or structured settlements (if applicable)
• Government benefit coordination

They can help:

• Develop a sustainable budget
• Create a low-risk investment strategy
• Avoid mistakes like overexposure to risk or loss of government aid

3. Consider a Structured Settlement

Instead of receiving all funds at once, part of the settlement can be paid out in tax-free installments over time. This can:

• Provide predictable, guaranteed income
• Help protect the victim from mismanaging a lump sum

4. Invest Conservatively

Since preservation of capital is key, consider:

• U.S. Treasury securities or municipal bonds
• High-grade bond funds
• Dividend-paying stocks (in moderation)
• Low-cost, diversified index funds or ETFs with low volatility

5. Use a Trust If Benefits Are at Risk

If the victim qualifies for Medicaid or Supplemental Security Income (SSI), investing through a Special Needs Trust (SNT) or Pooled Trust is essential to:

• Maintain eligibility for benefits
• Use settlement funds for qualified expenses without penalties

6. Customize Based on Time Horizon & Needs

If the victim is young and permanently disabled, their investment strategy must:

• Last decades
• Provide stable income
• Grow modestly to offset inflation

If the victim is older, a more conservative, income-focused approach may be better.

7. Revisit the Plan Regularly

Medical costs, personal goals, and legal requirements can change. The plan should be reviewed at least annually with a qualified advisor.

Bottom Line:
A personal injury settlement is not a lottery win—its financial security meant to replace lost income and cover future needs. The right investment plan protects that security and gives peace of mind.