Option for annuity vs. lump sum on lesser prizes?Prev TopicNext Topic

• beret32

  

  United States
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  November 23, 2017
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  Sep 28, 2018, 8:33 pm

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  In response to Tucker Black

  Quote: Originally posted by Tucker Black on Sep 28, 2018

  But the $10.95 million over 30 years is not the same as $10.95 million today. It's worth about 60% of that, or 6.6 million. The breakeven point is probably about 35 years when you consider mortality and interest.

  So I would say that if you are over age 50, or over age 40 and in not so good health, or at any age and in bad health, take the lump sum.

  Thanks. :)
• Murgatroyd

  

  Arizona
  United States
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  March 24, 2015
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  Oct 25, 2018, 2:55 pm

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  In response to beret32

  Quote: Originally posted by beret32 on Sep 28, 2018

  What is the opinion on the Cash4Life top prize, for example? It is $365,000 yearly or $7 million lump sum. But if a person manages to live 30 more years, that's a total $10.95 million payout. I suppose it might depend on how young the person is.

  I ran the numbers on this a few years back. Assuming a good investment strategy for both options, the continued income from the lifetime payments pulls ahead of the early-start advantage of the lump sum after about 30 years.