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Lotterule
(lemmy.world)
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this post was submitted on 30 Dec 2024
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He'd get 14 million dollars a year for 30 years assuming the total payout was the same. I get that advice for people who are looking at a 100k payout. But at some point it's just irrelevant. His first year alone would be a respectable total payout.
Yeah but he would get 47 million in interest a year if he took the lump and spread it across the market using the 10 year average. 11%
So using your 14 million number, he could invest half and leave the rest in something guaranteed like bonds or savings accounts and make more money and guarantee his family has it in the future.
It's enough money to buy everyone in your family a multi million dollar house the first year and not have touched the original balance.. : /
Arguably he could borrow against his annuity and save on taxes with loans. He could also setup a charity in which he donates a max amount and set up family on the board avoiding other taxes and making write offs as if he is ceo he can buy company property stuff that he can write off too.
Then he could, just grabbing an example out of the air, pay a painter to paint a portrait of himself, get that painting evaluated and valued for several million dollars, and then donate it to the charity and write off the value. Not that anyone would do that mind you.
I wouldn't use the most aggressive numbers on that, I'd plan for 5 percent. Which is 20 million but then you also have capital gains tax. After which you'll have 15 million a year instead of 14 million a year. The annuity also generally comes with a larger total payout though. So in reality it'll be higher than 14 million.
So yes you can get lucky in the stock market to beat an annuity, but that's not the reason people get told to take the lump sum. Most lottery payouts are 100k or less and 10k a year isn't going to do much, while 100k starts a retirement fund. Once you're high enough that the annuity itself is "quit your job money" it flips. Then if you screw up you know you're getting back on your feet next January.
Those aren't the aggressive numbers though, that was the market average. So hoping for 5% is a little low but I understand it is always good to be skeptical. Any way we look at it though, it's fuck you amounts of money haha. When someone says what's your budget this month and their answer is "I mean I don't really want to spend over a million..". You know that guy really doesn't need to check the price of eggs that week.