Locked: Millionaire Life lotto... cash for life or lump sum?

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Last Updated:
Feb 11th, 2008 9:01 pm

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Poll: Cash for life or lump sum?

Total votes: 166. You have voted on this poll.

$1 mil for 25 yrs...: 42; 25%

$17 mil right now!: 111; 67%

I don't play lotto cuz I never win.: 13; 8%

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Feb 5th, 2008 5:58 pm

BuildBuyBreed [OP]: Deal Addict; Mar 6, 2006; 1213 posts; 235 upvotes

Feb 5th, 2008 5:58 pm

Millionaire Life lotto... cash for life or lump sum?

With this new lotto called Millionaire Life, you can win $1 million per year for 25 years (in annuity)... or the option of a lump sum of $17 million paid immediately.

http://www.olg.ca/lotteries/games/millionaire_life.jsp

Which would you go for?

Tough choice... but I'd go for the full $25... greed/patience prevails.

I got my $20 worth for this lotto.

61 replies

Feb 5th, 2008 6:03 pm

UrbanPoet: Deal Expert; Jan 27, 2004; 40511 posts; 4298 upvotes; T.O. Lotto Captain

Feb 5th, 2008 6:03 pm

BuildBuyBreed wrote: ↑
Feb 5th, 2008 5:58 pm
With this new lotto called Millionaire Life, you can win $1 million per year for 25 years (in annuity)... or the option of a lump sum of $17 million paid immediately.

http://www.olg.ca/lotteries/games/millionaire_life.jsp

Which would you go for?

I got my $20 worth for this lotto.

HEy i was about to do a poolfor this!

LUMP sum is definitely better considering all the interest you can earn.
lets say you blwo $5M on a bad ass house, a few sports cars, and spending money..
That leaves you with $12M to invest.
IF you get compounding interest of a modest 5% over 10 years, you will get up to $25M.

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Feb 5th, 2008 6:13 pm

najibs: Deal Expert; Dec 1, 2003; 19968 posts; 1769 upvotes; YUL

Feb 5th, 2008 6:13 pm

Lump sum. I'd take the $17m now. Who knows what your situation will be 25 years from now. I'd live well below my means. Buy a nice car and nice house, but still keep relatively low key. I'd hire someone to guide me in investing most of the money. Put some of it into a low risk but relatively high interest account, and then put a bit into higher risk/high gain stuff.

Feb 5th, 2008 6:40 pm

Mario38: Deal Addict; Dec 5, 2007; 4594 posts; 254 upvotes

Feb 5th, 2008 6:40 pm

I prefer taking the lump sum payment up front.

There is an important factor to consider when making the decision. Both the $17 million up front payment and the $1 million per year payments are completely tax free. But, if you take the $17 million with the intention of investing, then the investment gains are taxable. The tax rate is dependent upon the type of investment.

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Feb 5th, 2008 6:46 pm

Geese_Howard: Deal Addict; Apr 26, 2004; 2101 posts; 70 upvotes; GTA

Feb 5th, 2008 6:46 pm

Lump sum, cause god knows what can happen to you, lets suppose you die early I'm pretty sure you stop getting the 1 million.

Besides with 17 million upfront you can invest in GICs or high interest accounts.

Feb 5th, 2008 6:54 pm

Mario38: Deal Addict; Dec 5, 2007; 4594 posts; 254 upvotes

Feb 5th, 2008 6:54 pm

Geese_Howard wrote: ↑
Feb 5th, 2008 6:46 pm
Lump sum, cause god knows what can happen to you, lets suppose you die early I'm pretty sure you stop getting the 1 million.

If you die within the 25 year payment period, your estate gets the remaining payments.

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Feb 5th, 2008 6:55 pm

PAIZIN: Newbie; Jan 14, 2008; 44 posts; GTA

Feb 5th, 2008 6:55 pm

I agree with a a few people here. I would take the lump sum and spread a bit of it here and there. Share some with the family, get married, travel, build a nice home, buy a few cars, try and invest some for future use. Do you guys think it's greedy to want to take the lump sum? or are we playing it? are we only taking it out of fear of tomorrow? anything could really happen these days. God forbids i kick the can the day after i collect my first million. LOL it would be nice to be selfish and just splurge on a few things while you still can!

Feb 5th, 2008 6:59 pm

PAIZIN: Newbie; Jan 14, 2008; 44 posts; GTA

Feb 5th, 2008 6:59 pm

Mario38 wrote: ↑
Feb 5th, 2008 6:54 pm
If you die within the 25 year payment period, your estate gets the remaining payments.

estate? care to explain it in a few words?

Feb 5th, 2008 7:01 pm

i6s1: Deal Expert; Feb 9, 2003; 17638 posts; 2341 upvotes; Langley

Feb 5th, 2008 7:01 pm

Taking 17mil now and investing it at 8% gives you 116mil in 25 years. Taking 1mil each year and investing it at 8% gives you 74mil in 25 years. If you figure the gains are taxable at 40% (mostly taxed as interest, some as capital gains and dividends) and you realized those gains in year 25, then you'd be taxed 40mil and 20mil respectively. The lump sum is worth 76mil, the yearly payments are worth 54mil after taxes.

It would seem that it's better to take the lump sum now.

Put another way, you could invest 17mil at 8% and make 1.36 mil each year. If that income is taxable at 40%, then you make almost a million ($816 000) each year for life after taxes.

Feb 5th, 2008 7:03 pm

Stoe99: Sr. Member; Nov 13, 2005; 667 posts; 1 upvote

Feb 5th, 2008 7:03 pm

Lump Sum, take the 17 million, buy whatever you want, lets say 5 million like someone else said, and lock the rest in a high interest savings account, you can get easily 10% with you gave them $12 million

Feb 5th, 2008 7:05 pm

Geese_Howard: Deal Addict; Apr 26, 2004; 2101 posts; 70 upvotes; GTA

Feb 5th, 2008 7:05 pm

Mario38 wrote: ↑
Feb 5th, 2008 6:54 pm
If you die within the 25 year payment period, your estate gets the remaining payments.

ah thanks for clearing that up, either way, I take the 17 million up front

Feb 5th, 2008 7:06 pm

UrbanPoet: Deal Expert; Jan 27, 2004; 40511 posts; 4298 upvotes; T.O. Lotto Captain

Feb 5th, 2008 7:06 pm

PAIZIN wrote: ↑
Feb 5th, 2008 6:59 pm
estate? care to explain it in a few words?

estate is the legal entity of whoever dies that deals with delegating their assets to family members, spouse, and relatives.
This can be done according to a will or according to estate law of whatever country the people are in.

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Feb 5th, 2008 7:07 pm