$1M (but paid over 40 yrs)

Month long promo at a casino.
Top prize is $1M but fine print says over 40yrs.

Now $25k/yr is nothing to sneeze at and it's a lower tax rate than$1M lump sum but 40yrs???
Powerball $1M is over 29yrs but yearly payouts increases 5% every year.

Decades ago during the last millennium, McD $1M Monopoly top prize was over 25yrs (I think) and back then as a kid i thought that sucked.
And you could live off $40k/yr for a family of 4 back then.

I guess a bright side to the prize spread over 40yrs is that the casino winner won't be broke after 5yrs like the avg lump sum lottery winners.

I think we expect that $68.50 a day won't go as far as it used to... but you can probably get a coffee and a danish.

I'm more interested if the usual casino player these days will be around for another 40 years to finish collecting.

I'm waiting for the multi-year payout that adjusts for inflation

Quote: odiousgambit

I'm waiting for the multi-year payout that adjusts for inflation
link to original post

I believe most do adjust for inflation, but the grand total amount is not adjusted.

ETA... or did you mean that you are waiting to win one?! If so, I'm in the same boat, brother! ;)

actually I have little interest in big prizes with small chances of winning, even when they are said to be +EV sometimes

there are some things about me that are 'gambler personality' and others are completely missing, like this

Quote: odiousgambit

actually I have little interest in big prizes with small chances of winning, even when they are said to be +EV sometimes

there are some things about me that are 'gambler personality' and others are completely missing, like this
link to original post

I’m the same way. It’s why I rarely ever attend a casino drawing. It’s a sucker play to get the suckers to just blow money while waiting for their name to not be called. It doesn’t get called and they go on tilt losing even more money.

Quote: Slotenthusiast

Quote: odiousgambit

actually I have little interest in big prizes with small chances of winning, even when they are said to be +EV sometimes

there are some things about me that are 'gambler personality' and others are completely missing, like this
link to original post

I’m the same way. It’s why I rarely ever attend a casino drawing. It’s a sucker play to get the suckers to just blow money while waiting for their name to not be called. It doesn’t get called and they go on tilt losing even more money.
link to original post

I tend to go if I have freeplay to redeem that day.

I'd want $2,000/week. How long would that last? Not long enough for it to be irrelevant. $1 million paid off in 5 years would be more appropriate. Plus I don't even hit the 32% tax bracket until $213K/year now as a single person with a standard deduction. I suppose people could elect to take $166,666.67/year on a tablet so it pays off in 6 years so they can keep their jobs and not go up a tax bracket immediately. If they get paid a little more on the job, make it a 7 year payout or an 8 year payout at $125K/yr.

Quote: odiousgambit

actually I have little interest in big prizes with small chances of winning, even when they are said to be +EV sometimes

there are some things about me that are 'gambler personality' and others are completely missing, like this
link to original post

I will buy a couple of lotto Tix when the lump sum prize is greater than the odds of winning.
Still playing +ev, even if it's perceived.

Also, It's a social thing to talk about with friends over weekly drinks.
"Yup, finally bought a couple tickets. Will buy/do XYZ if I win. How about you, Frank?"

I buy a ticket or two every few years, but I've never given a thought to what I'd do if I won. Assuming I won, the truth is I'd have more money than I'd know what to do with it.

Annuities like this are interesting. Besides lottery and megabucks payouts, I also see them a lot in legal settlements. Borrowers try to borrower against them all the time but we can't allow them unless they "cash them in."

We see "cashing it in" all the time with the lottery option of "lump sum," but that's not available for all annuities. You can sell them if they're transferrable but the discount rate is usually prohibitive (meaning, very much higher than inflation) and not worth it unless you need the cash now.

As a rule of thumb for non-income tax states, I multiply the nominal prize by 40% for the lump sum ($1 billion prize * 40% = $400,000,000 check), and 33% for income tax states. This estimates taxes and discounting.

$25,000 a year for forty years will lose about two percent of its buying power each year. After twenty years, it will lose forty percent. Towards the end of the contract, it's not much more than a hundred dollars a week in today's buying power.
Does anyone have an idea what an annuity like that costs? I've researched some annuities but at lower values and don't know the numbers in my head.

I think I saw a slot machine in Niagara Falls that had a similar payout but it was almost 20 years ago. People on SS get taxed on income over $25K, maybe that has something to do with it, but I doubt it.
*************************************************************************
https://clearstarttax.com/are-your-social-security-benefits-taxable-in-2025/
Simple Example: How to Calculate Your Taxable Social Security
Let’s say:

Your AGI (adjusted gross income) = $20,000

Nontaxable interest = $2,000

Social Security benefits = $18,000

Step 1: Calculate Combined Income

Combined Income = AGI + Nontaxable Interest + ½ of Social Security
= $20,000 + $2,000 + $9,000 = $31,000

Step 2: Apply IRS Thresholds

For a single filer:

$25,000–$34,000 → up to 50% taxable

Over $34,000 → up to 85% taxable

Since $31,000 is between $25K and $34K, up to 50% of your benefits may be taxable.
So, $9,000 (50% of $18,000) could be included in your taxable income.
*******************************************
This $25K number has not budged since 1984. It would be close to $80K with inflation today, $75K by 2 years ago.