If you take the lump sum, hire a group of financial investors/analysts, you could very easily invest that sum into a portfolio that could net you 7% a year. if the lump sum is $650m after tax, thats $45.50 million a year you would be earning on top of the lump sum. You could live the rest of your life making 45million a year without touching your money.
$650m divided 29 years is only $22.4 mil/yr. Why would you take the payments?
It is 1.4B over 29 years. You only get taxed once if you take the lump sum. So it's $1.4B - (lump sum deduction) x 39.6% = take home total.
If you take the $1.4B over 29 years, you would be taxed at 39.6% (current highest tax bracket) of $48,275,862.07 ($51M if the jackpot is $1.5B) annually. The annual tax bill is $19,117,241.38, leaving you with $29,158,620.69. So, for 30 years you will receive close to what Clayton Kershaw earns before taxes. After taxes, over 29 years that equates to $845,600,000.01.
If you take the lump sum of $1.4B, you will get an estimated $868,000,000,000,000.00 before taxes, after taxes (39.6%) $524,272,000,000,000.00. Half a B sounds pretty nice and I wouldn't complain.
But once again, I'm no financial expert, so I'll take the annuity to annoy the shit out of everyone.
"Yeah, well, you know, that's just, like, your opinion, man." - The Dude
"If you can't hear it before you see it, what's the point?" - Jesse James