this post was submitted on 11 May 2025
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Would you rather have 2 million dollars now or 100k a year for the rest of your life? All tax free (lazysoci.al)
submitted 2 weeks ago by CheeseToastie@lazysoci.al to c/ask@lemm.ee
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[–] Wazowski@lemmy.world 4 points 2 weeks ago

There’s a well established mathematical answer to this and I would post it if I wasn’t lounging in bed. It comes down to the “discount rate” of the annuity ($100K for life) and the length of the annuity (so you’d have to consider your personal health and consult actuarial tables or whatever to estimate your anticipated lifespan). You just compare the discounted future cash flows of the annuity to $2M.

Fixed income mathematics is pretty cool, IMO.