this post was submitted on 30 Dec 2024
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Why? I would assume it's the other way round.
The lump sum will grow to be worth more than the annuity over the same period if properly invested
But then how much utility can you get out of the lump sum early on with those calculations?
There has to be some break even point, if your burn rate is high enough the annuity is better.
For a smaller amount this would be a much more important question. However, 550 million dollars is such a large amount that the gain in utility up to 2 billion is questionable. You could buy a private jet and still have half a billion to invest. That half a billion nets you 25 million a year (with 5 % interest/roi) without ever shrinking.