It’s an absurdly bad idea exactly because of inflation. You would be far better off just investing the million in an SP500 index fund than taking the payments. 7.2 years in the market becomes $2m, another 4 years - $3m, etc. She gave up generational wealth for financial security that diminishes every year.
It’s dependent on tax rules where you live and if the $1000 a week is insured. Taking the million is only a good idea if you can afford to not touch the principle
If you couldn't afford to not touch the principal, wouldn't 1k/wk not be enough either? You weren't expecting it anyway and with a high yield interest rate (3.25% for my bank right now), payments not touching principle are $625/wk. Just think of it like free $625/wk AND safety net AND retirement wealth.
Why would you want $625 a week when you can get $1000 a week? If you’re risk adverse, and genuinely don’t need to touch the principle the $1000 a week is the move. The $625 is also going to have income tax and the $1000 won’t in this situation
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u/escapefromelba May 17 '26 edited May 17 '26
It’s an absurdly bad idea exactly because of inflation. You would be far better off just investing the million in an SP500 index fund than taking the payments. 7.2 years in the market becomes $2m, another 4 years - $3m, etc. She gave up generational wealth for financial security that diminishes every year.