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Comment by walshemj | Hacker News Reader

You are ignoring political risk eg in 15 years that state government changes the rules and sequesters the money - this actually happened in the UK to the SERP pension I lost mine for a small uplift in the state pension when they changed the rules.

You also ignoring the time value of money 100 million to day is worth more than 10 million for 10 years

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Illinois has had difficulty recently paying lottery winnings to citizens. In 2015, 3900 winning tickets had delayed payouts [0]. Risk should always be factored into financial decisions, and risk of a lottery institution going insolvent is non-zero.

[0] http://money.cnn.com/2017/06/27/news/illinois-lottery-state-...

They did pay, but yes, nothing is completely risk-free. The risk of a lottery winner losing their lump sum to mismanagement, fraud, etc. is still a lot higher than the risk of a state going belly-up, although maybe Illinois will be the one to change that.

> You also ignoring the time value of money 100 million to day is worth more than 10 million for 10 years

The "now" and "later" lottery payment options do not offer equal nominal amounts, so it doesn't make sense to just say "you're ignoring the time value of money". The regular payment pays out more nominal money because of the time value of money. You could argue that they're getting it wrong, but that's a radically different argument.

Depends on 1 how old you are and 2 your health

> You also ignoring the time value of money 100 million to day is worth more than 10 million for 10 years

The lump sum is generally pretty close to what an annuity from a reputable company would cost, so the time value of money is already factored into it. Of course, you might prefer a riskier investment for higher returns, but that is really dependent on your risk tolerance, it's not a complete no-brainer to go with the lump sum.

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