Lump Sum Payment Or Prize For Life?

This time of year is exciting for me because I’m a huge NFL football fan and they are right in the middle of the playoffs.  I would love to go to a Super Bowl one year and experience first hand all of the hype surrounding one of the most popular sporting events in the world.

If you’ve seen the commercials, Visa has just finished running a contest where the winner would receive a trip to the Super Bowl for life (too bad it was only for residents of the United States).  That would be my dream for sure!  Let’s take a closer look at the contest:

The Prize

One winner will be chosen to win tickets (for two) to the NFL Super Bowl for the lifetime of the winner.  Every year beginning in 2011, the winner will receive the following: roundtrip coach class air transportation for the winner and one guest from the major U.S. airport nearest winner’s home to the major U.S. airport nearest the city of the applicable game, hotel accommodations (one room, double occupancy), rental car, and two tickets to the applicable Super Bowl game.  The winner will also receive a cash payment of $3,400 each year that may be used toward the payment of taxes on the trip (based on the value of the trip at the time it is awarded).

Total Approximate Retail Value of the Grand Prize is $493,678

Lump Sum Payment

As an alternate to the Trip for Life prize, Grand Prize winner has the option to select a one-time lump sum payment in the form of a cheque for $200,000, and a five day/four night (Feb 3rd-7th, 2011) trip for two to see Super Bowl XLV in Dallas, TX.

The package includes two tickets to see Super Bowl XLV in Dallas, TX, scheduled to take place on February 6, 2011, roundtrip air transportation (coach) for two from the major U.S. airport nearest winner’s home to Dallas, TX transportation to and from airport, hotel and game, hotel accommodations (one standard room, double occupancy).

Total Approximate Retail Value of the Alternate Grand Prize is $215,595

Cash For Life

There is also the popular Cash For Life Lottery, which rewards the lucky winner with an annual payment over a period of 25 years, or else with a larger lump sum payment up front.  I found a poll over at Red Flag Deals where the readers were asked to choose between $1 million every year for 25 years, or a one time cash payment of $17 million.  68% chose the lump sum payment.

To me, a lump sum payment is the most attractive option because you just never know what will happen in the future.  The Super Bowl tickets for life is an amazing prize, but I don’t want to be like the guy in the commercial who proudly says that he’s missed weddings, anniversaries, and birthdays because of his annual committment.

I would take the Cash For Life prize as a lump sum payment as well since I could buy whatever I needed right away, and then I could simply invest the rest in dividend paying stocks to make my own cash for life.

Most of us do dream of winning the lottery and enjoying the freedom to be able to spend our money on whatever we desire.  Unfortunately a small percentage of Canadians actually expect to retire from a lottery win.  Now I don’t subscribe to the Lotto Max retirement plan myself, but I have to admit that a lump sum payment of $1,000,000 or more sounds like financial freedom to me.

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  1. Sustainable PF on January 12, 2011 at 7:01 am

    Lump sum!
    Remember, that $1mil per year is devalued yearly due to inflation.
    As for the tickets, i’d still do lump sum, for the reasons you mentioned.

  2. My Own Advisor on January 12, 2011 at 7:25 pm

    Lump sum baby!

  3. addicted2dividends on January 12, 2011 at 9:41 pm

    I’d take the lump sum and would gladly call in rich the next day.

  4. youngandthrifty on January 13, 2011 at 1:17 am

    Lotto Max retirement plan LOL… 🙂

    I think I was pro “cash for life” before, but now as I think about it more and more- it will be lump sum payment. Then I can pay off my mortgage, haha!

  5. Susan on January 14, 2011 at 9:00 am

    In Canada lump sum for sure but I would make sure I have a GREAT financial planner. If I lived in the US I might do cash for life because they have to pay tax on their winnings. One of the only times we get better tax treatment!

    • Echo on January 14, 2011 at 10:03 am

      Hi Susan, it’s true that we have favourable tax treatment when it comes to lotteries. I agree that you should have a plan or else those winnings could quickly disappear.

  6. James Whitaker on January 25, 2011 at 10:36 am


  7. Ben on February 8, 2013 at 8:27 am

    If you can earn more than 3.2% investing the winnings, then lump sum is the way to go! Plus way more fun to have all that cash at once

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