The article discusses the dilemma faced by pensioners and lottery winners regarding whether to take a lump sum payment or a series of smaller payments throughout life. While rules like the '6% rule' provide some guidance in these decisions, factors including life expectancy, financial needs, and personal goals are crucial to consider. The author emphasizes the importance of crunching the numbers and evaluating one's own situation before making such a significant decision, suggesting that individual circumstances greatly influence the best choice.
It's important to consider factors such as life expectancy, individual needs, and the time value of money when choosing between a cash flow stream and a lump sum.
The '6% rule' provides a guideline for assessing whether the monthly payments are preferable to a lump sum, but personal circumstances vary widely.
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