Jeff, in answer to your question, our lottery player could have $470,685.32 if he invested it in a tax-deferred account. In a regular, taxable account, he’d get $315,738.02 (with 25% marginal tax rate, 6% state tax). That’s assuming a 9% projected rate of return – a classic portfolio with 60% in stocks and 40% in bonds gained an average of 9% over the past 75 years. If our lottery player simply invested it in the bank, it would surely be a lot less. None of these numbers are inflation-adjusted. Maybe someone else can do that part.
Hope that helps!
