Should you take the money now or receive payments over time? Our Lump Sum Calculator compares a one-time payout against periodic payments using present value. Add your expected return and tax rates and see which option is worth more, along with the break-even return. It suits lottery winnings, pensions, settlements and annuity offers.
Lump Sum Calculator
Compare taking one lump sum now against receiving regular payments over time.
How to use:
- Enter the lump sum amount and any tax rate on it.
- Enter the payment amount, frequency and number of years.
- Enter the tax rate on payments, if any.
- Enter the annual return you expect to earn.
- Click “Compare” to see which option is worth more and the break-even return.
FAQs:
Q: What is present value?
A: It is what future payments are worth today, after accounting for the return you could earn on money received now.
Q: What is the break-even return?
A: It is the annual return at which both options are worth the same. Above it, the lump sum tends to win.
Q: Is this financial advice?
A: No. It is an estimate, so consider speaking with a qualified advisor before deciding.
