|Posted: March 29, 2006, 12:37 am - IP Logged|
The "jackpots" for MM and PB are not comparable. MM is a traditional fixed annuity for 26 years, with all payments equal. PB, by contrast, is a graduated annuity, with lower payments in the early years and larger payments in later years. The amount of increase in payment each year is 4%, which is a fairly good estimate for average long-range inflation. So, though the payments aren't equal, they should be approximately equal in "buying power." In addition, the PB annuity is for 30 years, not 26.
Obviously, the present value (cash value) of the two types of annuities would not be equal even if the "jackpot" amount is equal, since money received sooner is more valuable than equal dollars received later. After all, you could be investing that money in the meantime.
You may want to check out the details of the two annuities here:
http://www.usamega.com/powerball-jackpot.htm (You'll need to click on "annuity payment schedule" under your state to see the graduated payments).