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I don't have time to do more detailed analysis but, from the article, "In 2052, ...Rose would be approaching her 60s." So lets assume that Rose would be exactly

I don't have time to do more detailed analysis but, from the article, "In 2052, ...Rose would be approaching her 60s." So lets assume that Rose would be exactly 60 in 2052. So she was born in 1992. According to projections (http://www.census.gov/compendia/statab/2011/tables/11s0103.pdf http://www.census.gov/compendia/statab/2011/tables/11s0103.p...), a black woman who was 15 in 2007 would be expected to live to 63. So there is a significant risk that Rose would not live to the end of her payout period. But if the expected payout is >>18% of the present value of her payments (which it almost certainly is) then she got a bad deal. Someone with time could use the annual mortality probabilities (http://www.ssa.gov/oact/STATS/table4c6.html http://www.ssa.gov/oact/STATS/table4c6.html) to calculate the expected payout. I'm bad at analysis so I'd probably use a Monte Carlo simulation.

BurningFrog 11y ago
> a black woman who was 15 in 2007 would be expected to live to 63 People with lead poisoning probably live substantially shorter on average.
IkmoIkmo 11y ago
It says she's 20 and it's a 35 year period, or 55 years. That means she's born around 1995 and the life expectancy for a black female was 74 years, almost 20 years longer than the end of her payouts. I don't think the risk of death is anywhere near significant enough for her to sign away half a million dollars in payments for $60k. She barely got more than 10 cents on the dollar in nominal amounts, and still less than 20c on the dollar in present dollar terms. I'd gladly pay double what she got and I'd still make a ton of money all things considered. The number you were quoting (63) by the way is 'years of life remaining', not life expectancy as in 'age of death'. For example for a 100 year old the number is 2 years, which doesn't mean she'll live to 2 years old, obviously :)

BurningFrog 11y ago

> a black woman who was 15 in 2007 would be expected to live to 63 People with lead poisoning probably live substantially shorter on average.

IkmoIkmo 11y ago

It says she's 20 and it's a 35 year period, or 55 years. That means she's born around 1995 and the life expectancy for a black female was 74 years, almost 20 years longer than the end of her payouts. I don't think the risk of death is anywhere near significant enough for her to sign away half a million dollars in payments for $60k. She barely got more than 10 cents on the dollar in nominal amounts, and still less than 20c on the dollar in present dollar terms. I'd gladly pay double what she got and I'd still make a ton of money all things considered. The number you were quoting (63) by the way is 'years of life remaining', not life expectancy as in 'age of death'. For example for a 100 year old the number is 2 years, which doesn't mean she'll live to 2 years old, obviously :)