A Look at Publishers Clearing House’s “$5,000 a Week For Life” Giveaway

January 7, 2008

Publishers Clearing House is currently advertising a promotion where people can win $5,000 per week for the rest of their lives. Sounds pretty good doesn’t it? But, how good is it really?

Lets take a look at the numbers using my age (38) as the basis for the calculations. If I’m lucky enough to live to age 100, that’s about 62 years from now (or 3,224 weeks). If I were to win PCH’s prize, I would receive $16,120,000 in income over my lifetime:

3,224 weeks × $5,000 per week = $16,120,000

WOW! The only problem is, I left out two VERY IMPORTANT details:

1. Taxes

2. Inflation

The IRS wants their share and will withhold 25% of each check. So, from day one, you’ll be receiving $3,750 per week. In addition to that, the $3,750 per week stays the same dollar amount over your lifetime. Everyone knows that a dollar today is worth more than a dollar at some point in the future due to inflation. So, that means that inflation is going to eat into each of those $3,750 checks. In ten years that $3,750 will only have the purchasing power of $2,778 in today’s dollars. Using the numbers from the example, my last check (check #3224) would only be worth $583.46 (and that’s assuming 3% inflation. If inflation runs higher than that, the money will be worth even less).

Of course, there are ways around some of this. For instance, let’s say you are able to save 10% each week ($375 per week) for 42 years. During this time, you invest your weekly saving in an S&P 500 Index fund (like the Vanguard S&P 500 Index). Assuming a straight-line 8% return (.15% per week), at the end of 42 years, you would have an additional $6.77 million, which would be worth approximately $2.8 million after inflation.

So, it would definitely be to your advantage to save some of your winnings.

It’s fun to dream about winning the lottery but the winnings are never as good as they make them out to be.

61 responses to A Look at Publishers Clearing House’s “$5,000 a Week For Life” Giveaway

  1. Do you know anyone who has won

  2. IM NOT THat lucky to win something as nice as that

  3. Who couldn't use $5,000 a week right now. Maybe we could go to Paris and have a date night for $30,000.00.

  4. jeffrey browman June 7, 2009 at 5:19 pm

    I have tried to win for over two years and there has still been no luck for me.I am really in a big financial situation right now and i hope one day soon i stumble up on that 5,000 a week for life.

  5. Douglas Childs June 7, 2009 at 7:27 pm

    still don't understand what to search for!!!!!!!!

  6. Fredric Graham June 12, 2009 at 12:17 pm

    Worked 37 years in a mill and they closed the doors. I am 55 years old and like alot of other people in this world I am lost! This money will realy help my family.

  7. eugene butler June 14, 2009 at 5:39 pm

    thankyou for giving me a chance

  8. I could help my family out, and get nice things for my grandchildren.
    Marie Grant

  9. James Westbrook June 25, 2009 at 7:37 pm

    I have entered these sweeps sencs 1989 and haven't won a thing, I think its about time that I won something.

  10. Regardless of how much money received each week, every "little" bit would help. At age 75, it would be nice to enjoy life without worrying about making ends meet.

  11. JOHN L. HARMS July 6, 2009 at 3:33 am

    i have been with PCH a number of years, and have enjoyed the items I have purchased, and now I would enjoy winning the sweepstakes. I would like to give to our church, and to the BIBLE CAMP, JOHN L. HARMS