A man aged 90 bet $200 that he'd live to 100, then did and won $50k. What if I bet $100k (my entire net worth) that I'd live to 59 1/2 rather than put money in my 401k...? You think I'd get good odds? I need 10-to-1 or better.
I am hoping your joking, but regardless you would never get 10 to 1 odds from anybody that can do math. That implies that to break even the house would require that only 9% of the population to live to age
59.5 Suppose 11 people make that bet: 10 die, and 1 makes it (9% survival rate). The house has paid out $1M and taken in $1M (10x $100k). Far more than 9% of the population will make it to 59.5.If 50% of the US population reaches their mid-80s (a fact) then I'm speculating that 75% or so reach 59 1/2. The breakeven odds on those assumptions is a 1-to-3 payoff ($33k return on a $100k bet).
By the by, the old guy got screwed. $50k on $200k is a 1-to-4 payout. Even if only 1 out of 5 bettors aged 90 died before 100, they house would break even. However, only 50% of them will statistically live to age 94 (I wonder if they gave him a medical exam beforehand?). If enough people made that bet to allow the law of large numbers to play out, the house would make a killing.
Oops. The OP said $200, not $200k. That does make it a pretty good return on investment: 50000/200 = 25,000%.
Dave
Oh yeah, my bad. That is a pretty good bet (250-to-1)!
I would bet 10 to 1 that the guy who took your bet would never pay you a dime even if you did live to 59 1/2.
To give you odds, I need to know your current age.
Dave
I bet some of the guys who would make that bet with you would make SURE you didn't live to 59 1/2.
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