Originally Posted by
DMF13
She's asking for $5M, but any settlement will be smaller (probably much smaller) than that, unless the city thinks a jury would actually award more than $5M at trial.
Add to that, awards for damages based on lost wages are taxable in CA, and for federal taxes, although damage awards for medical/physical injury are not. So depending on how the claim, and any settlement, or trial award, are structured, she could owe a huge tax bill.
Also, someone who retires in their late 50s or early sixties, who doesn't have a pension, might be able maintain their lifestyle by withdrawing 3-4% from their investments, if they have a low to mid 7 figure sum from which to draw. Someone in their 20s is going to need to withdraw a much smaller percentage to make those investments last for an additional three decades. Things like paying out of pocket for medical expenses, or medical insurance outside an employers group plan, also make it more expensive than being employed, and participating in a group medical plan.
All that to say, while it might be a sizeable financial windfall, she's unlikely to end up with what a friend of mine calls "FTW" money, and will probably have to generate additional income, if she wants to maintain her current lifestyle for the next 50 to 60 years.