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Annuity/record jackpot

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CASH Only

For the past several years, whenever the record for largest US jackpot win has been set, including last month, the winner(s) chose cash. Will a future record-breaker ever make the wrong choice?

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Chewie

There is no wrong choice.  Money is money.  At some point, you can't spend one amount faster then the other.  It is still money.  I prefer cash, but annuity is not "wong".  The better mouse trap has yet to be invented, and the better use for the annuity is still out there.

bellyache's avatar - 64x64a9wg
bellyache

I perfer to take the cash option. But if someone wants to take annuity that's fine too. It may work out best for that person. Maybe that person doesn't have very good control of money. The cash option isn't for everyone. It's good to look at things from both sides Cash.

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lchoro

I saw in the papers that there's only been 2 winners of the Powerball that have chosen the annuity payout over the past three years.  It doesn't seem to be a topic worth beating into the ground.  There's clearly no distinct advantage for most people to choose the annuity when the prizes getinto the realm of the Powerball and Mega Millions payouts.

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ryanm

I perfer to take the cash option. But if someone wants to take annuity that's fine too. It may work out best for that person. Maybe that person doesn't have very good control of money. The cash option isn't for everyone. It's good to look at things from both sides Cash.

  If one doesn't have very good control of money, annuity will not help, because the winner could screw it up by borrowing against the future annuity payments.

DirtyWrat's avatar - dirty rat_3051bs_mor.jpg
DirtyWrat

Cash only-

I think we all know where you stand on the issue of cash or annuity. I believe you have made yourself perfectly clear many, many, times.

I can't speak for anyone else; but I, for one, am sick of it.

Please don't take this the wrong way. I'm really not trying to be mean, but your constant ranting about taking cash is getting tiresome.

I do like to come here and read what everyone posts (chewie & ripsnorter are something else!) so please refraine from re-hashing this subject again, or I will be forced to try out the block feature that Todd was so thoughtful to provide.

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Chewie

With the lottery I get all the exercise I need.  I like that.

My favorite is: "Every time I think about exerise, I lay down until the feeling goes away."

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BaristaExpress

Awe, annuity or cash, which should I choose? I for one will take the cash every time! The annuity is more suited for others who don't have the skills to manage financial matters (of any size). As I see it, it all comes down to who wishes to pay more in taxes to Uncle Sam and their state (if the ladder applies) over the years of the annuity! Taking the cash option in the long run pays less taxes (depending on how it was invested) over the same years of the annuity! But everyone is different and that's all the counts!

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lchoro

It all depends on the size of the lottery prize. If it's a 3-million dollar prize, you won't have much left after paying taxes and paying for the cost of an average home in many metropolitan areas. It would make more sense to take the annuity and take advantage of the tax deductions for the interest and the property taxes. A 30-year 3-million dollar prize equates to a $ 100,000 annual payment. Your average tax rate would drop to 12.7 percent after personal exemptions of $ 8000 each year for the family and $ 30,000 for the interest and real estate taxes. Better hire an accountant before you decide. As I've stated before, PB and MM have sufficient size lottery prizes that it makes more sense to take the cash since the tax rate on your annuity will start to approximate the tax rate on the lump sum.  Also thank god we bought our home long before this bubble.

Bradly_60's avatar - disney37
Bradly_60

When people win that size of money they get financial advisors.....and it any financial advisor told them to take the annuity you could expect that so called financial advisor to be disbared and thrown out of town.

Brad

sirbrad's avatar - Lottery-062.jpg
sirbrad

It all depends on the size of the lottery prize. If it's a 3-million dollar prize, you won't have much left after paying taxes and paying for the cost of an average home in many metropolitan areas. It would make more sense to take the annuity and take advantage of the tax deductions for the interest and the property taxes. A 30-year 3-million dollar prize equates to a $ 100,000 annual payment. Your average tax rate would drop to 12.7 percent after personal exemptions of $ 8000 each year for the family and $ 30,000 for the interest and real estate taxes. Better hire an accountant before you decide. As I've stated before, PB and MM have sufficient size lottery prizes that it makes more sense to take the cash since the tax rate on your annuity will start to approximate the tax rate on the lump sum.  Also thank god we bought our home long before this bubble.

I Agree!

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JimmySand9

The vast majority choose cash. And since so few people win huge jackpots like that, we'll only be seeing people making the "right" choice.

sirbrad's avatar - Lottery-062.jpg
sirbrad

I would be tempted to take the annuity just for record breaking purposes. LOL

Anything 5 million or less, I would most likely choose annuity. It would depend on my current situation though.

justxploring's avatar - villiarna
justxploring

I'd probably find an attorney who specializes in estate tax, trusts and other financial investments.  The title "financial advisor" is widely used by accountants, insurance agents and other consultants. This board isn't about me, so I won't get too personal, but a so-called financial planner from one of those big investment firms rolled over my 401K into tech stocks in 2000. Enough said? I went back to school at night and got my own license, although I'll probably have to work until I'm 90.   

Maybe I'm on a different plane, since I'd never want a huge mansion or a Rolls but honestly folks, what's the big deal between choosing $164M cash or more than $11M a year?  Maybe some people simply don't want to bother with investments.  Even if you ended up with "only" $6 or $7M to spend each year, you could buy a gorgeous home, a nice car, a boat, give lots of money to family and friends and still have plenty left over to help people in need. Then there'd be another 25 checks!  I spent years in retail working in upscale shoppes where customers had too much disposable income, so it would be a joy to buy a log cabin on a mountain and get away from all the materialism.  I was recently in an auto showroom in town with an Aston Martin priced at $179,000.  That's ridiculous unless someone needs to pretend he's James Bond. Maybe that's why I can't relate to all the discussions on how to invest the money to become even wealthier multi-millionaires.  That said, I'd probably still take the cash so I could move to New Zealand or simply disappear. You have more control with cash.

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Chewie

Its all about the choice.  Every one, who wins, can choose whatever they want.  They can let some one else manage the money and hope nothing goes wrong, or tax laws don't change, and live happily ever after.  Of, they choose the second option, do their own investing, and hope nothing goes wrong, or tax laws don't change, and live happily ever after. 

One obvious conclusion you missed is the longevity of money.  You want more, or should want more, so that those who carry your DNA into the 30th Century will have a comfortable life.  Not wanting to increase your wealth is like saying, "screw you future people with my DNA".

Also, bear in mind, no matter where you choose to disappear to, they have laws.  Zillions of laws you probably have no concept of.  Odds are, several are related to taking money from you and placing it in a national treasury.  You can run, but you cannot hide.  Change your status to a multi-millionaire, and you have a target on your back.  Tax people from every country talk to each other, they will get their share.

It is not the Aston Martin, or the Bently, or any other car.  It is the symbol.  I can and I did.  That is what you are saying.  Walking into a dealership and looking at a Aston Martin is the same as saying, I can't, but I wish.  Me, I don't want a car that doesn't come with a chauffer.  But thats me.  My symbols will be the two major black cards.  They say, I'm rich, I'm special, I can do whatever I want, and you can't.

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