$185 MILLION: Huge Powerball lottery jackpot set for Wednesday

Does anyone doubt that the reason the states offers annuities is because they profit from them???

I doubt it, but then I kind of know the truth.  Players can choose between cash or annuity.  The cash is all of the money that the lottery has (a percentage of sales).  The annuity is what the lottery can pay out if most of the cash is invested over time (the first payment is in cash).  The lottery can invest the money BEFORE taxes - unlike the winner who pays tax and then invests the rest.  Plus, the winner actually gets a contract from all of the states that guarantees payment of yearly payments.  The lottery keeps no part of the cash or earnings on the cash.  Either way, the winner gets it all.

Now, is it wise to take the annuity?  Not so much in the current environment.  The lottery locks in the annuiity based on current interest rates - which are very low right now.  Also, the federal income tax rate is at historic lows.  For reasonable folks with some self-control and a little financial know-how, it may be best to take the cash, pay the taxes at the current low rates (they are only likely to go up), and lock up the money in a box until interest rates rise (and they can't get much lower). 

If a person is concerned about spending the money foolishly or investing the money and losing it all, then the annuity can offer a 100% guarantee that the annuity stream will continue  for decades to come.  The annuity lets you go crazy and live foolishly and still know that you will be rich again next year.

LG:

think Big Bird will win PB on November 21$$

WE think you are all right!!!  ha,a,a!!!   stay positive!!

Always jrosina!!! 

Good luck Wednesday.   

We Know>>>LOL... Happy to be home!!

It depends on what you mean by profiting from the annuity. The state makes no extra money if a winner chooses the annuity. On the contrary, they actually incur a modest cost for wrtting and delivering the annual payments.

OTOH, they certainly make more money as a  result of advertising the inflated and imaginary value of the annuity prize. While many of us know what the cash value is, or even choose whether or not to play based on the after-tax net, many (probably most) players decide based only on the advertised amount. They don't play at $100 or $200 million because of the steep odds, but decide at $250 or $300 million that it's worth spending the money based on the idea that they might actually win the advertised amount.