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$185 MILLION: Huge Powerball lottery jackpot set for Wednesday

Topic closed. 66 replies. Last post 2 years ago by KY Floyd.

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United States
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September 7, 2011
20244 Posts
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Posted: November 17, 2012, 8:12 pm - IP Logged

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

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    Urbandale, IA
    United States
    Member #8624
    November 11, 2004
    115 Posts
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    Posted: November 18, 2012, 1:34 am - IP Logged

    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.

      psykomo's avatar - animal shark.jpg

      United States
      Member #4877
      May 30, 2004
      4638 Posts
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      Posted: November 18, 2012, 3:41 am - IP Logged

      I think the jackpot will continue to grow til Turkey

      then it's time to 

       &  White Bounce

      LG:

      think Big Bird will win PB on November 21$$

      TurkeyTurkeyTurkey     White Bounce       DrumJack-in-the-BoxDrum       White Bounce        TurkeyTurkeyTurkey       

        jrosina's avatar - k3 34.jpg
        New York,
        Panama
        Member #73078
        April 4, 2009
        3482 Posts
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        Posted: November 23, 2012, 9:39 am - IP Logged

        Big Grin Santa me thinks so to.......

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

        forget what "they" say about youWhat you say about you?...

        Now, does it count??

         

         

        *Jr$ina


          United States
          Member #111446
          May 25, 2011
          6323 Posts
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          Posted: November 23, 2012, 10:37 am - IP Logged

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

          Always jrosina!!!  Hyper

           

          Good luck Wednesday.   Lep

            jrosina's avatar - k3 34.jpg
            New York,
            Panama
            Member #73078
            April 4, 2009
            3482 Posts
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            Posted: November 23, 2012, 12:39 pm - IP Logged

            Always jrosina!!!  Hyper

             

            Good luck Wednesday.   Lep

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

            forget what "they" say about youWhat you say about you?...

            Now, does it count??

             

             

            *Jr$ina

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              NY
              United States
              Member #23835
              October 16, 2005
              2838 Posts
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              Posted: November 24, 2012, 2:38 am - IP Logged

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

              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.