DO you really lose money if u take the annunity over the lump sum?

Now that's the mixed up mediabrat we all know and love. You had me concerned with that rational and reasonable post about annuities.

You may not be a Marxist mediabrat, and you may not be willing to admit that our leader is one, BUT HE IS............ and he has been from his youth, so its not too hard to decipher.

It's hard to go wrong with an annuity that will pay $1 million or more for 20 to 30 years. The lottery gets to invest the cash value without paying any taxes on it. The winner who takes the cash only gets to invest the 55 to 65% they get after paying taxes. That means that to generate the same annual income the winner need to get 1.5 to 1.8 times the rate of return that the lottery gets. Of course the lottery annuity is a conservative investment because they want to make sure the investment doesn't lose value. The people who sell annuities hope to make a lot more than they pay out. They'll take a minor risk of losing money, but they're not going to offer an annuity based on the hope that a bunch of high rate high risk investments will pan out.

That means that it's not hard to find opportunities that offer the potential to yield a significantly higher rate. If you took the cash value in 2007 and invested it in Netflix you could have earned about 12% in the first year, nearly 100% the second year, and 200% the year after that. Of course you could also have taken the cash in 2010, invested in Netflix, and lost about 60% over the following year. That's the problem with all those plans the optimists have to take the cash and invest at a rate that's so much higher than what the lottery annuity offers. One is guaranteed, and the other isn't.Especially with the low rates that today's annuities are locked into there are a lot of advantages to taking the cash, but it depends on what your own needs and wants are.  Especially if you're not likely to outlive the annuity payments there's a lot to be said for avoiding the hassles of managing a big investment, and just cashing the checks as they come in. It's also a bit harder to spend your principal when you're not in direct control, though it will certainly be easy to borrow against it. Whichever way you go, it's your future decisions that will matter the most.

First I need to know what an "annunity" is.

Is that like a convent?

First I need to know what an "annunity" is.

Is that like a convent?

Informative post, thank you.  It confirms my thoughts about the annuity option, that it's not the fool's choice so many here would have you believe (and that the cash option isn't the stone-cold lock it's portrayed as).

This is not to say, though, that one should never take the cash or never take the annuity.  What I've been saying all along is that everyone has different wants and needs, so what would be a good decision for one person might be a bad decision for another.  For some people it makes sense to choose the lump sum, and for other people it makes sense to choose the annual payments.  Don't let anybody bully you into doing what you don't want to do.

Ignore and avoid is a common tactic of the left wing government propaganda news networks.

No surprise that you enjoy using it as well mediabrat.

 i would guess the real diff is there is little chance you will lose your money with an anuity.   but if you  manage your money privatly there is.

the possibility to make over double the amount from interest  on a cash payment is very real, and thats why most would go for it.

either way i would be a happy man,. and there are countless records of people going bankrupt even when winning the annuity and   collecting that. because they cannot say no. and  have no financial self control.

annuity is either fed treasurries or  muni bonds. and yeah the world will end when they stop paying.  of course USD buying as much as it used to is a different story. and purchaseing power of your millions maybe worth less, in the future . but thats something we all face rich or poor.

Just because you have no life and spend every waking moment here doesn't mean I'm required to do the same thing.  If you don't like the fact that I'm not johnny-on-the-spot responding to your every inane thought, TOUGH.  I have better things to do than to chase lunatics all over the place.

Here's the deal.......... you don't need the STATE to buy an annuity for you.........

You can buy THE VERY SAME ANNUITY on your own without the STATE.

Or you can but a better paying annuity, or use a savings account and get 1%.

Once you hand your wealth over to the STATE is absolutely perminate.

You lose ALL ability to chose and "cash now" will be waiting for your call.