Welcome Guest
Log In | Register )
The time is now 12:23 am
You last visited October 26, 2014, 12:21 am
All times shown are
Eastern Time (GMT-5:00)

Lump sum Vs Annuity

Topic closed. 12 replies. Last post 11 years ago by CASH Only.

Page 1 of 1
PrintE-mailLink
Avatar
New Member

United States
Member #3468
January 23, 2004
3 Posts
Offline
Posted: January 23, 2004, 10:29 pm - IP Logged

Does anybody has statistical facts about which is better? Lump sum or annuity Jackpot ?

Here is some questions!!  Suppose the Jackpot is $10 millions paid out in 25 years

Lump sum you get  5 Million- 40% taxes= 3 Millions cash and every year you will pay taxes on income from your 3 million investment Income

Annuity you will get $400000 - 40% taxes = $260000 for 25 years

Is any CPA or accountant or somebody smart with numbers can tell which will come ahed ? Lump sum or Annuity ?

Thanks


 

    hypersoniq's avatar - 8ball
    Pennsylvania
    United States
    Member #1340
    April 6, 2003
    2444 Posts
    Offline
    Posted: January 24, 2004, 6:21 am - IP Logged

    Cash value is what the jackpot is worth today... investment income can be handled with the use of municipal bonds. I would take the cash. If you choose to, you could purchase a smaller annuity, and have the luxury of shopping around for a better rate.

    Most financial advisors have stated that it would be better to take the cash.

    use the "search" link above, pros and cons have been covered here ad nauseum. ;-)

    Playing more than one ticket per game is betting against yourself.

      Thomas Covenant's avatar - money
      South Carolina
      United States
      Member #491
      July 16, 2002
      837 Posts
      Offline
      Posted: January 24, 2004, 10:54 am - IP Logged

      >>>Most financial advisors have stated that it would be better to take the cash.<<<<



      Most lottery winners (75%) go broke within 5 years after winning, So, is this really good advice?


      Okay, now I believe you can predict lottery numbers

        hypersoniq's avatar - 8ball
        Pennsylvania
        United States
        Member #1340
        April 6, 2003
        2444 Posts
        Offline
        Posted: January 25, 2004, 9:08 am - IP Logged

        I know what I would do (Cas

        Playing more than one ticket per game is betting against yourself.

          mayan27's avatar - Lottery-009.jpg
          Minnesota
          United States
          Member #2426
          October 2, 2003
          84 Posts
          Offline
          Posted: January 25, 2004, 2:17 pm - IP Logged

           

                Hey HYPERSONIQ,theres a saying "Never count the chicks before it hatch",however i know it is always good to prepare for the unexpected.To admit,i enjoyed your last statement on the topic pros and cons of annuity over cash.It don't hurt to fantasize.Have fun dreaming.

          ,

                     

            hypersoniq's avatar - 8ball
            Pennsylvania
            United States
            Member #1340
            April 6, 2003
            2444 Posts
            Offline
            Posted: January 25, 2004, 2:25 pm - IP Logged

            The way I see it, the dreaming is behind me... all sorted out in various text files and a spreadsheet... Now I can concentrate on those numbers without "jackpot distraction". There is no more "Wow, what would I do with that much money?"... I am focused on "What will the numbers be in the next draw?"... still no luck in that department...

            Playing more than one ticket per game is betting against yourself.

              Avatar
              Wisconsin
              United States
              Member #1610
              June 3, 2003
              668 Posts
              Offline
              Posted: January 25, 2004, 2:55 pm - IP Logged

              i agree, it would be very nice to have control over the funds... ie the cash option. would investing nearly all funds from the cash option equal the after tax annuity total over the same period of time without taking risks to get there? i don't know which path i'd take.

              ... the lottery never fails to surprise!
                megamillionaire's avatar - Sphere animated_small_ neg2.gif
                Queens, NY
                United States
                Member #245
                April 15, 2002
                451 Posts
                Offline
                Posted: January 25, 2004, 6:42 pm - IP Logged
                Quote: Originally posted by Thomas Covenant on January 24, 2004


                Most lottery winners (75%) go broke within 5 years after winning, So, is this really good advice?


                Thomas, where'd you get this statistic? Doesn't matter really, I'm taking the lump sum.

                Megamillionaire

                Time is a wonderful teacher, but it kills all its students.

                A man must consider what a rich realm he leaves when he becomes a conformist.

                  fja's avatar - gnome1

                  United States
                  Member #91
                  January 19, 2002
                  10156 Posts
                  Offline
                  Posted: January 26, 2004, 1:21 pm - IP Logged

                  I agree with hyper...it doesnt hurt to be prepared...you should have a file named "Open in case of lottery win"...there has been some sound advice tossed around the lp in regards to annuity, lump sum, taxes & trust....you should toss it into that file for reading when it does become a factor,,,hate to have people get all caught up in the win.... just like a dear caught in the headlights.

                  "Everybody has to believe in something...I believe I'll have another beer!"   = W.C.Fields                      

                    6of6's avatar - lightening
                    New Member
                    Alabama
                    United States
                    Member #3428
                    January 20, 2004
                    25 Posts
                    Offline
                    Posted: January 26, 2004, 4:18 pm - IP Logged

                    take the cash, get an financial advisor, plan your money and lifestyle according to the jackpot amount after taxes.you'll fair better in the long run with the cash invested rather than the payments.

                      Avatar
                      New Jersey
                      United States
                      Member #3457
                      January 22, 2004
                      248 Posts
                      Offline
                      Posted: January 26, 2004, 8:36 pm - IP Logged

                      Take the cash.

                      The annuity money is invested in Government bonds.  Although we think it can't happen here, with the enormous profligate deficits our government is running, hyper inflation is a real possibility.  The annuity money under these conditions will be almost worthless.

                      Take the money, buy Euros, Yen, New Zealand dollars, British pounds, and invest overseas in solid companies.  One the inflation kicks in (and it will - since our Government is being run on credit by a bunch of guys who act like they're on a bender in a bar:  Stay drunk and put it on the tab), bring your money back to the US and live like a God.

                        dvdiva's avatar - 8ball

                        United States
                        Member #2338
                        September 17, 2003
                        2063 Posts
                        Offline
                        Posted: January 26, 2004, 11:46 pm - IP Logged

                        considering the current tax rates and the likelihood of a vast increase in the near future i'd take the money as cash now.


                          United States
                          Member #379
                          June 5, 2002
                          11296 Posts
                          Offline
                          Posted: January 27, 2004, 8:07 am - IP Logged

                          starchild:

                          DO NOT choose annuity, regardless of your age. Take the                      lump sum, AND THEN consider using PART of your winnings to SHOP AROUND for an annuity.

                          Besides, if there (currently) is no STATE income tax, it's ANOTHER reason to take the cash-in case Washington state dventually taxes lottery winnings.