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$400 MILLION: Powerball jackpot skyrockets

Topic closed. 259 replies. Last post 3 years ago by mypiemaster.

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Florida
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February 12, 2012
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Posted: August 4, 2013, 11:32 pm - IP Logged

Given that the cash values of these current jackpots are lower than previous years does taking the annuity payments become more attractive. I know most people always take the cash option but it seems as if the cash option is getting lower and lower with respect to the current jackpot(annuity) to cash ratio. .........

No. Regardless of what the cash value percentage is, the annuity option always poses fundamental problems if you were to take it: You're betting on the fact that you'll live out those 26 (MM) or 30 (PB) years that the MUSL pays out to you and if interest rates will be in your favor at the end of the last payment. 

It's not a matter of you not receiving your entire winnings if you die; the MUSL will pay it out to your estate as RJoh mentions, but it won't be in a one time lump sum as they'll continue to pay by their schedule the ones inheriting your estate. The problem is your heirs will be paying the tax at the end of the year on the entire amount of your proposed jackpot winnings and will most likely not have enough to pay it until the money rolls in. Not a pleasant burden to leave on your heirs, but if you're dead, you may not care. 

Then there is the matter of interest rates and inflation. The lottery uses the US Treasury bonds and notes to fund for the annuity jackpot amount which you would be subjected to for 26/30 years. That means that you'd waste time into making a profit because there are stocks, even AAA rated stocks, that have higher interest rates right now and are on the same level of safety as the US Treasury. Regardless of where your stance is on this, though, the bottom line is: You'd be trusting the MUSL to grow your money for you when you could be doing a better job yourself or, if you don't want to worry about it, you could hire a more personalized team of financial advisors to do the work for you. Either way, you'll probably have more money in the end once those annuities expire than the person who chose the annuity. You are also risking losing money if the US Treasury has rates below the rate of inflation. This, like the above, may not be a concern for you though, because you'll probably live way below your means with a jackpot this size.

What will concern you though is that, well, just because you receive the annuity payments doesn't mean your financial situation will get any better than if you were to receive the cash option. Some people are leery about receiving such a huge winfall because they are afraid of blowing through it and think the annuity option will help them exercise control, but that is dependent on the person in the end. Those who don't have self control will burn through it by using credit and making large purchases beforehand, sitting on the cushion that their annuity paycheck will come the following year. And really, that's no better than what most Americans go through everyday, and why play the lottery if you just want to repeat the life you already live?The only time living on an annuity might be worth anything is if the jackpot size makes annuity payments lower than the highest income bracket (39.6%), like if it was a 2 million jackpot. You may have some savings there, but even then, you are risking all of the above. 

Honestly, I'd get the cash option, invest it myself, and live off the interest. That's just me; I'd want to watch it grow and establish permanent wealth for generations. Now, even if you didn't want to do any financial planning and wanted to blow it all, might as well go for the huge sum of money now than using credit to bank on it later. The take home message here is: Cash is flexible as you are, while annuities are not. You decide how to spend your money rather than another organization bottlenecking you.

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    Posted: August 4, 2013, 11:40 pm - IP Logged

    Anybody know what the winning numbers are going to be?

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      Florida
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      Posted: August 4, 2013, 11:45 pm - IP Logged

      Given that the cash values of these current jackpots are lower than previous years does taking the annuity payments become more attractive. I know most people always take the cash option but it seems as if the cash option is getting lower and lower with respect to the current jackpot(annuity) to cash ratio. .........

      I don't mean to double post, especially with the same quote, but I didn't want to make the above wall of text any longer than it was, lol! Sorry guys, usually, I'm lurking in the shadows, but love reading this website.Embarassed

      The reason why the cash values are lower right now has to do with the fact that the pooled cash for both PB and MM are relying on the US Treasuries, and for the passed some months to almost a year, the interest rate on those have steadily increased. For awhile, when interest rates were insidiously low, MM and PB were touting almost 74 and 64 percents respectively. 

      On one hand, you get less cash now with the higher interest rates than those who played before, but the value and buying power of those dollars will be worth more if you invest wisely the next time interest rates take a nose dive. You sell then, and it's ka-ching! Big Grin It's all relative and it's up to the person to make the most of it.

        realtorjim's avatar - images q=tbn:ANd9GcT7U3t20NgScoPlxOqLT6TR0vQeJNBV3_tTswe1XeFDTsdw3NLZ

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        Posted: August 4, 2013, 11:50 pm - IP Logged

        Anybody know what the winning numbers are going to be?

        Yes, they are the numbers that will appear on my winning Powerball ticket.  They will  be revealed on Wednesday night at approximately 11 PM so stay tuned.  The jackpot will also jump another 10 or 12 mil between now and then. 

        Poke

        No offense intended, just a few chuckles.

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          Posted: August 4, 2013, 11:53 pm - IP Logged

          Yes, they are the numbers that will appear on my winning Powerball ticket.  They will  be revealed on Wednesday night at approximately 11 PM so stay tuned.  The jackpot will also jump another 10 or 12 mil between now and then. 

          Poke

          No offense intended, just a few chuckles.

          Since you are going to win> tell me what your numbers are so we can both winLOL

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            Florida
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            Posted: August 5, 2013, 12:11 am - IP Logged

            I admit, it's hilarious that the new high jackpot mark is now roughly two times the amount of what it used to be, in what, like, less than two years? LOL Curious to see how far this one will go. Wishing for a single winner and good luck to those playing! I think I'll finally shell out two bucks to play for this draw, since three is all I have to my name at the moment, lol. Although, the Florida Lotto is calling my name right now at 47 million. I think those in Ohio are understanding my conflict right now, ha ha. At least there is time until Wednesday. 

             

            So, in the mean time, I say, let the good times roll! Cool

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              Posted: August 5, 2013, 12:13 am - IP Logged

              If you show me your Fortune Cookie I'll show you mine

                realtorjim's avatar - images q=tbn:ANd9GcT7U3t20NgScoPlxOqLT6TR0vQeJNBV3_tTswe1XeFDTsdw3NLZ

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                Posted: August 5, 2013, 12:16 am - IP Logged

                Since you are going to win> tell me what your numbers are so we can both winLOL

                Fair enough, I'm not a hog, just a pig.  The numbers are:

                 

                 œ ω Õ ñ ð PB Π. 

                 

                Dang computer not printing numbers correctly again... let me work on this thing.

                 

                Type

                  realtorjim's avatar - images q=tbn:ANd9GcT7U3t20NgScoPlxOqLT6TR0vQeJNBV3_tTswe1XeFDTsdw3NLZ

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                  Posted: August 5, 2013, 12:20 am - IP Logged

                  If you show me your Fortune Cookie I'll show you mine

                  Dammit, I already ate it!

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                    Posted: August 5, 2013, 12:21 am - IP Logged

                    What's the Exchange Rate for the BangKok Lotto?

                      realtorjim's avatar - images q=tbn:ANd9GcT7U3t20NgScoPlxOqLT6TR0vQeJNBV3_tTswe1XeFDTsdw3NLZ

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                      Posted: August 5, 2013, 12:24 am - IP Logged

                      What's the Exchange Rate for the BangKok Lotto?

                      for $400,000,000 US it would be Thailand $12,534,744,000 THB

                      And warning for those who may try to check the Bangkok lotto... A certain link contains a virus that tries to download.

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                        Posted: August 5, 2013, 12:25 am - IP Logged

                        Dammit, I already ate it!

                        Mine Says:

                        We Tu Lo

                        Sum Ting Wong

                        Ho Le Fuk

                        Bang Ching Ow>>>

                        ^^^^^^^^^^^^^^^

                        It's your turn Now!!

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                          New Member

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                          Posted: August 5, 2013, 12:32 am - IP Logged

                          Woman Who fly upside down in Airplane=?

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                            Inland Empire
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                            October 22, 2011
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                            Posted: August 5, 2013, 2:19 am - IP Logged

                            Mine Says:

                            We Tu Lo

                            Sum Ting Wong

                            Ho Le Fuk

                            Bang Ching Ow>>>

                            ^^^^^^^^^^^^^^^

                            It's your turn Now!!

                             Good to be in Texas, sucks to work for a TV station near San Francisco. Big Smile

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                              Inland Empire
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                              October 22, 2011
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                              Posted: August 5, 2013, 2:21 am - IP Logged

                               Ah...I've been thinking. What would I do if I win?

                               Well, this will raise some eyebrows. But here it goes. I don't wanna buy a new car.

                                 
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