a poll about annuities and lump sum

Reply #58

JackpotWanna — Tue, 07 Nov 2006 01:30:02 GMT

I got to go with annuities if I win the big one. You know the saying, if you can't handle small money, how can you handle the big one. 26 payments will be fine for me.

Reply #57

Pick3forSC — Tue, 07 Nov 2006 00:25:06 GMT

I'm not guaranteed to even wake up tomorrow let alone a yr. later waiting for my next annuity check. No way Jos'e give me my money while i'm here let me enjoy it. Uncle Sam is going to get his no matter which option you take. With the amount of money that is spent on people trying to win, for the people who do i'd be willing to say they feel the same way. Show me the money

Reply #56

lorramil — Mon, 06 Nov 2006 23:27:45 GMT

Cash lump sum is better; you can take your own annuity or invest it. same as social security. If you take at 62, say get $1500.00 month vs. 65, that's 52,000 in hand more than waiing until 65 with an increase. Life is not written in stone; every day get more precious. Of course if you have a geat job, then not good. And who knows how long you will make around the bend. Who says you wil be around in so many years, and if it is not transferrable to a bene, tough. Show me the money.... [ More ]

Reply #55

Spoony luv — Fri, 03 Nov 2006 08:13:36 GMT

Diff/the lump sum...I think anyone who wins over 20 million dollars should take a few business courses or even get a business degree and instead of giving alot of money away to charity, start up a business and hire people in your communtity...You never hear people who win big say that they want to get a business going and do some hiring...That is what should be done with a ton of money....Put a 1/4 of it away to live off for the rest of your life and if you are well below retiring age, do societ... [ More ]

Reply #54

ryanm — Thu, 05 Oct 2006 12:01:20 GMT

I agree with Preppy. It's better to take the lump sum and purchase your own annuity. That way, you get income for life instead of for just the 26 to 30 years.

Reply #53

Preppy — Thu, 05 Oct 2006 04:47:16 GMT

I disagree. An annuity is the worse option for someone in their 30's.

What do you plan to do after the age of 60 or 64 when your annuity runs out? Most men and women live well into their 80's and 90's. So you would have at least 20 years of no annuity payments.

As a 34 year old lottery winner, did you or would you keep your real job/career and work as hard as you did before the lottery to guarantee promotions and salary increases or did you retire early and take that dream job that doesn... [ More ]

Reply #52

justxploring — Thu, 05 Oct 2006 00:10:31 GMT

TrueCritic, that's a gorgeous car. Wow. No doubt about it. But if someone gave it to me, I'd sell it to a multi-millionaire like Jay Leno who likes fancy sports cars and use the money for something a little more practical.

I'm guessing there is no insurance coverage for this car either, right? I don't know how that works, but I can't imagine getting anyone to insure this car. I might be wrong. Never had that kind of problem.

Reply #51

ryanm — Wed, 04 Oct 2006 23:47:03 GMT

Mega Millions should advertise their jackpots' cash option values as well, although a few MM state lottery websites do, such as ohiolottery.com .

Reply #50

rdc137 — Wed, 04 Oct 2006 22:03:51 GMT

Lotteries should offer both cash and annuity. Let the winner choose when they win. But, if both are offered, advertise both. Powerball does this on their website.

Reply #49

truecritic — Wed, 04 Oct 2006 19:19:30 GMT

Posted 9/29/2006 4:12 PM ET

$4M buys New York man a Ferrari built for him

By Michael Sawyer, AP

Pininfarina scanned James Glickenhaus' body to make the interior of his car fit him perfectly.

PARIS (AP) James Glickenhaus wanted his

latest car to make a profound statement.

He also wanted it to be a reflection of

himself, his passions and his desire for

classic racing in the 1960s.

The money manager who calls Rye, New

York, home got... [ More ]

Reply #48

KY Floyd — Wed, 04 Oct 2006 19:11:03 GMT

I'm guessing we haven't heard the last of the guy in Georgia. One thing we can be pretty sure of, is that the phone company didn't change his number on a Sunday. At the very least, letting your name be published as a lottery winner before changing your phonenumber is a very follish thing to do.

Reply #47

CA LotteryGuy — Wed, 04 Oct 2006 18:58:15 GMT

KY Floyd...as stated in your response, the best course of action is to get with people that have expertise in money matters, preferably those that are experienced in managing large sums of money. Then you should be able to have all your options laid out in front of you and make your decision accordingly. My feeling is that is much better to make an informed decision reviewing all of your options then say no matter the situation one should take the cash or the annuity.

Regarding your comment... [ More ]

Reply #46

justxploring — Wed, 04 Oct 2006 18:40:06 GMT

I'm certainly not saying that taking the annuity is always a bad idea, but even if it gives you a little more average annual spending power, it also limits your options. If I ever have to make that decision I'll definitely be spending agood bit of time with people with far more expertise in these matters than what I have. FWIW, that's one of the reasons I figure that the people who go running to lottery headquarters to claim their prize a couple of days after winning are more likely to have prob... [ More ]

Reply #45

KY Floyd — Wed, 04 Oct 2006 18:26:26 GMT

If you won the lottery would you spend every penny of annual income every year? I don't know about you, but I'm planning on living for more than another 26 years, so I'm expecting to need an income 27 or 30 years down the road. Using your example I could take the cash, pay the taxes, and have an annual after-tax income of over 500 grand a year. Actually, I'd be getting close to 600 grand, because I wouldn't spend the rest of my life in a state that takes 9%. Even if I spent every penny of it, I... [ More ]

Reply #44

tony95 — Mon, 02 Oct 2006 18:11:44 GMT

Annuities are great if you win while still realitively young. But anyone over 55 may prefer the lump sum. I am 34 and would want to get the most out of the money and my understanding is that the deferred tax savings on the annuity is like taking the lump sum at a guaranteed return of 8% interest, not to mention you can reinvest as the money comes in. I also agree that it will help keep your money safe from moochers, because it is a built in excuse i don't have access to most of the money .... [ More ]

Reply #43

Preppy — Mon, 02 Oct 2006 15:54:49 GMT

CA LotteryGuy, welcome to lottery post fellow Californian! Thanks for not arguing the tax rate is only 27% or some other low ball rate. Lottery winnings are taxed just like any other income so what would be the big problem. Do you work fewer hours to earn less money so your tax bill will be lower? You just have to make up the tax loss with smart investing, legal moves, deductions, or as Coin Toss said You can always buy a better annuity

First, if I hit the big jackpot I would follow my own... [ More ]

Reply #42

BaristaExpress — Mon, 02 Oct 2006 06:12:36 GMT

The other thing is the present day value of our currency. Heck I'd rather have a dollar while it's worth 65 cents today, than a dollar when it's value next year could be as low as 55 cents or even lower when that annuity check arrives. I want my money at it's current value today rather than at a undetermined lower value in the future like it could be by taking an annuity! Everyone knows our money does the worst in the world when trading against other currencies! Yes, our currency is the most sou... [ More ]

Reply #41

CA LotteryGuy — Mon, 02 Oct 2006 05:52:20 GMT

Well the issue is that we are not talking about level playing fields. The lottery gets to buy their annuity (most likely zero coupon bonds) before income taxes, while a lottery winner is subject to purchasing an annuity with post income tax funds. This is a HUGE difference; 35% in California, more in other states.

As far as You can always buy a better annuity is concerned, there is a lot of truth to that statement. Most likely you can purchase an annuity that is better, i.e. pays a bet... [ More ]

Reply #40

Coin Toss — Mon, 02 Oct 2006 03:57:45 GMT

CA Lottery Guy

Someone here on the board has a sig that says, You can always buy a better annuity

So I gues the point is that even if you want an annuity, take the cash lump sum from the state and find a better annuity than they'd offer.

Reply #39

CA LotteryGuy — Mon, 02 Oct 2006 00:55:56 GMT

Preppy, how about the effect of Income Taxes? Let us take a specific example, a Mega Millions Jackpot with an annuity value of $26 million and a cash value of $14,820,000 in the state of California.

The annuity comes out to 26 annual payments of $1,000,000. The withholding tax situation is federal income tax of 25% ($250,000) is taken (no state tax on lottery winnings in California) so your check from the lottery every year is $750,000. Keep in mind you will probably owe an addi... [ More ]

Reply #38

Coin Toss — Mon, 02 Oct 2006 00:25:48 GMT

Happy Rosh Hashanah and Yom Kippur justxploring,

Shalom.

All;

On the Learning Channel lotteyr program, (a lot more positive spin than the E! network Curse one), one of the people on there said something kind of od, he said, Never take lump sum, you lose your benefits . All I can think of is he meant the benefit of getting an annual check - for those who couldn't handle a lump sum.

Reply #37

noahproblem — Mon, 02 Oct 2006 00:10:20 GMT

Reply #36

Preppy — Sun, 01 Oct 2006 23:46:24 GMT

I am a total lump sum fan.

The annuity prize is a marketing gimmick to inflate the jackpot. The annuity prize is also an easy way to shirk responsibility and discipline. A good to excellent financial advisor could easily beat the low returns of zero's/strips government bonds and establish a financial plan.

I agree with four4me that the only reason a person should take the annuity is if that person has poor money habits. However, if a person has poor money habits taking the annuity wil... [ More ]

Reply #35

justxploring — Sun, 01 Oct 2006 22:10:10 GMT

Of course, if you've been in the military, you've eaten horse, so.....

to continue: If you've ever been wrong about something after a bet, you've probably eaten crow.

if you've ever had to give into a disagreement with your spouse, you've eaten humble pie

if you've ever been depressed about losing money or breaking up with someone, you've probably eaten your heart out.

if you're stubborn and think you're always right, you've probably eaten your hat a few times

if you've... [ More ]

Reply #34

Coin Toss — Sun, 01 Oct 2006 17:28:09 GMT

Just an FYI

In the Korean language, dog is kae and meat is gogi or Kogi

(k and g are the same letter), and there is a word, kaegogi,(kay -go-ghee, hard g) which means....well, do the math.

But it's a ceremonial thing kind of, and one breed of dogs that is raised for that purpose, they eat kaegogi on Buddhist holidays.

In some rural areas of Italy, they eat cats. Ptoooey.

I know we're talking about U.S. here in the thread, but every ethnic group brings its culture with it... [ More ]

Reply #33

justxploring — Sun, 01 Oct 2006 08:10:10 GMT

Four4Me, okay...if it's a guy thing I probably would never understand. Regarding the subject of annuity vs cash, let's hope one of us wins enough someday so we can decide which way to take the money! Most of the time I enjoy different viewpoints, so when I debate an issue, it's really not an argument.

Jarasan, Korea and Vietnam are different from China. I know that in many parts of Asia people eat dogs and they are served in restaurants. Cats are more of a delicacy. I was talking abo... [ More ]

Reply #32

jarasan — Sun, 01 Oct 2006 04:34:17 GMT

You guys are fighting like cats and dogs. I need to introduce you guys to some Korean and Vietnamese friends of mine (it's a different culture totally). Don't worry, I told them don't even think about it or I would put them on the menu, it's a USA culture thing, and they comply (no food shortages here). Cats and dogs fare better in the US. than anywhere else in the world: bottomline is: it doesn't matter what, who, whatever you are, the best place on this planet, is the USA. I've seen a lo... [ More ]

Reply #31

Coin Toss — Sat, 30 Sep 2006 23:51:46 GMT

justxploring

Stories like the one about Ms Ryan make me wonder if we wouldn't be better off finding a way to hit Pick 3, Pick 4, and maybe Cash 5 consistently enough to be comgfortable instead of hitting a huge jackpot.

I'm sure once word got out she was giving to charity that a ot of these people approaching here perceived her to be an easy touch.

I'd like to see someobody push for a law that winners have to remain anonymous.

Now there's a thought

Reply #30

four4me — Sat, 30 Sep 2006 15:02:10 GMT

justxploring wrote:

four4me, just because someone doesn't like an expression doesn't mean she doesn't understand it. Point taken sorry for the miss understanding

If someone told me to go *F* myself, I think I'd get the hint, i'd never say that to you hon!

but it would still bother me. Actually I was only kidding you since, unfortunately, most people use all sorts of expressions like that. Ah yes it's a guy thing.

You're obviously not a cat lover. Actually i like cats but i am death... [ More ]

Reply #29

Coin Toss — Sat, 30 Sep 2006 14:24:11 GMT

floridian

If you're refering to the Bible saying, it's not 'money is the root of all evil , it's the love of money is the root of all evil . Some translations say the desire for...

But yeah, it would be a good topic.

Reply #28

floridian — Sat, 30 Sep 2006 12:58:43 GMT

I just love to read your posts. This one is very good and brings home several excellent points. I think everything you said makes good sense. You are correct when you indicated that the Lottery is showcasing Sheelah Ryan because that is all they really have that stands out. However, she did do some good.

You are also correct in pointing out that people who win big have many new problems and trouble they did not have before. So many people pulling at you for a hand out. What a bummer

Reply #27

justxploring — Sat, 30 Sep 2006 08:46:19 GMT

four4me, just because someone doesn't like an expression doesn't mean she doesn't understand it. If someone told me to go *F* myself, I think I'd get the hint, but it would still bother me. Actually I was only kidding you since, unfortunately, most people use all sorts of expressions like that. You're obviously not a cat lover.

BTW, most of the Chinese Americans I know have never eaten a cat in their entire lives and have never even thought about it.

Reply #26

four4me — Sat, 30 Sep 2006 07:38:10 GMT

depends on what Chinese restaurant you walk by.

You know what the term means i hope there are more ways than one to carve up the lottery winnings.

personally i've never seen a skinned cat. seen a few hairless ones though.

Reply #25

justxploring — Sat, 30 Sep 2006 07:11:35 GMT

there are a more than a few ways to skin the cat so to speak

I hate that expression. The 2 birds with 1 stone one is pretty bad too, but skinning a cat...makes me shudder.

Reply #24

four4me — Sat, 30 Sep 2006 05:49:30 GMT

thanks Rickg for your kind words

Everyone there are a more than a few ways to skin the cat so to speak. if you accept the annuity you must remember. It's out of the lotteries hands at that point they buy a bond to secure your winnings. Of course they make money. But so do you. The bond is set up to include any interest changes. And while it's up to you what you do with your checks you can buy insurance to cover medical costs. Take into considerations a trust. Hope that Bush signs the inherit... [ More ]

Reply #23

justxploring — Sat, 30 Sep 2006 05:16:42 GMT

Floridian, you took the age comment completely wrong! An annuity is often a good way to protect yourself from losing everything should you become ill. However, if someone continues to receive payments as income from a lottery, I don't think that money is protected because it is income. You are actually receiving the interest only on an investment. Someone over 70 might want to contact an attorney to make sure Long Term Care and other important issues are addressed. Also, when you die if yo... [ More ]

Reply #22

Rick G — Sat, 30 Sep 2006 03:50:44 GMT

HA! Good one

Reply #21

jarasan — Sat, 30 Sep 2006 03:31:58 GMT

Today I chose the cash option for yesterdays $13.00 hit in D.C. Rolling Cash, it was a tough decision but I took it and re-invested for this evenings play and won $2.00 for a loss of $11.00! Shoulda gone with the annuity. LOL jarasan

Reply #20

Rick G — Sat, 30 Sep 2006 01:40:16 GMT

Thanks, Floridian.

Cool story.

Reply #19

JimmySand9 — Sat, 30 Sep 2006 01:30:16 GMT

I voted yes, and for the following reason. Advertising the so-called annuity jackpot is, to be frank, pretty decieving. Right now, the Mega Millions jackpot is $12,000,000, or so they say. In actuality, that couldn't be further from the truth. The top prize is really either about $7,000,000 or $480,000 per year for the next 25 years. Note neither of those options is the $12,000,000 advertised. On top of that, they don't mention the fact that Uncle Sam will be taking a big chunk of whatever you... [ More ]

Reply #18

floridian — Sat, 30 Sep 2006 01:15:31 GMT

Some people seem to think age should be a consideration one way or the other.

If you do not want to leave anything to your kids or other charities by all means take the lump sum and spend, spend, spend. Or take the annunity and spend, spend, spend.

However, I am only speaking for myself, I really would like to do some good somewhere. You can create a blind trust and let the money work toward whatever good you chose and be able to dodge a lot of tax stuff.

Case in point, Sheelah Ryan of... [ More ]

Reply #17

BaristaExpress — Sat, 30 Sep 2006 00:36:36 GMT

I do have to say that this one topic does get it's fair share of posting. Most states who buy the annuities for the winners of their states lottery has a contract with an insurance company or two, maybe 3 at best just for purchasing said annuity. This is why they don't get the best rates, they are locked in at one rate at the time of the signing of said contract. I know most of you know, you could shop around with the many different insurance companies out there and get a much better rate than t... [ More ]

Reply #16

JAP69 — Fri, 29 Sep 2006 23:24:00 GMT

Reply #15

Rick G — Fri, 29 Sep 2006 23:08:23 GMT

I agree with justx that there should be an option on all jackpot games because of age considerations. The age factor would affect everyone's decision.

And I agree with DoubleDown...CashOnly would turn down a $25,000,000 win if it was only paid in an annuity...lol

Reply #14

ryanm — Fri, 29 Sep 2006 22:41:40 GMT

Powerball really didn't lower their cash prize amounts. The cash value is what it is. They only inflated their annuity. If they didn't change the annuity structure, the annuity would just be lower instead of the cash being higher.

Reply #13

weshar75 — Fri, 29 Sep 2006 21:02:42 GMT

I think that the Lotteries will always have both annuity and Cash value to give to its winners. The big hook is seeing $300 million up on a billboard instead on $145 million cash. Not every lottery player is that into their games so they would wait to play a cash value game longer. But once they here $200 million or $300 million they have to get at least one ticket. It is just a shine hook to reel in the suckers. I only pay attention to the cash value myself. Then I turn into a sucker when... [ More ]

Reply #12

justxploring — Fri, 29 Sep 2006 20:47:01 GMT

I agree with the value of an annuity. Having a guaranteed stream of income is very comforting to many people and often a wise investment. However, I still think we need to have a choice. For me, if I won the lottery, it would depend upon the amount of the jackpot and the interest rates at the time. Also, my age at the time of the win would matter. I've read a lot of press releases where the winner was 75 or 80.

When FL changed from a 20 year to a 30 year structured annuity, I got very annoye... [ More ]

Reply #11

DoubleDown — Fri, 29 Sep 2006 19:39:43 GMT

Cash Only, I love ya' but you cannot argue with this reasoning.

Rick, Yes he can and yes he will...There is no reasoning with him. He still calls the games names of his choosing rather than their real names. He has been challenged to prove his rant, and the silence was deafening.

DD

Reply #10

Rick G — Fri, 29 Sep 2006 19:33:34 GMT

4-4-me,

This is absolutely the most intelligent thing I've read on LP considering this subject.

Lottery winners should do exactly as you suggest. Protect the principle, be guaranteed the total amount of the jackpot, and gamble (invest) from their annuity payments.

Very good post.

Cash Only, I love ya' but you cannot argue with this reasoning.

Reply #9

Coin Toss — Fri, 29 Sep 2006 19:14:07 GMT

I voted yes, only for this reason, if any lottery offered nothin but cash option I'm afraid that the prizes would be juggled with so they'd be mush less than any current annuity or cash system.

I'm thinking of a lot of threads I've read here. Since I've been a member here Powerball has lowered the amount of the cash prize.

I wouldn't even be surprised to see a ceiling on a cash option only lotto.

Reply #8

Just6ntlc — Fri, 29 Sep 2006 18:19:47 GMT

LOTTOMIKE, my vote is yes in the future. I hope in the future all jackpots will have cash option only.

Reply #7

CASH Only — Fri, 29 Sep 2006 18:00:54 GMT

Anybody can take a lump sum and use some or all of it to purchase an annuity. But some lottery games (Lose for Life in GA) still force winners to receive periodic payments, with no cash option.

Reply #6

floridian — Fri, 29 Sep 2006 17:57:06 GMT

This is one of my pet peeves. How did this idea ever come about that annunities are bad. I know in the short time I have been here this subject has really been discussed in great detail.

This is what I know speaking for Florida only!!

The Lottery Commission in Florida wants desperately to buy back annunities from folks that have choses to go that way.

In the fine print it states that if a Lottery winner makes more in interest during the life of the annunity (the anticipated return... [ More ]

Reply #5

CASH Only — Fri, 29 Sep 2006 17:51:42 GMT

i'm cash only and of course annuities suck

Right from the horse's mouth

Reply #4

four4me — Fri, 29 Sep 2006 17:48:39 GMT

if people understood how annuities worked they might fare better in the long run and example would be if you won 10 million or more and took the annuity.

Take the first check minus say 100 grand and put the rest in the bank. do not touch any of the money for the first year. longer if you think you could. After the first year set up a portfolio with the second check and live off the interest on the first check you kept in the bank. There are many ways an annuity could work out better than a l... [ More ]

Reply #3

emilyg — Fri, 29 Sep 2006 17:42:24 GMT

Reply #2

Rick G — Fri, 29 Sep 2006 17:35:57 GMT

I think if more people took the annuity option, the better their money will be handled, the longer it will last, the less chance it will be stolen or mooched, and most important of all, the less chance of a lottery win ruining your life.

Reply #1

justxploring — Fri, 29 Sep 2006 07:17:34 GMT

Choices are never a waste.

a poll about annuities and lump sum

LOTTOMIKE — Fri, 29 Sep 2006 06:56:20 GMT

how do you feel about annuities and lump sums?

do you think annuities are a waste.