MegaMillions advertised annuity

Reply #11

KY Floyd — Thu, 12 Apr 2007 05:03:59 GMT

There may be exceptions, but states generally tax income from that state. Becoming a non-resident won't change where the money comes from.

Reply #10

konane — Tue, 10 Apr 2007 20:07:13 GMT

Considering that Fair Tax http://www.fairtax.org/site/PageServer is gaining traction and could replace our entire federal income tax system and embedded taxes we never realize we're paying , then it is conceivable that lottery wins would not be taxable under Fair Tax.

Take the money and run is my opinion concerning any potential jackpot win.

Reply #9

LuckyLilly — Tue, 10 Apr 2007 19:26:47 GMT

Let's say you live in a state that taxes lottery winnings at 8%, and you win $20 million. Would it pay to take the annuity and move to a state that doesn't tax lottery winnings? You don't end up paying taxes to the state you bought the ticket in, do you? Just your state of residence

Reply #8

dvdiva — Tue, 10 Apr 2007 19:13:05 GMT

Considering the likelyhood of future tax increases it's far smarter to take lump sum now and put the money into different trusts. Another big advantage (assuming your state allows trusts to claim the prize) is protection against lawsuits.

Even if you can't handle money yourself a trust that is set up for you would generate money for the rest of your life. I personally find the whole annuity jackpot a scam. Prizes outside the US are given as cash and the advertized jackpot is what you get a ch... [ More ]

Reply #7

Just6ntlc — Tue, 10 Apr 2007 15:46:59 GMT

If I win a MM jackpot, I would choose lump sum (cash option).

Reply #6

OldSchoolPa — Mon, 09 Apr 2007 18:56:04 GMT

Always, Always, Always take the cash value settlement option.

If you're young enough and sensible, take the cash value option. What I mean by sensible is having the sense to spend no more than 10 percent of your net winnings each year. Even people who have taken the annuity option have run into financial trouble when they spent the next year's check the previous year. Taking the annuity therefore is not a guaranteed way to protect one from making dumb decisions. Also, if you happen to d... [ More ]

Reply #5

KY Floyd — Mon, 09 Apr 2007 18:54:15 GMT

This subject has been nearly beaten to death, and you can find a lot of opinions on it by using the search feature.

For starters, ignore anybody who offers a cookie cutter approach, whether it's to always take the cash, always take the annuity, take cash up to some amount and annuity over that, or anything else. It's a personal decision that should be the result of considering what you'd like to do with the money and what the financial realities are. What's a perfectly good decision for on... [ More ]

Reply #4

kjs703 — Mon, 09 Apr 2007 17:27:09 GMT

Counting Man:

Thanks for the sharing the spreadsheet.If I understand correctly, (which is no guarantee since I do not have a financial background)The Lump Sum amount and the annuity payment amount will be roughly the same after twenty-one years.But does this not assume that an intelligent investor is behind the scenes ensuring an 8% return? For example, if a person left the money in a savings account at roughly 3% interest how could one ever get the 8% return being projected? I do not kno... [ More ]

Reply #3

CountingMan — Sat, 07 Apr 2007 17:14:15 GMT

Ladies, Gentlemen:

Please see the copied spreadsheet below. Should anyone be interested in obtaining the Excel Spreadsheet, I will be glad to pass it along. It uses the following basic assumptions:

Annuity Payout per year: $38,500 times the number of millions won

Cash value at approximately 50% (PB is usually around 47-48%)

Average investment rate of return: 8%

Tax rate at 45% (includes 35% of federal, and roughly 10% for state, no deductions assumed as your income would be abo... [ More ]

Reply #2

LckyLary — Sat, 07 Apr 2007 15:31:16 GMT

If you're young enough to potentially get all the annuity payments, and the yearly amount is enough that you would have more than enough money to spend and invest, why not annuity? Then you don't have to wory about losing it all in a few years. On pots over 10 MILL I take Annuity. The theory is that with cash option you can get your own Annuity But with that much money per year I'd be happy with it.

Reply #1

Bradly_60 — Sat, 07 Apr 2007 15:00:08 GMT

One thing....TIME VALUE OF MONEY....money that you have now is worth more than some money that you can have in the future. Always take the cash if you are looking to be a smart investor.

B-rad

MegaMillions advertised annuity

kjs703 — Fri, 06 Apr 2007 19:00:57 GMT

Could anyone share the pros and cons of taking the advertised annuity vs the lump sum amount