Why people who won the jackpot frequently decide to choose money cash over annuity money?

Reply #22

PrinceRene — Wed, 11 Feb 2015 06:35:22 GMT

Take the cash. Interest rates are at record lows.

Reply #21

mikeintexas — Wed, 11 Feb 2015 04:48:53 GMT

There ya go. I don't like to point that out because I've poked some fun at conspiracy theorists before, some in here but mostly in other forums. (I was a Ron Paul supporter, so I ran across a bunch of 'em) I also tend to be more of a pessimist than optimist as I grow older.(doesn't make me a bitter old coot, just a wary and cautious one)

At the risk of being called a conspiracy nut or survivalist, one of the things I'd invest in if I won would be a large supply of freeze dried foods and th... [ More ]

Reply #20

Drenick1 — Wed, 11 Feb 2015 04:24:27 GMT

Or the world could be in complete chaos.

Reply #19

Teddi — Wed, 11 Feb 2015 04:10:16 GMT

I'm definitely doing a cdars account. Up to $50 million insured is a wonderful thing. I read that the interest rate used to be lower on cdars than other high net worth interest bearing accounts because of how much paperwork and man hours are involved in managing the account, but as with everything to do with the wealthy, the interest rate is negotiable. I'd love to net a 3% return on $10 million per year.

That'll be my annuity.

Reply #18

noise-gate — Wed, 11 Feb 2015 04:07:54 GMT

I am reminded of those pictures of Mayweather counting his stash which looks like it's 2 feet high- and wondering what it would feel like to run your fingers through that sea of Benjamin's..

Looking at your own personal fortune and knowing that it's all there, right in front of you instead of thinking about another delivery for the next 29 years for some reason does not feel right. As someone said Show me the Money

Reply #17

mikeintexas — Wed, 11 Feb 2015 03:52:08 GMT

I imagine I'll be in Depends before the 30 yr. annuity payout ends.

Reply #16

mikeintexas — Wed, 11 Feb 2015 03:08:28 GMT

^This. Ditto. Me, too. I'm certainly going to do something with some or all of the money to make sure I have an income until I kick the bucket. I'm partial to the CDARS program, allowing for money above and beyond the FDIC normal insurable max to be insured. I know more money can be made w/ riskier investments, but it's protecting the bulk of it I'm concerned about. I did some quick figuring and if you could deposit $20 million in 5-yr. jumbo CDs at 1.5%, that would give you (after five years) a... [ More ]

Reply #15

maximumfun — Wed, 11 Feb 2015 03:07:19 GMT

cash v. annuity. I use to think it depends. Now I vote cash.

Reply #14

music* — Wed, 11 Feb 2015 03:01:56 GMT

HI RC, I will weigh in. It is called an irrevocable life insurance trust (IlIT) Hire an excellent Estate Planner to make it work for you. Do get all your ducks in a row before cashing your winning ticket in.

Time to party

Reply #13

mikeintexas — Wed, 11 Feb 2015 03:00:20 GMT

Yes, I've read that as well. I've also read there's some sort of insurance to help with that. It would certainly be something to consider.

If I win, I'm taking the CV option but I'll also look into making sure taxes will be taken out of any remaining monies in my estate before it's distributed to my heirs.

Reply #12

LottoMetro — Wed, 11 Feb 2015 02:51:44 GMT

It's not always a conscious choice. Those who buy quick picks in states where making the choice post-win is prohibited are stuck with the cash.

Reply #11

IPlayWeekly — Wed, 11 Feb 2015 02:37:14 GMT

I'm taking the cash... depending on the amount, I'd bank 75% and spend the rest

Reply #10

Romancandle — Wed, 11 Feb 2015 02:07:08 GMT

I've heard, but don't know if this is a fact... if you take the annuity and die before the full payout, your heirs or estate may be subjected to the entire tax bill at once for the value of the remaining payments.

So... for simplicity, let's say the jackpot's annuitized value is $30 and you get paid a dollar a year for the next 30 years and pay $0.25 each year in taxes.

In year 15 you kick the can... Uncle Sam says... gimme $3.75 in taxes now.

Well if your heirs are only getting a $1 a... [ More ]

Reply #9

Stack47 — Wed, 11 Feb 2015 01:45:02 GMT

Every time players catch jackpot fever we get lots of inaccuracies and the government keeps any annuity money at death is just one of them.

It would be interesting to go out and track down all the past winners, and see how much money they have now versus what they could've had, theoretically, with the annuity payments.

Found something interesting on USA Mega; the gross annuity payment increases each year making the idea of the losing it all at death even more silly.

Reply #8

mypiemaster — Wed, 11 Feb 2015 01:18:14 GMT

CASH is king no matter how you slice it.

Reply #7

WesternRedDoug — Wed, 11 Feb 2015 01:00:03 GMT

And on my short list of first things to do with a lump sum jackpot:

- create an annuity.

Reply #6

Shelby Mustang — Wed, 11 Feb 2015 00:46:19 GMT

My guess would be that they think they would die before they could collect all the annunity, but hey you could drop dead 5 seconds after knowing you've won so I say take the cash take the annunity either way YOLO

Reply #5

Stack47 — Wed, 11 Feb 2015 00:46:15 GMT

Someone told me that the money annuity can not be inherited; because, when owner dies the annuity money the U.S. government take possession this money annuities?

Just about every state lottery website explains what happens to an annuity if the winner dies and they explain it in depth to the jackpot winners. Would it make any sense to even offer a 30 year annuity if it's possible the government could get all the money if the winner dies

Reply #4

nist7seven — Wed, 11 Feb 2015 00:29:34 GMT

Okay, OP, whoever told you the annuity gets taken over by the government has no idea what they're talking about. That's such a stupid assumption that it truly bogles the mind. Anyway, the annuity is just like any other asset you have...you can put it in your will and designate an heir or family member to inherit that annuity.

Second, yes most lotto winners, if you look at the PB winner's page, choose to take lump sum. Most think they can beat the rate that the lotto can get the annuity to yo... [ More ]

Reply #3

mikeintexas — Wed, 11 Feb 2015 00:23:22 GMT

Many people think they can beat the rate of return on an annuity by investing the money on their own. That's debatable and depends upon a lot of factors, but it's a fact the lottery entity doesn't have to pay taxes on the investment income, so that should be a consideration. For some - such as myself - choosing the CV option makes much more sense since we're over 30 40 50 past a certain age and want to do things with or enjoy the bulk of the money while we still can. (if I had known I was going... [ More ]

Reply #2

WesternRedDoug — Wed, 11 Feb 2015 00:11:44 GMT

Check out the FAQs on the USA Mega page and the Powerball and MegaMillions pages for answers to that question and other similar ones. Winners to get to designate a beneficiary to receive their annuity.

There are plenty of reasons that people opt for the cash option:

- age. People want to spend, give and make decisions before they get too old.

- winner might think they can invest better and earn more than the sum the annuity will deliver

- some of the winners gone bankrupt stories inv... [ More ]

Reply #1

maringoman — Wed, 11 Feb 2015 00:06:12 GMT

I don't know about that but I do know that I would take a lump sum payout because I don't know if taxes are going to increase or decrease hahaha in the future. Look at the national debt to guide you on the direction taxes will go. Not good.

Why people who won the jackpot frequently decide to choose money cash over annuity money?

febausa — Tue, 10 Feb 2015 22:24:56 GMT

Why people who won the jackpot frequently decide to choose money cash over annuity money? Someone told me that the money annuity can not be inherited; because, when owner dies the annuity money the U.S. government take possession this money annuities? This is true? are there some other reason