Why Would Anyone In Their Right Mind Choose Annuity instead of Cash Payout for Powerball?

Reply #24

sirbrad — Fri, 15 Jan 2016 22:47:03 GMT

I would take the annuity if it were that big of a jackpot because after the first year I would be set for life anyway, all the other checks would just be icing on the already big enough cake. So it would not matter. Although I highly doubt anything is going to happen to the annuity and I doubt the tax rate is going up to 90% again, that was like one time back in the 40's I think. Look how much they make from PB and how successful it has been for so long. It just keeps getting higher and more suc... [ More ]

Reply #23

ressuccess — Fri, 15 Jan 2016 21:45:14 GMT

I think they need to take the lump sum because they desperately need the money.

Reply #22

dkwillis2000 — Fri, 15 Jan 2016 14:54:03 GMT

I read (somewhere over the past couple of days) that if you receive the 29-year annuity, that the winner could will that to his/her estate, and at the winner's death, the beneficiary (or beneficiaries) can elect to continue to reach an annual payment or get a payout. Of course, if there were two or more, they would have to agree on one choice/decision. That could be interesting -- or a big mess.

Not a lawyer--don't know any...but I read it on the Internet -- so you know it has to be true. LOL... [ More ]

Reply #21

Brcebrce — Fri, 15 Jan 2016 11:55:40 GMT

Well it seems the biggest concerns for taking the annuity is 1, higher tax bracket and 2, government defaulting on the payments.

1. it's free money plan around what you can save.

2. if the government stops paying lottery winnings when we are the ones that fund it, there are much bigger problems.

What the states get from the lottery is a drop in the bucket of the education budget but still free money for it.

Nowhere is it written that you have to spend each years returns, have fun wit... [ More ]

Reply #20

Murgatroyd — Wed, 13 Jan 2016 18:03:35 GMT

A modest 10% each year. Right. Good luck with that.

I ran some numbers last night, and if you go for a no-risk low-return investment strategy (i.e. I am more concerned with the return of my money than the return on my money ), you may well end up with more in the long run by taking the annuity.

Of course, with the jackpot this large, it doesn't really matter how - or even if - you invest. With no investment returns at all, you could still spend 3-4 million a year (with annual increases to... [ More ]

Reply #19

travelintrucker — Wed, 13 Jan 2016 16:23:43 GMT

You'd file taxes on sold investments. Really not much difference from that perspective. My thoughts on taking cash over the annuity are, you'll get a better return in the same time frame if you compound a modest 10% return each year.

Reply #18

Murgatroyd — Wed, 13 Jan 2016 00:49:53 GMT

The state where you bought and redeemed the ticket is the state where you have the income, so they get the first shot at taxation. Most states have reciprocal tax agreements to avoid double taxation, so if your home state's tax rate is less than or equal to that of the state where you bought the ticket, you won't owe anything more. If your home state's tax rate is greater, you'll owe them the difference.

I am not an expert. Free tax advice on the internet is worth what you paid for it.... [ More ]

Reply #17

Enigmas — Tue, 12 Jan 2016 23:36:48 GMT

Some have made a pretty good argument for the annuity.

what happens if you move to another State? Do you get taxed from the State you originally won it in? Do you get taxed only in your new State (if they tax income)? Or do you get hit with a possible double whammy from both States

Reply #16

Groppo — Tue, 12 Jan 2016 21:06:29 GMT

.

Ridiculous,

If you're in NY and you win, the first thing you do after collection, is leave.

Nobody in their right mind, #1 would live in NY and #2, certainly wouldn't wait around for no 30 years, if they won something that could easily take them all the way to the other side of this country.

NY charges 8.8%

NJ just across some bridge charges only 3%

Pennsylvania? 0

Reply #15

azares — Tue, 12 Jan 2016 19:52:27 GMT

I am inclined to go with annuity with guarantied a steady income stream, and can help reduce taxes. The only catch if you die along the way the federal tax is due on the balance of remaining lump sum. But the IRS will be amenable to your heir will still collect the annuity with extra taxes called penalty.

Reply #14

Enigmas — Tue, 12 Jan 2016 19:17:22 GMT

I didn't mean safe and secure off the gird money.

By safe, secure and off the grid I meant the winner and their residence. One can easily plop some money down on a large plot of land and build a self sustaining home(s), secure it and invest in tried and true currencies like precious metals. Heck if you're so inclined you can even buy gold/silver etc smelt it yourself.

All the while one can still live off the interest of what's left of the lump sum payout.

Or you could chose the 30 years... [ More ]

Reply #13

Todd — Tue, 12 Jan 2016 18:59:01 GMT

Reply #12

savagegoose — Tue, 12 Jan 2016 18:48:22 GMT

Reply #11

Raven62 — Tue, 12 Jan 2016 18:44:55 GMT

When they eliminate Cash and only Digital Money exists their will be no Safe Secure Off-Grid Money.

Reply #10

Enigmas — Tue, 12 Jan 2016 18:32:42 GMT

The flip side to that is that the money is worth what it's worth now. Who knows how much it will be worth in 10, 15, 20 or 30 years.

At least by choosing cash now you can position yourself better for the future (secure and off the grid); at least that's my thinking.

Reply #9

Raven62 — Tue, 12 Jan 2016 18:29:12 GMT

Become More Informed Before Deciding: http://www.businessinsider.com/should-you-take-the-annuity-or-the-lump-sum-if-you-win-the-lottery-2013-9

Reply #8

savagegoose — Tue, 12 Jan 2016 18:23:06 GMT

oh and the gov uppig top rates back to %90 being a risk prob worth considering, dont forget the witholding tax on moving large sums out of the country

Reply #7

Raven62 — Tue, 12 Jan 2016 18:22:02 GMT

Spreading the payments over time guarantees a steady income stream, and can help reduce taxes.

Reply #6

wander73 — Tue, 12 Jan 2016 18:02:22 GMT

I heard go for cash.

Reply #5

savagegoose — Tue, 12 Jan 2016 17:59:55 GMT

because I would be absolutely stoked with winning $30 mill, ad have a hard time spending it,and then i get to be dismayed at much richer i am the next year and get to try investing again then again next year. and again, and again and again.... etc.

say you chose an investment house that lost you %20 that 1st year? well now you know better!

Not that ill be taking the annuity, but tats the sort of reasons i wouldnt mind if i got paid via one at this sized jackpot

Reply #4

BrunoDog4 — Tue, 12 Jan 2016 17:33:16 GMT

Yeah that's exactly how I think. Wasn't there already a State where they didn't have the money on hand to pay the lottery winner. Like I said, other than not trusting yourself with that large an amount of money it makes zero sense to take not take a Cash Payout.

Reply #3

LiveInGreenBay — Tue, 12 Jan 2016 17:30:04 GMT

I agree. National debt is over $19,000,000,000,000. Unsustainable, when things come crashing down does anyone really think the money will be there for annuity payments? The government will snatch-up that money so quick it'll make your head spin.

Reply #2

bigbear29 — Tue, 12 Jan 2016 17:24:20 GMT

It's no way I will take a annuity, I would found two or three special banks that can handle that amount of money. I would not truth the lottery/government with my money every year.

Reply #1

eek198 — Tue, 12 Jan 2016 17:17:33 GMT

i cant imagine filing taxes every year for the annuity payments.. pain in the A** lol

If you're in a state like NY and you're greedy.. i guess someone would go for the annuity in order to get more money.

Why Would Anyone In Their Right Mind Choose Annuity instead of Cash Payout for Powerball?

BrunoDog4 — Tue, 12 Jan 2016 17:13:35 GMT

Other than not trusting oneself with a large sum of money, why would anyone who won a Powerball Jackpot choose an annuity over a Cash Payout? I keep trying to think of any reasons and I can't think of one other than not trusting yourself.