Does the increase in the return on bonds increase the payout on annuity's

Reply #14

KY Floyd — Fri, 23 Dec 2016 19:39:58 GMT

First, as long as PB has a minimum jackpot the lump sum is never going to be extremely tiny except in the very unlikely event of being split several ways. Even if sales drop to a small fraction of what they are now the cash value of the minimum jackpot will still be the amount necessary to fund the annuity. If the cash value was only 40% of the annuity value the lump sum would still be $16 million, and the after tax net would be $8 million or more. Today a really safe investment may only produce... [ More ]

Reply #13

Kingofearth — Thu, 22 Dec 2016 19:44:50 GMT

If the lump sum would be extremely tiny to the point that you can't live extravagantly off of, why not just get a nice check instead? I expect to live way past any annuity timeline, so why not get all that extra cash

Reply #12

Redd55 — Thu, 22 Dec 2016 14:54:51 GMT

Powerball Jackpot for Wed, Dec 21, 2016

$40,000,000

$23,700,000

Powerball Jackpot for Wed, Sep 21, 2016

$40,000,000

$26,800,000

Powerball Jackpot for Wed, Aug 3, 2016

$40,000,000

$28,100,000

Powerball Jackpot for Wed, May 11, 2016

$40,000,000

$26,500,000

Powerball Jackpot for Sat, Mar 5, 2016

$40,000,000

$26,300,000

---------------------

Those are some big swings. We're talking $4.4 million from August to December.

Reply #11

savagegoose — Wed, 21 Dec 2016 11:04:20 GMT

oh ok i used to work out my share of the prize by dividing the annuity by 5.2; 2.6 for the total cash amount, but that has changed now. closer to divide by 6 or 3. smaller cash amounts , higher advertised jackpots. got it.

Reply #10

KY Floyd — Wed, 21 Dec 2016 06:33:36 GMT

the CASH VALUE would go down

It goes down relative to the advertised annuity, but since the annuity is determined by how much cash can be invested it's really that the annuity value is going up.

The exception would be for an advertised jackpot that's not fully funded by sales, which usually means those that are less than $100 to $110 million (advertised annuity, of course). If somebody wins Wednesday's jackpot that's advertised as $40 million they'll get $23.7 assuming they take the cash.... [ More ]

Reply #9

DELotteryPlyr — Mon, 19 Dec 2016 21:26:26 GMT

Yea, it 'clicked' when I was at work - the CASH VALUE would go down since rates are better.

Thanks for the examples.

Nice that we have people on this site that know about all facets of the lottery.

Reply #8

KY Floyd — Mon, 19 Dec 2016 21:00:30 GMT

The annuity value is always based on investing the cash sum, so it always reflects the interest rates that are earned by investing the cash.

If you've been paying attention lately you should see that the cash value is a significantly smaller percentage of the annuity now than it was a few months back. The most recent PB jackpot had a cash payout of $254.6 million, which is just 60.5% of the $420.9 million annuity value, whereas the $165.6 million cash value of the previous PB jackpot ( 9/17/1... [ More ]

Reply #7

Raven62 — Mon, 19 Dec 2016 18:20:08 GMT

If you were alive during the World War II German occupation of Belgium maybe you'd understand how insulting you are

Reply #6

Sunglasses — Mon, 19 Dec 2016 16:56:11 GMT

You could use inflation to pay of credit. I think that your friend Adolf did it that way.

Reply #5

Raven62 — Mon, 19 Dec 2016 16:15:01 GMT

If the Economy Collapses the Money you have will become Worthless!

https://www.thebalance.com/u-s-economy-collapse-what-will-happen-how-to-prepare-3305690

https://www.shtfplan.com/headline-news/billionaire-warns-of-total-collapse-end-game-scenario-no-way-out-your-money-will-be-worthless_03012015

Reply #4

rcbbuckeye — Mon, 19 Dec 2016 15:42:59 GMT

At my age there is no way I take an annuity. I know my kids/wife can inherit an annuity, but I simply don't trust that the money will always be there for the life of the annuity. Who knows, the government might decide to do funny stuff with annuities. Increase taxes...etc.

Reply #3

Raven62 — Mon, 19 Dec 2016 15:31:37 GMT

It's all about the Time Value of Money

Reply #2

Tialuvslotto — Mon, 19 Dec 2016 14:34:19 GMT

Annuity rates are based on the interest rate in effect at the time the annuity is purchased.

But why on earth would you take an annuity payment over a lump sum

Reply #1

Sunglasses — Mon, 19 Dec 2016 14:10:03 GMT

Ask 007, he must know it

Does the increase in the return on bonds increase the payout on annuity's

DELotteryPlyr — Mon, 19 Dec 2016 10:48:39 GMT

I watch way too much business news - with the rise in the bond rate (rate of return) do the annuity rates go up? I thought they were based on the bond rate? Hoping someone smarter than me can help, thanks.