Lump Sum or Annual Payments?

Reply #18

CalifDude — Mon, 26 Jul 2004 14:04:42 GMT

Phantomrainbow, yes you need help!! You don't understand money, so which ever way to take your big winnings...GET HELP

Reply #17

phantomrainbow — Mon, 26 Jul 2004 06:03:19 GMT

I am going by what i saw in the movie brewsters millions with richard pryor. he had the money at a bank that paid 20% some percent a year,i think it was the bank of new york,haven't seen the movie in a while. it was for small countries and millionaires,billionaires,too. they said the interest rate amount,it was alot,i didnt know if it was just for the movie or not,someone i worked with told me there was a bank like that.i dont know that much about managing money, but if i were to win ,i would su... [ More ]

Reply #16

CalifDude — Sun, 25 Jul 2004 08:51:57 GMT

Phantomrainbow, I really do hope you win and I wish you good luck. You and I don't agree on the best way to receive the money, but that's not a problem with me!! I do think you are naive about a number of things, but maybe that's because of what I have experienced in my lifetime and what I have seen when I was working in the financial industry. I was a life insurance broker for about 6 years. My goal was only to educate people and try to keep them from making foolish errors like I had heard... [ More ]

Reply #15

phantomrainbow — Sun, 25 Jul 2004 08:01:25 GMT

i still say annuity for me. i honestly don't think i could manage the lump sum at once. it would be too much to worry about,say 1-20 million a year would be easier to manage for me. let's say that all you cash only people would win ,say 400 million plus,just for fun. would you still take the cash option? i wouldn't worry too much about estate taxes and stuff on all that money,it isn't like they played or bought the ticket. so i say they should and would be happy with what they get,if not they do... [ More ]

Reply #14

CalifDude — Thu, 22 Jul 2004 13:13:25 GMT

Fwup, I agree that there are other ways than just the 2 I gave. Yes, some people would be able to do those things you list, but when I worked in the financial industry, I found that people needed help! I would not suggest that someone that took the lump sum would have only 1 paycheck per life!!! That would be the wise person that would seek professional advice and invest the money and live off the interest.You suggested that the person could take the annual payments and quit their job and liv... [ More ]

Reply #13

CASH Only — Wed, 21 Jul 2004 23:52:57 GMT

Choose CASH or don't play

Reply #12

bobo7703 — Wed, 21 Jul 2004 23:42:07 GMT

annuity all the way

Reply #11

Fwup — Wed, 21 Jul 2004 23:12:34 GMT

CalifDude,You're assuming that a person who won the lottery has two choices, 1. Take the lump sum and invest it, or 2. Take the annuity and spend every penny of it every year. I can think of at least two more options, 3. Take the lump sum and blow most of it on crackpot investments, or 4. Take the annuity, and each year spend some, invest some, and save some. You'd be suprised at how many people choose the third option. I think it's a little over 80%. On the other hand, if you choose the 4th opt... [ More ]

Reply #10

CalifDude — Wed, 21 Jul 2004 22:47:09 GMT

Quote: Originally posted by Lottery_Analyst on July 21, 2004I believe in most cases that Lump sum is better, but it will truly depend on your own, personal financial situation. The answer could be totally different between two people. Let's say for example that two people each win $10 Million dollars. One person is 19 and the other is 49. I would recommend to the 19 year old to take the payment option and for the 49 year old to select the Lump Sum option.Most 19 year olds do not yet know how... [ More ]

Reply #9

whodeani — Wed, 21 Jul 2004 18:23:34 GMT

I would take the lump sum regardless, and I would strongly suggest that if ones wins a huge jackpot ($150 million+) , the lump sum should be taken. If you take the payments and you would happen to pass away during that time, estate taxes become due immediately on any remaining payments that are still to be paid to your estate. That could be millions upon millions of dollars that would have to be paid that you may not have lying around.

Reply #8

Lottery_Analyst — Wed, 21 Jul 2004 17:38:50 GMT

I believe in most cases that Lump sum is better, but it will truly depend on your own, personal financial situation. The answer could be totally different between two people. Let's say for example that two people each win $10 Million dollars. One person is 19 and the other is 49. I would recommend to the 19 year old to take the payment option and for the 49 year old to select the Lump Sum option.Most 19 year olds do not yet know how to manage their finances properly, so they would possibly h... [ More ]

Reply #7

CalifDude — Wed, 21 Jul 2004 14:32:53 GMT

Ledhhed22 and phantomrainbow, maybe in your state(s) you can decide after you win, but in California we have to mark it on the play slip and it can not be changed (it has been tried in court and lost). Ledhed22 you said you are set for life...maybe but the checks STOP in 26 years. If you read books written by people that hit the lottery, you will see some of the problems they have had and why so many of them are broke! For one thing, most of us are not used to budgetting ONE paycheck per year... [ More ]

Reply #6

CASH Only — Wed, 21 Jul 2004 14:18:01 GMT

I root only for people who would take the lump sum.

Reply #5

phantomrainbow — Wed, 21 Jul 2004 08:30:40 GMT

i would take the annuity,i dont care how much the lump sum is,i would still have more than what i started with,and it would be a good investment for a few dollars.i could lie and say i only won a certain amount and show the first annuity check,that way people wouldnt be bummin money from me.i say people should do what they think is best for them,some people who are older might want the lump sum,or younger people,to invest how they want. but i would rather have the annuity,that way if i loose it

Reply #4

Ledhed22 — Wed, 21 Jul 2004 06:23:48 GMT

Unless I hit a - HUGE - jackpot all by myself I would take the payments. You would end up with more money in the long run that way and you're set for life. For me to take a lump sum the lump sum would have to come to $25 Million or greater after the deduction for the lump sum was made AND after all the taxes were taken out.

Reply #3

dphillips — Wed, 21 Jul 2004 00:50:27 GMT

I agree with the lump-sum payment. Of course, I'm single with no children, and believe me, I'll never marry if I hit the lottery just for some tax relief! dphillips (Blue

Reply #2

CalifDude — Tue, 20 Jul 2004 22:56:25 GMT

I forgot to mention that when I figured the tax I used the tax rate for Married filing jointly.

Reply #1

MetroPlex — Mon, 19 Jul 2004 16:38:38 GMT

I would take take the lump sum. Only a fool who didn't need the money might take payments.MP

Lump Sum or Annual Payments?

CalifDude — Mon, 19 Jul 2004 12:37:36 GMT

I promised I would work this up again, so here it is: I believe that the lump sum payment for a large Lotto win is better than the annual payments. Here is an example for California. The lump sum is a little less than one-half of the announced Jackpot. Using the $7 million example that California uses on their web site, I will make the comparison.If you won $7 million or your portion was $7 million, you would get approximately $3.3 million lump sum before taxes. After taxes (using the 2003 tax r... [ More ]