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a poll about annuities and lump sum

Topic closed. 58 replies. Last post 10 years ago by JackpotWanna.

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should annuities no longer be an option and lump sum an only choice?

yes lotteries should offer only lump sum [ 8 ]  [16.67%]
no the lotteries should offer annuities too [ 31 ]  [64.58%]
i'm cash only and of course annuities suck [ 3 ]  [6.25%]
not sure at this time [ 6 ]  [12.50%]
Total Valid Votes [ 48 ]  
Discarded Votes [ 2 ]  
Rick G's avatar - avatar 1766.jpg
FEMA Region V Camp #21
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Posted: September 29, 2006, 7:08 pm - IP Logged

I agree with justx that there should be an option on all jackpot games because of age considerations.  The age factor would affect everyone's decision.

And I agree with DoubleDown...CashOnly would turn down a $25,000,000 win if it was only paid in an annuity...lol

Posted 4/6:  IL Pick 3 midday and evening until they hit:  555, 347 (str8).


    JAP69's avatar - alas
    South Carolina
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    Posted: September 29, 2006, 7:24 pm - IP Logged

    I think that the Lotteries will always have both annuity and Cash value to give to its winners.  The big hook is seeing $300 million up on a billboard instead on $145 million cash.  Not every lottery player is that into their games so they would wait to play a cash value game longer.  But once they here $200 million or $300 million they have to get at least one ticket.  It is just a shine hook to reel in the suckers.  I only pay attention to the cash value myself.  Then I turn into a sucker when the jackpot gets high and I get more tickets.-weshar75

    I Agree!

    WHATT

      BaristaExpress's avatar - BaristaExpressMX zpsfb0d8b5d.png
      Magnolia, Delaware
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      Posted: September 29, 2006, 8:36 pm - IP Logged

      I do have to say that this one topic does get it's fair share of posting. Most states who buy the annuities for the winners of their states lottery has a contract with an insurance company or two, maybe 3 at best just for purchasing said annuity. This is why they don't get the best rates, they are locked in at one rate at the time of the signing of said contract. I know most of you know, you could shop around with the many different insurance companies out there and get a much better rate than the state that you won the lottery in. So, why would you let the state choose the company they have a contract with for? and with such low rates? When you could do so much better on your own or with the help of a financial adviser in finding an annuity with a better rate and don't forget you can also choose the length of said annuity 10, 15, 20 years instead of the standard 26 - 30 years! Wow, look at all those light bulbs going off. "Well I'll be da**ed, it's about time" for all of you people who are such strong advocates in favor of the annuity! I'll take the cash payout and take what percentage of it I choose to put into an annuity of some kind, that is if it's in my best interest to do so (tax wise)!

      Keep dreaming the impossible dream, it just may come true! Thumbs Up

        floridian's avatar - DiscoBallGlowing

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        Posted: September 29, 2006, 9:15 pm - IP Logged

        how do you feel about annuities and lump sums?

        do you think annuities are a waste.

        Some people seem to think age should be a consideration one way or the other.

        If you do not want to leave anything to your kids or other charities by all means take the lump sum and spend, spend, spend. Or take the annunity and spend, spend, spend.

        However, I am only speaking for myself, I really would like to do some good somewhere.  You can create a blind trust and let the money work toward whatever good you chose and be able to dodge a lot of tax stuff.

        Case in point, Sheelah Ryan of Winter Springs made history when she won a then record $55.16 million  FLORIDA LOTTO™ jackpot in 1988.  Ryan was the Florida Lottery’s 10th FLORIDA LOTTO jackpot winner.

        Ryan, 63 at the time, used her good fortune to help others. She established the Sheelah Ryan Foundation Inc., to help abused women, provide scholarships to Seminole County students, pay for job training programs and provide Meals on Wheels for the elderly.

        Her gracious generosity prompted the Florida Lottery to name its winners lounge the "Sheelah Ryan Winners' Lounge", a tribute to a single winner who continues to make a difference in the lives of Floridians.

        Ryan, of Seminole County, died in 1994 at age 69. Ryan's foundation continues to display her philanthropic vision.

        Now folks you want to talk about doing good in your life, we are all going to die sometime.  If you do what Sheelah did it does not matter what you pick.

        However, my guess is that the Ryan Foundation is pretty heavily invested in trust annunities.

        To give you an idea of how much we are talking about 55 million in 1988 relatively speaking is worth 91 million today.  Soo this was a huge Jackpot.

         

        Floridian

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          Posted: September 29, 2006, 9:30 pm - IP Logged

          I voted yes, and for the following reason. Advertising the so-called "annuity" jackpot is, to be frank, pretty decieving. Right now, the Mega Millions jackpot is $12,000,000, or so they say. In actuality, that couldn't be further from the truth. The top prize is really either about $7,000,000 or $480,000 per year for the next 25 years. Note neither of those options is the $12,000,000 advertised. On top of that, they don't mention the fact that Uncle Sam will be taking a big chunk of whatever you actually get (god forbid a common man ever become wealthy).

          Will such an event ever occur? Not unless the planets come into perpetual alignment and women actually find me attractive. Or in laymans terms, no. But if a lottery wanted to be 100% honest in their operations, that's what they'd do.

          (insert signature here)

            Rick G's avatar - avatar 1766.jpg
            FEMA Region V Camp #21
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            Posted: September 29, 2006, 9:40 pm - IP Logged

            Some people seem to think age should be a consideration one way or the other.

            If you do not want to leave anything to your kids or other charities by all means take the lump sum and spend, spend, spend. Or take the annunity and spend, spend, spend.

            However, I am only speaking for myself, I really would like to do some good somewhere.  You can create a blind trust and let the money work toward whatever good you chose and be able to dodge a lot of tax stuff.

            Case in point, Sheelah Ryan of Winter Springs made history when she won a then record $55.16 million  FLORIDA LOTTO™ jackpot in 1988.  Ryan was the Florida Lottery’s 10th FLORIDA LOTTO jackpot winner.

            Ryan, 63 at the time, used her good fortune to help others. She established the Sheelah Ryan Foundation Inc., to help abused women, provide scholarships to Seminole County students, pay for job training programs and provide Meals on Wheels for the elderly.

            Her gracious generosity prompted the Florida Lottery to name its winners lounge the "Sheelah Ryan Winners' Lounge", a tribute to a single winner who continues to make a difference in the lives of Floridians.

            Ryan, of Seminole County, died in 1994 at age 69. Ryan's foundation continues to display her philanthropic vision.

            Now folks you want to talk about doing good in your life, we are all going to die sometime.  If you do what Sheelah did it does not matter what you pick.

            However, my guess is that the Ryan Foundation is pretty heavily invested in trust annunities.

            To give you an idea of how much we are talking about 55 million in 1988 relatively speaking is worth 91 million today.  Soo this was a huge Jackpot.

             

            Floridian

            Thanks, Floridian.

            Cool story.

            Posted 4/6:  IL Pick 3 midday and evening until they hit:  555, 347 (str8).


              jarasan's avatar - new patrick.gif
              Harbinger
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              Posted: September 29, 2006, 11:31 pm - IP Logged

              how do you feel about annuities and lump sums?

              do you think annuities are a waste.

              Today I chose the cash option for yesterdays $13.00 hit in D.C. Rolling Cash, it was a tough decision but I took it and re-invested for this evenings play and won $2.00 for a loss of $11.00!  Shoulda gone with the annuity.  LOL jarasan Crying

                Rick G's avatar - avatar 1766.jpg
                FEMA Region V Camp #21
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                Posted: September 29, 2006, 11:50 pm - IP Logged

                Today I chose the cash option for yesterdays $13.00 hit in D.C. Rolling Cash, it was a tough decision but I took it and re-invested for this evenings play and won $2.00 for a loss of $11.00!  Shoulda gone with the annuity.  LOL jarasan Crying

                HA!  Good one!

                Posted 4/6:  IL Pick 3 midday and evening until they hit:  555, 347 (str8).


                  justxploring's avatar - villiarna
                  Wandering Aimlessly
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                  Posted: September 30, 2006, 1:16 am - IP Logged

                  Floridian, you took the "age" comment completely wrong!  An annuity is often a good way to protect yourself from losing everything should you become ill.  However, if someone continues to receive payments as income from a lottery, I don't think that money is protected because it is income. You are actually receiving the interest only on an investment.  Someone over 70 might want to contact an attorney to make sure Long Term Care and other important issues are addressed.  Also, when you die if you leave more than $2 million to your family they have a huge tax burden. Keep in mind that in 1988 she had no choice. Florida did not offer a lump sum. Also back then the annuity was for only 20 years, not 30. 

                  I've seen Ms Ryan's picture and heard her story many times. Just a trip to the FL web site and there's a big picture of her in the winner's section. Yes, she was certainly a generous person and died only a few years after she won. She made a big difference in the world. Like you wrote, she won a lot of money, so that is a consideration too. 

                  It's definitely a great story, like Rick said. So I don't want to sound like the naysayer here, but I've also seen plenty of poor people living in RVs give their last dime until payday to a neighbor for a meal. Ms Ryan was a retired real estate broker who was comfortable and lived in a mobile home. She wasn't married and never had any children. I doubt I'd change much either, except I'd buy a house and a new car. We have no idea if she bought a big home or went on a lot of cruises either.  But I have a neighbor who has 5 children, 14 grandchildren and a few great grandchildren. He might have a different plan if he wins the lottery like college trusts and other family matters. Still, being the center of all the attention wasn't all rosy for Sheelah.  From a 2003 article:

                  But Ryan's good fortune had a dark side, her former attorney, Evelyn Cloninger. A stranger once followed her into the post office asking for money. Another jumped over the security fence of her home to beg for assistance. She was inundated with thousands of letters and phone calls asking her for help. Toward the end of her life, she grew suspicious of people.

                  On a personal note, I think the media loves to show rich people giving away money.  It was a very long time ago, but sometimes a TV show stays in your head. I remember Martin Sheen appearing on The Tonight Show and Johnny praising him for giving his $6M paycheck from Apocalypse Now to the homeless. He looked at Carson and said something like "I have a mansion in Malibu, luxury cars and a big boat. Don't get me wrong. I still love my material possessions." (this is not a quote..just remember the general message.)  Florida uses Sheelah Ryan as a model.  In 2003 the jackpot had rolled over many times to $75 million and this was one headline followed by her story: 

                  Florida charities, facing dwindling donations, hope the winner of the $75-million Lotto will care to share.

                  The only reason I am bringing this up is she won 18 years ago and she was and still is the main story on the FL web site.  Her foundation donates approximately $200,000 a year to charities.  Sure that's a wonderful legacy. I'm guessing that many people in Florida donate much more to charities, but the lottery is trying to send a message.

                  Getting back to the main subject, I'm not sure the decision people make is always based on greed. If, like Sheelah, I won over $55 million and took a lump sum of 57% (about average in FL) less taxes I'd have about $21M and I could take "just" $1M and live very well off of it.  A lot depends on what you are starting out with too.  So then I'd have $20M. There are many fairly safe investments that would pay a 7% to 8% annual average over 10 years. (Depending on your age, you should be able to double your money about ever 10 years.)  But even with a modest 7% I could share about $1.5 million annual interest with family & charities and still have my principal when I die and leave $20 million.  Not a bad gift.

                    four4me's avatar - gate1
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                    Posted: September 30, 2006, 1:49 am - IP Logged

                    thanks Rickg for your kind words

                    Everyone there are a more than a few ways to skin the cat so to speak. if you accept the annuity you must remember. It's out of the lotteries hands at that point they buy a bond to secure your winnings. Of course they make money. But so do you. The bond is set up to include any interest changes. And while it's up to you what you do with your checks you can buy insurance to cover medical costs. Take into considerations a trust. Hope that Bush signs the inheritance bill. (YEA RIGHT) and speak with an attorney about any issues you might have make sure you clear up any issues before you sign on the dotted line.

                    While i agree that and older person might benefit by taking cash over an annuity. If the older person has family and they wish to include them in a trust then it's a no brainier the money will go to the designated trust holders.

                    Now most people regardless of whom they are think they can handle big money the fact is unless your a certified accountant or really strong at money management you wouldn't be able to handle a big lump sum without help. You'll be paying thru the nose to hire people to handle your assets. With an annuity you can shop around. Be as flexible as you wish with where you chose to spend your money and since your getting yearly checks. You won't be in a position to spend more than your getting unless you went hog wild and borrowed against your annuity which is the opposite of what it was intended for.

                    No matter which option you choose there is a big responsibility to protect the money unless your intent it to spend the whole caboodle like most reckless winners do.

                      justxploring's avatar - villiarna
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                      Posted: September 30, 2006, 3:11 am - IP Logged

                      "there are a more than a few ways to skin the cat so to speak"

                      I hate that expression.  The 2 birds with 1 stone one is pretty bad too, but skinning a cat...makes me shudder.

                        four4me's avatar - gate1
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                        Posted: September 30, 2006, 3:38 am - IP Logged

                        "there are a more than a few ways to skin the cat so to speak"

                        I hate that expression.  The 2 birds with 1 stone one is pretty bad too, but skinning a cat...makes me shudder.

                        depends on what Chinese restaurant you walk by.

                        You know what the term means i hope "there are more ways than one to carve up the lottery winnings."

                        personally i've never seen a skinned cat. seen a few hairless ones though.

                          justxploring's avatar - villiarna
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                          Posted: September 30, 2006, 4:46 am - IP Logged

                          four4me, just because someone doesn't like an expression doesn't mean she doesn't understand it.  If someone told me to go *F* myself, I think I'd get the hint, but it would still bother me. Actually I was only kidding you since, unfortunately, most people use all sorts of expressions like that.  You're obviously not a cat lover. 

                          BTW, most of the Chinese Americans I know have never eaten a cat in their entire lives and have never even thought about it. 

                            floridian's avatar - DiscoBallGlowing

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                            Posted: September 30, 2006, 8:58 am - IP Logged

                            Floridian, you took the "age" comment completely wrong!  An annuity is often a good way to protect yourself from losing everything should you become ill.  However, if someone continues to receive payments as income from a lottery, I don't think that money is protected because it is income. You are actually receiving the interest only on an investment.  Someone over 70 might want to contact an attorney to make sure Long Term Care and other important issues are addressed.  Also, when you die if you leave more than $2 million to your family they have a huge tax burden. Keep in mind that in 1988 she had no choice. Florida did not offer a lump sum. Also back then the annuity was for only 20 years, not 30. 

                            I've seen Ms Ryan's picture and heard her story many times. Just a trip to the FL web site and there's a big picture of her in the winner's section. Yes, she was certainly a generous person and died only a few years after she won. She made a big difference in the world. Like you wrote, she won a lot of money, so that is a consideration too. 

                            It's definitely a great story, like Rick said. So I don't want to sound like the naysayer here, but I've also seen plenty of poor people living in RVs give their last dime until payday to a neighbor for a meal. Ms Ryan was a retired real estate broker who was comfortable and lived in a mobile home. She wasn't married and never had any children. I doubt I'd change much either, except I'd buy a house and a new car. We have no idea if she bought a big home or went on a lot of cruises either.  But I have a neighbor who has 5 children, 14 grandchildren and a few great grandchildren. He might have a different plan if he wins the lottery like college trusts and other family matters. Still, being the center of all the attention wasn't all rosy for Sheelah.  From a 2003 article:

                            But Ryan's good fortune had a dark side, her former attorney, Evelyn Cloninger. A stranger once followed her into the post office asking for money. Another jumped over the security fence of her home to beg for assistance. She was inundated with thousands of letters and phone calls asking her for help. Toward the end of her life, she grew suspicious of people.

                            On a personal note, I think the media loves to show rich people giving away money.  It was a very long time ago, but sometimes a TV show stays in your head. I remember Martin Sheen appearing on The Tonight Show and Johnny praising him for giving his $6M paycheck from Apocalypse Now to the homeless. He looked at Carson and said something like "I have a mansion in Malibu, luxury cars and a big boat. Don't get me wrong. I still love my material possessions." (this is not a quote..just remember the general message.)  Florida uses Sheelah Ryan as a model.  In 2003 the jackpot had rolled over many times to $75 million and this was one headline followed by her story: 

                            Florida charities, facing dwindling donations, hope the winner of the $75-million Lotto will care to share.

                            The only reason I am bringing this up is she won 18 years ago and she was and still is the main story on the FL web site.  Her foundation donates approximately $200,000 a year to charities.  Sure that's a wonderful legacy. I'm guessing that many people in Florida donate much more to charities, but the lottery is trying to send a message.

                            Getting back to the main subject, I'm not sure the decision people make is always based on greed. If, like Sheelah, I won over $55 million and took a lump sum of 57% (about average in FL) less taxes I'd have about $21M and I could take "just" $1M and live very well off of it.  A lot depends on what you are starting out with too.  So then I'd have $20M. There are many fairly safe investments that would pay a 7% to 8% annual average over 10 years. (Depending on your age, you should be able to double your money about ever 10 years.)  But even with a modest 7% I could share about $1.5 million annual interest with family & charities and still have my principal when I die and leave $20 million.  Not a bad gift.

                            I just love to read your posts.  This one is very good and brings home several excellent points.  I think everything you said makes good sense.  You are correct when you indicated that the Lottery is showcasing Sheelah Ryan because that is all they really have that stands out.  However, she did do some good.

                            You are also correct in pointing out that people who win big have many new problems and trouble they did not have before.  So many people pulling at you for a hand out.  What a bummer!

                            Maybe that is the trouble with winning too much, I guess you are destined to suffer.  However, some winners have left the country to get some peace.  This is a drastic step but may be the proper way to handle the problems that come with instant wealth.

                            I am old enough to remember a quote from a old actor named Jack Webb.  The quote has stuck with me all these years.  Many may remember him from the old Dragnet police series of many, many years ago.  (I am really dating myself here) but Mr. Webb became extremely wealthy producing, directing and starring in that series and several others.  When I say wealthy, I mean extremely well off as if you or I had won several jackpots.  Anyway, Mr. Webb was being interviewed about spending money and remarked "You can only buy so many silver cigarette lighters and then you have to start doing something for someone else." He did do something for many someone elses with very little fanfare.

                            As I say all this I am also aware of some folks (who will remain nameless) that love the attention that winning brings.  Talk about 15 minutes of fame, wow! these people have turned it into years and never get tired of the attention.  In fact, they thrive on it.   

                            In any case, I do not believe I will have that problem in the foreseeable future and that may be a good thing.

                            Perhaps we should start a new topic to discuss if money is truly the root of all evil.

                            Keep up the great posts!

                            Floridian

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                              Posted: September 30, 2006, 10:24 am - IP Logged


                              floridian

                              If you're refering to the Bible saying, it's not "'money is the root of all evil", it's "the love of money is the root of all evil". Some translations say "the desire for..."

                              But yeah, it would be a good topic.