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Topic closed. 29 replies. Last post 9 years ago by KY Floyd.

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mn
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Posted: March 6, 2008, 9:39 am - IP Logged

You guys say you will take cash option over annuity but never explain the reason, why is that?

Cash option makes no sense, you get half the jackpot.

Annuities are the logical choice.


 

"Gee Brain, what do you want to do tonight?"

"The same thing we do every night, Pinky—Try to take over the world."

    Uff Da!'s avatar - InCelebration 001.jpg
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    Posted: March 6, 2008, 10:02 am - IP Logged

    I suggest you do a Google search on "time value of money."  It is a basic financial concept.

    Also be aware that the IRS expects that in the event of a person's death that estate taxes be paid within nine months.  If money is tied up in annuities, the executor may not have enough cash in the estate to pay the taxes.   Depending upon how a jackpot winner has arranged his estate and to whom he leaves it, the estate taxes might be millions of dollars.  Sometimes there are ways around this, but it depends upon the state laws and there are often many unknowns - until the death when it is too late to make changes in the way things are arranged legally.  Thus, it is common for financial consultants to recommend cash option over annuity, especially for older clients where risk of death in the early years of the annuity is higher.

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      Harbinger
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      Posted: March 6, 2008, 10:04 am - IP Logged
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        mn
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        Posted: March 6, 2008, 10:07 am - IP Logged

        they didnt explain they just said what they would do with money


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          Posted: March 6, 2008, 10:21 am - IP Logged

          I'll gladly take half of anything that has the word "Million" in it...lol

          I'm no spring chicken, so I want all half of it right now !

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            mn
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            Posted: March 6, 2008, 10:28 am - IP Logged

            I'll gladly take half of anything that has the word "Million" in it...lol

            I'm no spring chicken, so I want all half of it right now !

            Ridiculous nobody would do that, you win 200 mil in powerball, cash option near 80 after tax 

              Uff Da!'s avatar - InCelebration 001.jpg
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              Posted: March 6, 2008, 10:35 am - IP Logged

              they didnt explain they just said what they would do with money

              I repeat, "I suggest you do a Google search on 'time value of money.'  It is a basic financial concept."  If you don't use Google, use another search engine.  But search the whole web on the concept, not just this website.  I know you are anxious to get to the specific "cash versus annuity" point, but IMO you'd be better off drawing your own conclusions after you get some more basic financial knowledge behind you. 

              And if you really want to understand, don't just read what it says on one or two websites.  Find some compound interest tables and see what you'd come up with by investing your cash option amount at various interest rates for a period as long as the annuity.  Then make allowance for the effects of income taxes.

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                mn
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                Posted: March 6, 2008, 10:43 am - IP Logged

                I repeat, "I suggest you do a Google search on 'time value of money.'  It is a basic financial concept."  If you don't use Google, use another search engine.  But search the whole web on the concept, not just this website.  I know you are anxious to get to the specific "cash versus annuity" point, but IMO you'd be better off drawing your own conclusions after you get some more basic financial knowledge behind you. 

                And if you really want to understand, don't just read what it says on one or two websites.  Find some compound interest tables and see what you'd come up with by investing your cash option amount at various interest rates for a period as long as the annuity.  Then make allowance for the effects of income taxes.

                ok man I see that were not going anywhere beyound technicalities, so ill just say this

                                                                              -I JUST WANT YOUR OPINION- 

                 

                i know the technicalities, believe me ive done my research

                  Uff Da!'s avatar - InCelebration 001.jpg
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                  Posted: March 6, 2008, 11:11 am - IP Logged

                  Rubberbandman, I taught personal finance for years, and from your questions and comments it is apparent to me that you do not have some of the basic understandings of finance.  No, you haven't done your research. 

                  You stated, "Cash option makes no sense, you get half the jackpot" and "Annuities are the logical choice."  You called pacattack's comments ridiculous.  So why do you ask for our opinions?   Your mind is already made up, it seems.  So what would you do with our opinions?

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                    Harbinger
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                    Posted: March 6, 2008, 11:11 am - IP Logged

                    they didnt explain they just said what they would do with money

                    There are dozens upon dozens of threads you need to read thru them and you'll find what you seek.

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                      mn
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                      Posted: March 6, 2008, 11:12 am - IP Logged

                      thanks, i guess

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                        Chief Bottle Washer
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                        Posted: March 6, 2008, 11:37 am - IP Logged

                        There are dozens upon dozens of threads you need to read thru them and you'll find what you seek.

                        I Agree!  Debated and explained many times in great detail. If you have something to add, definitely do so, but read-up on past discussions first!

                         

                        Check the State Lottery Report Card
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                          Posted: March 6, 2008, 12:09 pm - IP Logged

                          You guys say you will take cash option over annuity but never explain the reason, why is that?

                          Cash option makes no sense, you get half the jackpot.

                          Annuities are the logical choice.


                           

                          "Gee Brain, what do you want to do tonight?"

                          "The same thing we do every night, Pinky—Try to take over the world."

                          Cash option makes no sense, you get half the jackpot.

                          Half the jackpot? We have yet another person who thinks that the annuity is calculated first which then determines the cash value. THAT'S NOT HOW IT IS! They take the amount of cash and spread it over 29 years and 30 payments including the interest which determines the annuity! So using "you get half the jackpot" holds no credibility.

                          Gonna win.Big Smile

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                            Posted: March 6, 2008, 12:16 pm - IP Logged

                            How people decide to cash in the "jackpot" is their business. I think these kinds of questions are silly.Crazy You have to win the jackpot first before you decide ANYTHING! Do you know how hard a task that is in itself? Don't worry about how people decide to take their winnings! My God,we all wish we could have this problem!

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                              Zeta Reticuli Star System
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                              Posted: March 6, 2008, 1:18 pm - IP Logged

                              You guys say you will take cash option over annuity but never explain the reason, why is that?

                              Cash option makes no sense, you get half the jackpot.

                              Annuities are the logical choice.


                               

                              "Gee Brain, what do you want to do tonight?"

                              "The same thing we do every night, Pinky—Try to take over the world."

                              For you they might be, but not for everyone.

                              One major factor in such a choice is a person's age, or in the world according to rubberbandman is someone up there in their years that hits a jackpopt suppossed to choose a 26 to 30 year annuity because, hey, that's what the rubberbandman said. 

                              I guess you've ignored all the posts about the amount being advertised in the annuity being non-existent.

                              Both choices have advantages, and disadvantages. It's a person by person choice, there is no logical choice until you know a person's situation.

                              Those who run the lotteries love it when players look for consistency in something that's designed not to have any.

                              Lep

                              There is one and only one 'proven' system, and that is to book the action. No matter the game, let the players pick their own losers.