Do you still feel the same about Cash Option or Annuity??Prev TopicNext Topic

• petergrfn

  

  United States
  Member #26,329
  November 16, 2005
  330 Posts
  Offline
  Dec 6, 2008, 1:01 pm

  ▲▼

  I'm asking in the current economic enviroment is your opinion of Cash Vs. Annuity still the same?  I ask this because of the fluctuating stock market and states like California asking for Bailouts. 

   

  My thoughts are I wouldn't trust the state to control my money and dole it out to me.  As a voluntary tax I doubt many tax payers would agree to send Millions of Dollars to a state lottery agency for their debt obligations.    So While you probably would get your money eventually if worse came to worse you might be waiting a long time for your lotto check!   I would choose the cash option personally.   Although I would get a lower amount of money in the short term I would be in control of the money.  I would invest in something very safe like GOLD and wait and see how things pan out in the new year.  On the other hand with the new Priority on "Green" technology that may be a good spot to put some money. Or trying to find alternative fuels...I might invest in Corn futures..might be big money in ethanol! Plus not getting political but Obama has stated he WILL increase taxes on the rich.   If you take an Annuity your payments will get taxed every year.  When Either tax increases are put in place or Bush tax cuts expire you will pay more of your lottery money to the gov't!  I feel taking the Lump Sum now(if you will in 2008) would be a far better plan.  I think you would pay far fewer taxes this year than next and the following years.   (I wonder how hard it would be to start my own Non Profit Group and claim tax exempt status??) LOL .     SORRY if this is too long just had some thoughts my 2 cents.   What's  YOUR opinion?????
• Guru101

  

  Indiana
  United States
  Member #48,723
  January 7, 2007
  1,961 Posts
  Offline
  Dec 6, 2008, 1:25 pm

  ▲▼

  I would take the cash option, but not because I think that if I take the annuity, then I won't get all my money. I think I would.

  Gonna win.
• ThatScaryChick

  

  Idaho
  United States
  Member #56,504
  November 21, 2007
  8,002 Posts
  Offline
  Dec 6, 2008, 3:05 pm

  ▲▼

  I still feel the same as I did before. I would take the cash option.

  "X - youtube - steam - instagram"

  ThatScaryChick
• MaddMike51

  United States
  Member #58,526
  February 18, 2008
  710 Posts
  Offline
  Dec 6, 2008, 4:30 pm

  ▲▼

  Cash option,of course.
• Piaceri

  

  Republic of Texas
  United States
  Member #57,555
  January 9, 2008
  1,095 Posts
  Offline
  Dec 6, 2008, 6:14 pm

  ▲▼

  Actually, the cash option is a smart one right now. Not only because of the likelyhood of an Obama tax increase, but because the cash option is paying 68% of the jackpot. The T-Bill rates have dropped so much that the lottery commission has to put more cash up front to fund the annuity.  And that is what the cash option pays, right? The amount of cash it takes to fund the jackpot annuity. Just last month the cash option was around 60%. 

  My question would be if the T-Bill rates increase between the draw and the time you claim, is the cash option amount likely to change?  Or do they set the cash option on the day the jackpot is won?  That could have a bigger affect on your winnings than if the top tax rate goes from 35% to 39%, making it beneficial to claim the jackpot close to the end of the tax year instead of waiting for the new year.

  

  singlewinnersinglewinnersinglewinner   
  
• Coin Toss

  

  Zeta Reticuli Star System
  United States
  Member #30,469
  January 17, 2006
  11,788 Posts
  Offline
  Dec 6, 2008, 7:33 pm

  ▲▼

  Cash!

  What if the elected administration decides to do something like tax lottery annuities at a higher and higher rate every year? I'm just saying....

  Someone here has or had a sig: You can always buy a better annuity...

  and you'd do that by taking cash!

  Those who run the lotteries love it when players look for consistency in something that's designed not to have any. So many systems, so many theories, so few jackpot winners. 

  

  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.
• KY Floyd

  

  NY
  United States
  Member #23,834
  October 16, 2005
  4,772 Posts
  Offline
  Dec 7, 2008, 3:12 am

  ▲▼

  "if the T-Bill rates increase between the draw and the time you claim, is the cash option amount likely to change?"

  The Ohio lottery website describes the procedures for MM. They apparently buy the govt securities when the cash comes in, and then sell to pay the lump sum. Imagine they buy 100 million worth of bonds paying 2.5% and bonds paying 3% become available before the prize is claimed. Would you pay $100 million for the ones that only pay 2.5%?  Conversely, if rates drop, the value of the bonds will go up.

  IMHO, the real reason not to choose annuity right now is the low rates. If you think that govt securities is the way to go you can buy them with the cash. Unlike the lottery, which has to guarantee a specific payout for the duration of the annuity, you don't need to lock in the current rate for 20 to 30 years. By taking the cash there's a good chance you could spend most of the annuity period safely earning at two to 3 times the rate of the annuity.
• MillionsWanted

  

  Norway
  Member #9,517
  December 10, 2004
  1,904 Posts
  Offline
  Dec 7, 2008, 2:05 pm

  ▲▼

  Considering how many jackpot winners who are broke after only a few years, annuity should be the standard payout.
• Coin Toss

  

  Zeta Reticuli Star System
  United States
  Member #30,469
  January 17, 2006
  11,788 Posts
  Offline
  Dec 7, 2008, 2:28 pm

  ▲▼
  In response to MillionsWanted

  Quote: Originally posted by MillionsWanted on Dec 7, 2008

  Considering how many jackpot winners who are broke after only a few years, annuity should be the standard payout.

  There are companies that look for people with annuities and lure them into selling them, lump sum, for a lot less than they'd get taking the annual payments. Often the people who go for this blow what they do get, and then wish they'd have kept the annuity.

  This should teach us that some people are going to blow it all no matter which option they take.

  Those who run the lotteries love it when players look for consistency in something that's designed not to have any. So many systems, so many theories, so few jackpot winners. 

  

  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.
• L J1

  

  Michigan
  United States
  Member #54,179
  August 8, 2007
  210 Posts
  Offline
  Dec 7, 2008, 6:02 pm

  ▲▼

  1st... I would choose the cash option; just to set everything (investments) in motion. I like the annual pymt; however, for the record on the first time around, cash op. is best. Then as I continue to play different lottery games, such as different states, I then would choose annuities & perhaps a cash op here and there, cause I am vested from the cash option from the first Lottery Game. So, in essance, everything after the the first jackpot win, I have the ability to choose as I please. 

  Balance is Key
• Seachelle

  United States
  Member #67,040
  November 14, 2008
  72 Posts
  Offline
  Dec 7, 2008, 10:52 pm

  ▲▼

  Annuity if I can stay Anon.! so I don't have to deal with those who pops up out of the blue!
• savagegoose

  

  adelaide sa
  Australia
  Member #37,135
  April 11, 2006
  3,341 Posts
  Offline
  Dec 8, 2008, 11:13 am

  ▲▼

  yeah im with lj1, my 1st jackpot im taking the cash, when i win my second jackpot ill go for the annuity. taxes can be paid from y 3rd jackpot, and finnaly  ill have to thing about donating to a church  when my 4th jackpot comes around.

   

  hehe

   

  seriously tho, its cash for me if i get to chose. i didn tthink it would really matter , but with all the financial disasters a few states in usa did have to sue big banks for  the annuities they had invested in , and all that is being paid up noW.  THIS WAS BEFORE  THE BIG COLAPSE

  " Still swinging, still missing "
  2014 = -1016; 2015= -1409; 2016  = -1171; 2017 = -1257 ; 2018 = - 1380 =  TOT =  - 6233

  keno historic = -2291 ; 2015= -603; 2016= -424; 2017 =-427; 2018= -223   TOT = -3968

  :
• JackpotWanna

  

  United States
  Member #4,121
  March 23, 2004
  819 Posts
  Offline
  Dec 8, 2008, 2:34 pm

  ▲▼

  I changed my mind. Before I choose annuity because it will good way to budget my money.   I feel that obama going to raise taxes to pay for the bailout.  Now I will choose cash and move out of the country. Enjoy my life!!!!!!!
• grengrad

  

  Raleigh
  United States
  Member #49,055
  January 17, 2007
  172 Posts
  Offline
  Dec 8, 2008, 3:45 pm

  ▲▼

  Right now is a better time than any in recent history to take the Cash Option.

  Right now you can buy a house. You can buy into the stock market at prices 30-50% off their peak. You can buy foreign currencies at 2002 levels. Even commodities are down!

  We may not be at the bottom right now, but the bottom will occur sometime within the next 6-12 months, which means you would also have plenty of time to do some research and find good investments.

  Some investments will fail, which is why you split your money up into 50 different things.

  This is the best time in the last 10 years to have 100% cash, because their are so many buying opportunities.

   

  Also, right now America is printing money like there is no tomorrow. Inflation will hit, and if you are in an annuity the value of your future earnings will be severely harmed.

  Cash up front to put into investments now, perhaps even a little bit into TIPS (Treasury Inflation-Protected Securities, is much much better than an annuity.

   

  If any of you guys win and need investment advice, I would be happy to help.
• grengrad

  

  Raleigh
  United States
  Member #49,055
  January 17, 2007
  172 Posts
  Offline
  Dec 8, 2008, 3:55 pm

  ▲▼
  In response to petergrfn

  Quote: Originally posted by petergrfn on Dec 6, 2008

  I'm asking in the current economic enviroment is your opinion of Cash Vs. Annuity still the same?  I ask this because of the fluctuating stock market and states like California asking for Bailouts. 

   

  My thoughts are I wouldn't trust the state to control my money and dole it out to me.  As a voluntary tax I doubt many tax payers would agree to send Millions of Dollars to a state lottery agency for their debt obligations.    So While you probably would get your money eventually if worse came to worse you might be waiting a long time for your lotto check!   I would choose the cash option personally.   Although I would get a lower amount of money in the short term I would be in control of the money.  I would invest in something very safe like GOLD and wait and see how things pan out in the new year.  On the other hand with the new Priority on "Green" technology that may be a good spot to put some money. Or trying to find alternative fuels...I might invest in Corn futures..might be big money in ethanol! Plus not getting political but Obama has stated he WILL increase taxes on the rich.   If you take an Annuity your payments will get taxed every year.  When Either tax increases are put in place or Bush tax cuts expire you will pay more of your lottery money to the gov't!  I feel taking the Lump Sum now(if you will in 2008) would be a far better plan.  I think you would pay far fewer taxes this year than next and the following years.   (I wonder how hard it would be to start my own Non Profit Group and claim tax exempt status??) LOL .     SORRY if this is too long just had some thoughts my 2 cents.   What's  YOUR opinion?????

  petergrfn

  I would be very careful investing in Green or Ethanol with how low gas is right now. There is a lot less interest in those projects right now, because of cheep gas. Some of those companies would be a good long-term investment, but many of them do not have enough capital to survive if gas prices stay low for a long time. Also, green companies have already rallied leading up to Obama's election, so they are actually a little overpriced right now.

  Gold is a very good investment if you want to protect against inflation, but like all things it should not make up too much of your portfolio. I personally have 6% of my portfolio in gold.

  Starting your own non-profit would not be very hard, but you would have to use the money for charitable functions, not a Ferrari for your "company car".