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Does anybody else disagree with graduated annuities?

Topic closed. 8 replies. Last post 7 years ago by JAP69.

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Lucky4Life's avatar - batman14

United States
Member #85037
January 7, 2010
252 Posts
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Posted: January 23, 2010, 8:30 am - IP Logged

I can understand the logic behind graduated annuities.  For example, PB goes up in payments 4% every year.  But if you invest wisely you don't NEED the cost of living adjustment!! I would need most of it the first year, not the least of it.  I would be paying off things and enjoying my new life.  I know it's pretty much a pointless argument, but if I have invested at least 10% in 30-year municiple bonds I will be sitting pretty by the time my annunity runs out.  Logic dictates at the end of 30 years you would own everything you have and your only living expenses would be utillities and groceries...

    Jack-C's avatar - us
    San Diego, CA
    United States
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    May 24, 2008
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    Posted: January 23, 2010, 8:50 am - IP Logged

    This has been discussed many times here on LP.

    Here is one of the discussions:

    http://www.lotterypost.com/thread/199002/1384289

    What I have observed in the past is that most people, including me, think that the cash value is the way to go.  Even some people that thought they wanted yearly payments changed their minds after some discussion.

      rdgrnr's avatar - walt
      Way back up in them dadgum hills, son!
      United States
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      April 28, 2009
      14903 Posts
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      Posted: January 23, 2010, 8:56 am - IP Logged

      Any government agency is the last place on earth I would trust with the future of my money. I'll take the cash option and buy everything I need right away before the dollar loses any more value. I'd trade a big chunk for precious metals, get off the grid and prepare to hunker down in case the current government succeeds in destroying the currency and the country before we can vote them out. No way I'd take an annuity in the current environment. It could be worthless in short order.

      Things have been looking up in recent elections as people wake up but until the job is done I would stay on the safe side.


                                                   
                           
                                               

       

       

       

       

                                                                                                         

      "The only thing necessary for evil to triumph is for good men to do nothing"

                                                                                                  --Edmund Burke

       

       

        Lucky4Life's avatar - batman14

        United States
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        January 7, 2010
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        Posted: January 23, 2010, 9:17 am - IP Logged

        This has been discussed many times here on LP.

        Here is one of the discussions:

        http://www.lotterypost.com/thread/199002/1384289

        What I have observed in the past is that most people, including me, think that the cash value is the way to go.  Even some people that thought they wanted yearly payments changed their minds after some discussion.

        Maybe my statement wasn't clear.  The annuity itself isn't an issue, i would take it.  The system of payment of the annuity is my issue.

         

        Thanks for the link, though.

          Raven62's avatar - binary
          New Jersey
          United States
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          June 28, 2005
          49725 Posts
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          Posted: January 23, 2010, 9:50 am - IP Logged

          Maybe my statement wasn't clear.  The annuity itself isn't an issue, i would take it.  The system of payment of the annuity is my issue.

           

          Thanks for the link, though.

          Are you going to do something about your concern?

          A mind once stretched by a new idea never returns to its original dimensions!

            Avatar
            NY
            United States
            Member #23835
            October 16, 2005
            3474 Posts
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            Posted: January 23, 2010, 12:04 pm - IP Logged

            The real reason for graduated annuities is to increase the advertised value of an imaginary jackpot even more.

            In terms of practicality to the rare winners that take the annuity, I figure they're looking for a steady and predictable income. If the cost of living goes up every year (and it almost always does), it makes sense  for your income to go up by at least that much so that you don't lose any ground. Sure, most of us carry some amount of debt and most of us could think of  a way to splurge initially, but it's pretty unusual that a lottery win that's offered as an annuity isn't significant enough to make a real difference in your finances. Winning a graduated annuity may not let you pay cash for a huge house and a Ferrari or Lambo, but it will let you pay off your existing debts faster and still upgrade.

              Coin Toss's avatar - shape barbed.jpg
              Zeta Reticuli Star System
              United States
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              January 17, 2006
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              Posted: January 23, 2010, 3:36 pm - IP Logged

              Lucky4Life,

              I'm sorry I don;t remember who but someone here on LP has or had a signature,

              "You can always buy a better annuity".

              Pretty good observation, really. Let's face it, the lottery isn;t really going to compairson shop the annuity for a jackpot winner that chooses to go that route.

              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.

                LadyMylena's avatar - avatar6 1.jpg
                Kansas
                United States
                Member #83963
                December 19, 2009
                347 Posts
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                Posted: January 23, 2010, 5:30 pm - IP Logged

                Any government agency is the last place on earth I would trust with the future of my money. I'll take the cash option and buy everything I need right away before the dollar loses any more value. I'd trade a big chunk for precious metals, get off the grid and prepare to hunker down in case the current government succeeds in destroying the currency and the country before we can vote them out. No way I'd take an annuity in the current environment. It could be worthless in short order.

                Things have been looking up in recent elections as people wake up but until the job is done I would stay on the safe side.

                You took the words right out of my mouth, just like always. lol

                Well, there's always the chance, too, that the dollar crashes, all of our states go bankrupt, and the lottery gets suspended. Our unemployment funds are almost depleted http://projects.propublica.org/unemployment/, and how long do you think it's going to take, for everything else to be in the same boat? 

                I hope to God I win before that happens. 

                I used to always say I'd take the annuity, and that way I'd be set for life...but that was years ago. If things get better someday, I might change my mind. Wink

                Luck is  ** believing  ** you're lucky.” ~Tennessee Williams

                Money is neither my god nor my devil. It is a form of energy that tends to make us more of who we already are, whether it's greedy or loving.  ~ Dan Millman


                  JAP69's avatar - alas
                  South Carolina
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                  Posted: January 23, 2010, 5:37 pm - IP Logged

                  You might want to check on inheritance taxation with that kind of money. I understand it has been stopped for 2010 on inheritance tax. Might kick back in in 2011.

                  From what I read the tax is pretty stiff. 50% or better I heard.

                  MAGA