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Cash Vs Annuity Payments

Topic closed. 98 replies. Last post 5 years ago by rdgrnr.

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well..... Would you rather take the payments or the cash option?..feel free to explain why....

Annuity Payments [ 13 ]  [15.12%]
Cash Option [ 73 ]  [84.88%]
Total Valid Votes [ 86 ]  
Discarded Votes [ 2 ]  

United States
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February 20, 2012
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Posted: February 27, 2012, 1:08 pm - IP Logged

also consider the new york lottery 35 million dollar jackpot...if i wait 20 years to get that money...how am i gonna buy 1,000,000 of power ball tickets when the jackpot hits 10 billion?????

a bird in hand is worth 3 in the bush....

    Colt45ML's avatar - 4eyes
    Jawja
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    Posted: March 20, 2012, 3:44 pm - IP Logged

    The way the economy is right now were a lot states are struggling to pay the most necessary service like police, firefighters etc

    who is to say you will get your payment for the next 30 years

    I would rather take the cash payout and invest my money the way I wantDance

    This would be my most basic rational for taking the cash option.

    Be sassy and be happy.

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      New Member

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      Posted: March 20, 2012, 6:05 pm - IP Logged

      This is my first post here and I joined just to get comments on my supposition.

      So here goes.

      In my state, there is a 7% state tax on lottery winnings.

      If I won the top prize tonight and chose the annuity, could I not pay the 7% on the 1st year's annuity payment

      AND THEN move to Wyoming or Nevada or Florida where there is NO state income tax and receive the rest of the

      annuity payments free of state tax for the next 25 years?

      It would mean millions of extra dollars.

      Also I think winner's annuities are transferred to a 3rd party for safekeeping, free of the states or the lottery company

      dying or going bankrupt or whatever, giving someone who chose the annuity a good amount of security and hope to

      receive all the payments over time, short of full scale nuclear war or an asteroid strike.

      Anyway my main thought is on the whole getting tons more cash via the annuity by moving to an income tax free state.

      What do you guys think?  Am I wrong?

        maximumfun's avatar - Lottery-030.jpg
        Lavender Rocket

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        Posted: March 20, 2012, 6:16 pm - IP Logged

        This is my first post here and I joined just to get comments on my supposition.

        So here goes.

        In my state, there is a 7% state tax on lottery winnings.

        If I won the top prize tonight and chose the annuity, could I not pay the 7% on the 1st year's annuity payment

        AND THEN move to Wyoming or Nevada or Florida where there is NO state income tax and receive the rest of the

        annuity payments free of state tax for the next 25 years?

        It would mean millions of extra dollars.

        Also I think winner's annuities are transferred to a 3rd party for safekeeping, free of the states or the lottery company

        dying or going bankrupt or whatever, giving someone who chose the annuity a good amount of security and hope to

        receive all the payments over time, short of full scale nuclear war or an asteroid strike.

        Anyway my main thought is on the whole getting tons more cash via the annuity by moving to an income tax free state.

        What do you guys think?  Am I wrong?

        hi Katy - I'm new too and probably not the best person to respond... but never fear, there is a huge contingency of peeps who will chime in who are much smarter than I.  Your annuity WILL be state taxed based upon 2 things.  1.  the state you purchased your ticket IN will get the first shot, then the state you LIVE IN will get the 2nd shot.  Ex.  each year, prior to disbursing the proceeds for the year, the state you won the lottery in will w/h 25% fed and whatever % state tax your state has, I live in RI so my state would w/o 25% fed and 7% state.  If I moved to MA who would tax my annuity at 5%, i do NOT get the 2% difference back (never get back what is initially w/h via state), BUT if i bought it in MA they would have w/h 25% fed, and 5% state and then i would owe the difference (7-5) or 2% to RI as I would get a credit for the taxes I paid to MA.

        there... that should confuse things nicely. 

        and welcome again!

          JB434's avatar - Lottery-029.jpg
          New Member
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          Posted: March 20, 2012, 7:36 pm - IP Logged

          We get new members everyday who might like to discuss it and vote on it too, Jack.

          I have read this forum since 2008, and never felt the need to really join and comment. I agree, some may want to discuss it, but shouldn't they use the search button first to eliminate the constant renewal for these threads?

           

          <Goes back to lurking for another few years>

            haymaker's avatar - Lottery-012.jpg
            Egg Harbor twp.south Jersey shore
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            Posted: March 20, 2012, 7:50 pm - IP Logged

            I have read this forum since 2008, and never felt the need to really join and comment. I agree, some may want to discuss it, but shouldn't they use the search button first to eliminate the constant renewal for these threads?

             

            <Goes back to lurking for another few years>

            welcome to LP

             I think the site likes to get fresh threads, read somewhere on here that threads are not supposed to live forever,

            in a way its like starting a conversation on the same subject at a new party,

             even if some of the party guests were at the old party.

            don't go back to lurking, stick around at the party.

            Extraordinary Popular Delusions & the Madness of Crowds    -- Charles Mackay  LL.D.

              JB434's avatar - Lottery-029.jpg
              New Member
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              Posted: March 20, 2012, 8:01 pm - IP Logged

              Thanks,

               

              I do not normally post to a lot of forums, but since I have registered I will post from time to time.

               

              True, fresh threads are always better than a resurrected old thread. (Or resurrected old post, like I did with rdgrnr.)

               

              I guess for my own reply to the thread on-topic, I will be taking the cash option after the drawing tonight. I can live happily and invest wisely. I prefer having control over my own funds, rather than a life insurance portfolio manager overseeing government treasuries for the annuity portfolio at the state lotto.

               

              -J

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                Posted: March 20, 2012, 8:30 pm - IP Logged

                In light of the info maximumfun provided, say I take the cash value, roughly $120,000,000 dollars.

                Does it get transferred via electronic funds to bank accounts I open? Cashier's Checks?

                In a time of untrusted banks, with FDIC insurance of $250,000 usd per account, btw, I am single.

                So best case scenario I open 5 bank and brokerage accounts each one has 2.4 million USD in it with

                only $250,000 usd FDIC insurance.

                Titilating and scary at the same time.

                Thanks to maximumfun for the fast reply earlier and good information.

                  JB434's avatar - Lottery-029.jpg
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                  Posted: March 20, 2012, 8:39 pm - IP Logged

                  Your choice in a cashier's check, or a wire transfer. I personally would recommend the wire, it'll hit within a few hours and will not be subject to holds for a verification of funds, where as under Check 21 even a cashier's check is subject to a 3 day hold.

                   

                  You can get a standard account with FDIC insurance upto $250,000; and high-yield investment savings accounts protected by SIPC with protection upto $500,000 on top of that. But for the most part, you are well protected if you bank with a firm which has a decent balance sheet. Banks are insured beyond FDIC/SIPC and in the event of a robbery or failure you are typically protected.

                   

                  If you can not trust that, then your best bet is to buy precious metals (Gold, Platinum, or Palladium) and store them in a secure depository until you can make a decision on an investment advisor.

                    rdgrnr's avatar - walt
                    Way back up in them dadgum hills, son!
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                    Posted: March 20, 2012, 11:38 pm - IP Logged

                    I have read this forum since 2008, and never felt the need to really join and comment. I agree, some may want to discuss it, but shouldn't they use the search button first to eliminate the constant renewal for these threads?

                     

                    <Goes back to lurking for another few years>

                    Hey JB, welcome to the Forums, it's about time.

                    I can only give my opinion and that is if everybody, on every occasion, used search to get answers for any and every topic you can imagine that's been discussed here - there would probably be a lot fewer posts, cuz anything and everything lottery related has probably already been discussed here multiple times.

                    And though the answers to most questions you can conceive can usually be found with the Search Feature, people still like to give their opinions on things that are interesting no matter how many times they've been addressed. And the rest of us like to read their opinions and frequently learn something from them.

                    Except for me.

                    I'm an Oracle.

                     

                    Welcome JB and Best of Luck to ya! LepYes NodThumbs Up


                                                                 
                                         
                                                             

                     

                     

                     

                     

                                                                                                                       

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

                                                                                                                --Edmund Burke

                     

                     

                      dallascowboyfan's avatar - tiana the-princess-and-the-frog.jpg
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                      Posted: March 24, 2012, 11:22 pm - IP Logged

                      Your choice in a cashier's check, or a wire transfer. I personally would recommend the wire, it'll hit within a few hours and will not be subject to holds for a verification of funds, where as under Check 21 even a cashier's check is subject to a 3 day hold.

                       

                      You can get a standard account with FDIC insurance upto $250,000; and high-yield investment savings accounts protected by SIPC with protection upto $500,000 on top of that. But for the most part, you are well protected if you bank with a firm which has a decent balance sheet. Banks are insured beyond FDIC/SIPC and in the event of a robbery or failure you are typically protected.

                       

                      If you can not trust that, then your best bet is to buy precious metals (Gold, Platinum, or Palladium) and store them in a secure depository until you can make a decision on an investment advisor.

                      Welcome to the LP JB434......Thumbs Up

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                        Bronx, NY
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                        Posted: March 25, 2012, 12:34 am - IP Logged

                        Wow.  I always said that if I hit the lottery before I turn 30 (I'm 25) I would take the annuity.  Not that I'm bad with money or anything.  My dad actually calls me a cheap <snip>....lol.  I think I'm just more "frugal" than cheap.Smash But I just like the idea of no matter what I do with x amount of annuity money, I will have another check coming in a year. Plus, I think I got caught up in the fact that the advertized annuity sum (after the 26 + years) is always signifcantly more than the cash option sum.  But obviously there is a lot more to that.  Anyway, after reading posts about how the lottery/government could at some point withhold your payments due to some economic disaster or whatever the case is, I think I would feel more comfortable taking the cash option. I don't really care about how likely it really is to happen, just the idea of it alone is enough for me to change my mind.    In this country, ANYTHING can happen and if Bush could sign away my rights as an American citizen under the guise of "protecting America" then surely the next crooked president could find a way to sign away my money. 

                         

                        This post has been automatically changed by the Lottery Post computer system to remove inappropriate content and/or spam.

                          mediabrat's avatar - 18z0typ
                          upstate NY
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                          Posted: March 25, 2012, 3:13 am - IP Logged

                          Wow.  I always said that if I hit the lottery before I turn 30 (I'm 25) I would take the annuity.  Not that I'm bad with money or anything.  My dad actually calls me a cheap <snip>....lol.  I think I'm just more "frugal" than cheap.Smash But I just like the idea of no matter what I do with x amount of annuity money, I will have another check coming in a year. Plus, I think I got caught up in the fact that the advertized annuity sum (after the 26 + years) is always signifcantly more than the cash option sum.  But obviously there is a lot more to that.  Anyway, after reading posts about how the lottery/government could at some point withhold your payments due to some economic disaster or whatever the case is, I think I would feel more comfortable taking the cash option. I don't really care about how likely it really is to happen, just the idea of it alone is enough for me to change my mind.    In this country, ANYTHING can happen and if Bush could sign away my rights as an American citizen under the guise of "protecting America" then surely the next crooked president could find a way to sign away my money. 

                           

                          This post has been automatically changed by the Lottery Post computer system to remove inappropriate content and/or spam.

                          "Anyway, after reading posts about how the lottery/government could at some point withhold your payments due to some economic disaster or whatever the case is, I think I would feel more comfortable taking the cash option."

                          Don't you worry about that.  It's nothing but a load of unfounded paranoia.  Besides, if it ever does come to that, it's quite likely your money would be worthless no matter where you had it.

                          Patriot

                            rdgrnr's avatar - walt
                            Way back up in them dadgum hills, son!
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                            Posted: March 25, 2012, 12:21 pm - IP Logged

                            "Anyway, after reading posts about how the lottery/government could at some point withhold your payments due to some economic disaster or whatever the case is, I think I would feel more comfortable taking the cash option."

                            Don't you worry about that.  It's nothing but a load of unfounded paranoia.  Besides, if it ever does come to that, it's quite likely your money would be worthless no matter where you had it.

                            "Don't you worry about that."    LOL

                            Yeah, right. That's what they said for years in Greece.

                            Just keep spending, we'll never go broke.


                                                                         
                                                 
                                                                     

                             

                             

                             

                             

                                                                                                                               

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

                                                                                                                        --Edmund Burke

                             

                             

                              maximumfun's avatar - Lottery-030.jpg
                              Lavender Rocket

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                              Posted: March 25, 2012, 2:40 pm - IP Logged

                              "Don't you worry about that."    LOL

                              Yeah, right. That's what they said for years in Greece.

                              Just keep spending, we'll never go broke.

                              I Agree!  Fiscal responsibility should not be optional.  It's no wonder that corporations as well as individuals are having such trouble overspending, maintaining any semblance of a budget, and living life beyond their means... one big example is our own government.  No good comes from continual and unrestrained debt.