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Question about Lump Sum or Annuity

Topic closed. 16 replies. Last post 5 years ago by GHolnyuk.

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New Member
Sierra Vista, Arizona
United States
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March 27, 2012
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Posted: May 12, 2012, 5:26 am - IP Logged

Hello my name is usbp456 and Im new to the forum.  Well new to posting but I have been reading several threads and read Lottery Post and USA Mega often.  Anyways I know this question might have been asked a billion times before on here or other places.

But my questions is about smaller jackpots and NOT the multi-millions that the Powerball or MM offers.

One of the Arizona scratch off games have a $1 million prize.  The lottery offers the following two options:

1. Choose an annuity of $50,000 a year for 20 years for a total of $1 million

or

2. $625,000 one-time cash option

In this case which would be the best option? For a 50 year old? 30 year old? 20 year old?

 

For me being 21 years old, I think I would choose the annuity because I do have the time to wait the 20 years to get all the money and still continue working (atleast part time).

 

What would you guys do?

    Nikkicute's avatar - nnjx1k
    Wisconsin
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    February 17, 2012
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    Posted: May 12, 2012, 11:05 am - IP Logged

    Being younger you can spread it out years if you want,

    older players most times take the lump sum and run!

    Good LuckSmiley

      Coin Toss's avatar - shape barbed.jpg
      Zeta Reticuli Star System
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      Posted: May 12, 2012, 11:05 am - IP Logged

      Regardless of anyone's current age, 20 years down the road what is that $50,000 a year going to be worth?

      And of course, you'd have to actually get a winning ticket first.

      Wink

      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.

        Jack-C's avatar - us
        San Diego, CA
        United States
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        May 24, 2008
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        Posted: May 12, 2012, 11:09 am - IP Logged

        Age has nothing to do with it.  Always choose the cash option.  You can do better with the cash than the state can do!! 


          United States
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          September 7, 2011
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          Posted: May 12, 2012, 11:21 am - IP Logged

          Age has nothing to do with it.  Always choose the cash option.  You can do better with the cash than the state can do!! 

          Very true in a mathematical sense. $1 mill will return $50k per year @ 5%. So theoretically you would recoup the $400,000 they are stealing from you in 8 years.

          IN REALITY??? You will likely take the annuity, call JG Wentworth and end up with a lot less than $600k

          OH YA, you wont even have that problem cuz you dont have a winning ticket. Or do you? Please post it so we cal drool over it. lol.


            United States
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            Posted: May 12, 2012, 11:36 am - IP Logged

            Hello my name is usbp456 and Im new to the forum.  Well new to posting but I have been reading several threads and read Lottery Post and USA Mega often.  Anyways I know this question might have been asked a billion times before on here or other places.

            But my questions is about smaller jackpots and NOT the multi-millions that the Powerball or MM offers.

            One of the Arizona scratch off games have a $1 million prize.  The lottery offers the following two options:

            1. Choose an annuity of $50,000 a year for 20 years for a total of $1 million

            or

            2. $625,000 one-time cash option

            In this case which would be the best option? For a 50 year old? 30 year old? 20 year old?

             

            For me being 21 years old, I think I would choose the annuity because I do have the time to wait the 20 years to get all the money and still continue working (atleast part time).

             

            What would you guys do?

            fyi uspsbs, there is NO scratcher game in AZ that pays $1 mill. The highest is $500k on the $20. games.

            The million $ raffle game paid a mill and was drawn back in Jan. but thats NOT a scratcher. They sell 300,000 tickets @ $20. each and give ONE person a million. Sounds about right that they would steal $400,000 before paying.


              United States
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              Posted: May 12, 2012, 11:54 am - IP Logged

              fyi uspsbs, there is NO scratcher game in AZ that pays $1 mill. The highest is $500k on the $20. games.

              The million $ raffle game paid a mill and was drawn back in Jan. but thats NOT a scratcher. They sell 300,000 tickets @ $20. each and give ONE person a million. Sounds about right that they would steal $400,000 before paying.

              There is truly a $625k prize on a $10 game but I dont even consider it a game as the odds are 12 million to 1 for each dollar spent as apposed to 4.8 million to 1 for each dollar spent on the $500k prize in the $20. game.

              Its almost like they are probing the public to find the height of their stupidity.

              Even the $1 million Raffle is only a 6 million to $1 long shot which is 1/2 the odds of getting the $625k.

                SaintAndiesPl's avatar - animal butterfly.jpg
                Yonkers, NY
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                Posted: May 12, 2012, 7:16 pm - IP Logged

                I think anyone any age should take the cash option.. Lets just say you win  and you choose annuity.. and then die.. No one in your family will have the money because the payments will end.. But if you take lump sum and then die..it's in your personal  account and the person you have down to claim after you die gets it..   which most likely be a family member..  know it's a stretch lol.. but yes, I think about those things lol...Leaving

                It Takes More Than a Dollar and a Dream :)

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                  Posted: May 12, 2012, 8:43 pm - IP Logged

                  Being 21, you will travel alot, increasing your chances of a car or airplane crash and death. Then, if having chosen annuity, your heirs get zilch.

                  However, I figure if PB and MM are high enough, I play to win jackpot, so that's what I want... not %60-%70 of it - taxes.

                  Lottery is lying to the masses when they post $80m jp as winner gets %60 cash value.$80m/30=$2.66m yearly. I got no prob paying taxes every year, and collecting my %3-%5 interest rate or investment profits.

                  However, getting $50m cash is risky as %25 of winners lose all winnings in 10 years.

                    mediabrat's avatar - 18z0typ
                    upstate NY
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                    Posted: May 12, 2012, 9:40 pm - IP Logged

                    I think anyone any age should take the cash option.. Lets just say you win  and you choose annuity.. and then die.. No one in your family will have the money because the payments will end.. But if you take lump sum and then die..it's in your personal  account and the person you have down to claim after you die gets it..   which most likely be a family member..  know it's a stretch lol.. but yes, I think about those things lol...Leaving

                    Incorrect.  If you die before the lottery finishes paying your annuity, your estate collects the remainder.  I've seen elsewhere on this forum that it's paid out all at once as opposed to continuing the annual payments, though.

                      weshar75's avatar - Lottery-042.jpg
                      Mcminnville, Oregon
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                      Posted: May 13, 2012, 12:37 am - IP Logged

                      Incorrect.  If you die before the lottery finishes paying your annuity, your estate collects the remainder.  I've seen elsewhere on this forum that it's paid out all at once as opposed to continuing the annual payments, though.

                      In the FAQ section at powerball website they have this same question asked and they will sell the annuity for the winner's estate at no charge.  So the estate gets a lump sum check to pay the estate taxes and then divide it however the estate wants.  I would think it is the same for mega millions too since they are basically the same game.  But I have not looked it up on the mega millions website.-weshar75

                        weshar75's avatar - Lottery-042.jpg
                        Mcminnville, Oregon
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                        Posted: May 13, 2012, 12:43 am - IP Logged

                        In the FAQ section at powerball website they have this same question asked and they will sell the annuity for the winner's estate at no charge.  So the estate gets a lump sum check to pay the estate taxes and then divide it however the estate wants.  I would think it is the same for mega millions too since they are basically the same game.  But I have not looked it up on the mega millions website.-weshar75

                        On USA MEGA's FAQ section for Mega Millions it says that a designated beneficiaries will get the rest of your installments upon your death and you still have remaining payments.  So you will be able to pass along your money to someone who you choose in both powerball and mega millions.-weshar75

                          Coin Toss's avatar - shape barbed.jpg
                          Zeta Reticuli Star System
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                          Posted: May 13, 2012, 11:58 am - IP Logged

                          GHolnyuk,

                          Depends on who you read of course but I remember one article that said 50% of jackpot winners are worse off five years after winning a jackpot than they were before they won it.

                          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.

                            SaintAndiesPl's avatar - animal butterfly.jpg
                            Yonkers, NY
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                            Posted: May 14, 2012, 8:07 pm - IP Logged

                            Thanks for clearing that up for me weshar and mediabrat.. I always thought that the payments stops.. well that's good to know if I ever win Wink

                            It Takes More Than a Dollar and a Dream :)

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

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                              Posted: May 14, 2012, 10:43 pm - IP Logged

                              welcome to Lottery Post SantAndies -and very good luck to you.