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MM going to 30 year annuity

Topic closed. 10 replies. Last post 3 years ago by RJOh.

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Think's avatar - lightbulb
Marquette, MI
United States
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August 20, 2005
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Posted: October 11, 2013, 10:41 pm - IP Logged

Well I just finished reading the back of the new playslip and it says "Jackpot winners will receive their prize in annual payments over a 30 year period....."unless cash option chosen

Geeze I didn't see that anywhere before!

    BuyLow's avatar - palm tree.jpg
    Florida
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    May 22, 2008
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    Posted: October 12, 2013, 7:58 am - IP Logged

    Powerball is a 30 year annuity as well.


      United States
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      July 25, 2012
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      Posted: October 12, 2013, 8:44 am - IP Logged

      Well I just finished reading the back of the new playslip and it says "Jackpot winners will receive their prize in annual payments over a 30 year period....."unless cash option chosen

      Geeze I didn't see that anywhere before!

      I wonder if anyone will ever take an annunity again though

        mikeintexas's avatar - tx avatar-1.gif
        Texas Panhandle
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        December 20, 2012
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        Posted: October 12, 2013, 10:07 am - IP Logged

        I wonder if anyone will ever take an annunity again though

        The Texas Lotto is now using a 30 yr. annuity, too.  If I were younger, say 30 or under w/ a family, I'd opt for the annuity, but since I'm not (sigh), I play the cash option.   I believe I read a story in here about a woman who inherited a Texas Lotto annuity only a yr. after her brother had won it and was hit w/ such a huge tax bill (income and estate taxes) that she wasn't going to get any of the money for ten years and was going to have to chip in a substantial amt. of her own money towards the taxes.   I think the Lottery Comission allowed her to get the rest of the JP in a lump sum.

          Jon D's avatar - calotterylogo
          Los Angeles, California
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          Posted: October 12, 2013, 10:26 am - IP Logged

          I wonder if anyone will ever take an annunity again though

          The annuity option really doesn't make sense anymore for the multi-state Jackpot games. It's just a marketing gimmick now.

          It might have made sense in the old days, when jackpots were small like a couple million, as a way to boost them higher.(similar to a state lotto) But with a several hundred million jackpots now being more common for MM/PB, it's antiquated. Especially with those large jackpots, your annual payment comes in well above the top tax bracket, so there's not even any benefit there.

          And in today's world, with annuities funded by treasury securities, backed by the full faith and credit of the numbnuts in congress  . . . Eh, I'll take the cash thank you.

            sookie's avatar - nw femalewiz.jpg

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            Posted: October 12, 2013, 11:14 am - IP Logged

            I will take the cash option.  Annuity has too many risks involved, the company who owns it can go bust and who knows how or when the next check would be sent, if it ever was.  The process of leaving it to heirs is messy.

            If the cash sum is given up front, I know exactly how much I have and pay the taxes and then the rest is up to me.  If my state lottery goes under or the company who funds annuities does then I don't have to worry about my money.  I'll have enough to concentrate on having tens of millions to look out for.

              Romancandle's avatar - moon
              Upacreek
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              Posted: October 12, 2013, 12:30 pm - IP Logged

              Is it a graduated annuity like PB?  Or did they keep it like is now?

              If so, PB still has the advantage there...

              MM annuity option is not enticing at all as is... cash option only way to go.

              -RC

                BuyLow's avatar - palm tree.jpg
                Florida
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                May 22, 2008
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                Posted: October 12, 2013, 12:32 pm - IP Logged

                If I am not mistaken in FL we can take some of the winnings cash value and some annuity.  That could actually be a smart move for a small amount of the money, just incase you BLOW THE WAD and lose the cash value.  A safety net if you will.

                  LottoMetro's avatar - Lottery-024.jpg
                  Happyland
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                  September 1, 2013
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                  Posted: October 12, 2013, 2:10 pm - IP Logged

                  I'm with JonD on this one, these days it really doesn't make sense to take the annuity. I am fairly young but 30 years is a long time. I'm not married and my family is small so it would just be wasting time/money. A bird in the hand is worth two in the bush. It's only a matter of time before the country will default, honestly, it's simple math. It might be a long time from now but I'm not taking any chances. I've seen other places where they say annuity is better because of the huge discount taking cash, but I've done some calculations and that isn't necessarily true. You can invest in tax-free bonds and match or potentially even beat the Treasuries. And these days it seems like corporations and some municipalities are better at paying their bills than the government.

                  Now if the jackpot is a billion, maybe I would consider the annuity, because it would be difficult to invest the lump all at once. The payments would be so large that it would compound so easily. Plus, I want to be a billionaire someday Yes Nod But for most cases I agree cash is the only way to go

                  If the chances of winning the jackpot are so slim, why play when the jackpot is so small? Your chances never change, but the potential payoff does.
                  If a crystal ball showed you the future of the rest of your life, and in that future you will never win a jackpot, would you still play?

                  2016: -48.28% (13 tickets) ||
                  P&L % = Total Win($)/Total Wager($) - 1

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                    Marana AZ
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                    Posted: October 12, 2013, 2:24 pm - IP Logged

                    The cash payout is more valuable when interest rates are low but rising or expected to rise. You will get a larger cash payout because it takes more cash to fund the annuity and the prize you receive is the equivalent of what it costs them to purchase the annuity. When interest rates are high but falling or expected to fall, it is better to take the annuity because the cash payout will be lower.

                      RJOh's avatar - chipmunk
                      mid-Ohio
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                      March 24, 2001
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                      Posted: October 12, 2013, 4:50 pm - IP Logged

                      Powerball is a 30 year annuity as well.

                      So is Ohio's Classic Lotto jackpot.  It just make sense to advertise the cash amount for as much as possible.

                       * you don't need to buy more tickets, just buy a winning ticket * 
                         
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