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Looking at that 586 million...I think I want the annunity

Topic closed. 26 replies. Last post 3 years ago by mikeintexas.

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helpmewin's avatar - dandy
u$a
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Posted: December 16, 2013, 10:43 pm - IP Logged

Lump sum vs. annuity will always be an argument for the ages.  Many people here are quick to dismiss the annuity; I've made no secret of my opinion that the annuity is not necessarily a fool's choice and is at least worth looking into.

A case can be made for either option; I'm not going to rehash them here.  Besides, it'll detract from the point I'm about to make:  When the jackpot gets this high, it doesn't really matter.  Unless you plan to splash out so large that you would immediately blow through more than the first year's payments, I fail to see how you can go wrong taking the annuity.  Check out the Jackpot Analysis page over on USA Mega; you're averaging $13-14 million a year after taxes.  (Because the Mega Millions adopted Powerball's sliding scale, it actually starts at around $6M and finishes at over $24M post-tax.)  I don't know about anybody else, but that's just fine for me.

It is entirely possible that one could buy a better annuity.  Keep in mind that you're starting behind the 8-ball, though; not only are you losing about half of the money right off the top (because you're forgoing 30 years worth of interest), you're also getting most of your taxes taken out immediately.  So if you think you can buy an annuity -- or make any other kind of investment -- that is so good that it overcomes both of those obstacles AND is structured so that you're not being taxed again when it pays out, go right ahead.  You really should take the time to do the math first, though.

Do what you want.  But don't automatically dismiss those who would take the opposite side of yours as morons.  Come to think of it, this applies to a lot more than the lottery.

I Agree! Well said mediabrat

Let it Snow Snowman

    BuyLow's avatar - palm tree.jpg
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    Posted: December 16, 2013, 10:54 pm - IP Logged

      hearsetrax's avatar - 0118

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      Posted: December 17, 2013, 6:58 am - IP Logged

      I agree with Mediarat

       

      I personally see no problem with ethier option

      provided one has a decent game plan,actually sticks to it and resists temptation regardless of the form it takes

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        Posted: December 17, 2013, 8:05 am - IP Logged

        Lump sum vs. annuity will always be an argument for the ages.  Many people here are quick to dismiss the annuity; I've made no secret of my opinion that the annuity is not necessarily a fool's choice and is at least worth looking into.

        A case can be made for either option; I'm not going to rehash them here.  Besides, it'll detract from the point I'm about to make:  When the jackpot gets this high, it doesn't really matter.  Unless you plan to splash out so large that you would immediately blow through more than the first year's payments, I fail to see how you can go wrong taking the annuity.  Check out the Jackpot Analysis page over on USA Mega; you're averaging $13-14 million a year after taxes.  (Because the Mega Millions adopted Powerball's sliding scale, it actually starts at around $6M and finishes at over $24M post-tax.)  I don't know about anybody else, but that's just fine for me.

        It is entirely possible that one could buy a better annuity.  Keep in mind that you're starting behind the 8-ball, though; not only are you losing about half of the money right off the top (because you're forgoing 30 years worth of interest), you're also getting most of your taxes taken out immediately.  So if you think you can buy an annuity -- or make any other kind of investment -- that is so good that it overcomes both of those obstacles AND is structured so that you're not being taxed again when it pays out, go right ahead.  You really should take the time to do the math first, though.

        Do what you want.  But don't automatically dismiss those who would take the opposite side of yours as morons.  Come to think of it, this applies to a lot more than the lottery.

        What you said is exactly what I based my decision on to take the annunity. 1st check would be 5.9 mil after tax and last would be 24 mil after tax. When your pulling in that kind of scratch a year, you can't blow through it...unless your doing dumb stuff like "making it rain" or putting "30 in gold rims on all your Rolls Royces and Bentleys. LOL

          rcbbuckeye's avatar - Lottery-043.jpg
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          Posted: December 17, 2013, 9:04 am - IP Logged

          I like what Coin Toss said. You can buy an annuity with the cash.

          My main reason for the cash is that I might not live 30 years and I don't want a headache for my wife or kids with estate taxes. On top of that, 30 years is a long time. With the way the country and the economy, and taxes are going, I don't believe anyone really knows what is going to happen. Can anyone really say with certainty that if things go in the dumper that your annuity would survive? If that happened, I realize maybe cash is worthless also, but I would still rather have the cash in hand than the hope of a check coming.

          CAN'T WIN IF YOU'RE NOT IN

          A DOLLAR AND A DREAM (OR $2)

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            Posted: December 17, 2013, 1:25 pm - IP Logged

            The ranch I want to buy is way, way, way more than 5.9 million.

             

            Ill be taking the cash option. If I blow it all, then I guess Ill have to live off the 90k a year the ranch brings in

              savagegoose's avatar - ProfilePho
              adelaide sa
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              Posted: December 17, 2013, 5:11 pm - IP Logged

              yeah 5 mill a year is more than enough for me, i think i could invest it wisely, and not blow the whole 5 in  a year. if successful by time im 80 ill have more than the original  cash  payment in  investments. and if im not, i only have to wait till next year to be flush with cash again.

                EZMoney's avatar - weedss04lx1

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                Posted: December 17, 2013, 5:29 pm - IP Logged

                Mathematically and strategically speaking, choosing the cash option is always better than the annuity option.

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                  Posted: December 17, 2013, 8:01 pm - IP Logged

                  My only reason for prefering the cash option is that 30 years is a long time, a lot of things could change although the annuity option looks really good right now with the bump today I am still going to go with the cash option.

                    rdgrnr's avatar - walt
                    Way back up in them dadgum hills, son!
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                    Posted: December 17, 2013, 8:20 pm - IP Logged

                    My only reason for prefering the cash option is that 30 years is a long time, a lot of things could change although the annuity option looks really good right now with the bump today I am still going to go with the cash option.

                    I used to have a Trinitron TV.

                    I think it was a Sony.

                    Might still have it out in the barn.

                      haymaker's avatar - Lottery-012.jpg
                      Egg Harbor twp.south Jersey shore
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                      Posted: December 17, 2013, 8:42 pm - IP Logged

                      There is no way I myself would ever spend that 316 million or 215 after tax...so Ive been checking an annunity pay out site and my first check would be 5.9 million and the last (if I lived to 71) would be like 24 or 25 million and that's if I win tommorrow night. I dont have kids my brothers and sisters are older than me so Id probably take the annunity and then set up a trust and when I died some charity could just have it, but I think it would be cool getting that check every year, that big check every year LOL

                      If you really want an annuity, you should still take the cash and buy your own annuity or maybe more than one,

                      you can get different times and terms, also the big chunk of cash will allow you to invest in other things,

                      rather then tie up all the $ in one thing.

                      Diversity is the key.

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

                        mikeintexas's avatar - tx avatar-1.gif
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                        Posted: December 18, 2013, 12:22 am - IP Logged

                        The ranch I want to buy is way, way, way more than 5.9 million.

                         

                        Ill be taking the cash option. If I blow it all, then I guess Ill have to live off the 90k a year the ranch brings in

                        The one I want is 7.45 million. 2+ sections, live water (several springs), small lake (27 acres), several ponds and duck marshes, several homes, 9-hole golf course and nearly all of it high fenced with an established population of several hundred white-tailed deer (and a few dozen of other types).  I don't know what sort of business I could do w/ the property, but I'd sure do something for tax purposes.   That's one of the reasons I would opt for the cash, just so I wouldn't have to finance the property.