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Anyone else notice this about Mega Millions

Topic closed. 40 replies. Last post 6 months ago by Drenick1.

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NY
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October 16, 2005
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Posted: June 9, 2016, 1:53 am - IP Logged

The only logical reason in which the cash value goes up more than an annuity would be a negative interest rate. There are many countries in Europe that have negative interest rates in which the customer actually has to pay the bank a percentage to keep his or her money.

The logical reason is that the interest rate applies to all of the cash, not just the increase since the previous drawing. You can see that in this table of PB values: http://www.txlottery.org/export/sites/lottery/Documents/jackpotestimates/pb20160608.pdf  The advertised annuity is always the total cash value multiplied by the rate for that drawing (with a minor amount of rounding).

    rcbbuckeye's avatar - Lottery-043.jpg
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    Posted: June 9, 2016, 8:47 am - IP Logged

    I think a base $15million MM jackpot win would be cutting it in terms of providing a dream retirement but I don't doubt it would be a good supplemental nest egg. A sole winner would net a cash payout of approximately $5 million after ALL taxes. On the other hand, the Powerball base jackpot of $40 million (cash value net of $13-$14 Million) should definitely secure an ideal and dream worthy retirement for 99% of us.

    At my age it would be plenty to live on. I don't care about 1% of anything. Just what I would need to be debt free and live comfortably for 20-25 years.

    CAN'T WIN IF YOU'RE NOT IN

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      Drenick1's avatar - villiarna
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      Posted: June 9, 2016, 12:27 pm - IP Logged

      The logical reason is that the interest rate applies to all of the cash, not just the increase since the previous drawing. You can see that in this table of PB values: http://www.txlottery.org/export/sites/lottery/Documents/jackpotestimates/pb20160608.pdf  The advertised annuity is always the total cash value multiplied by the rate for that drawing (with a minor amount of rounding).

      I wasn't referring to all of the cash in the current jackpot just the previous increase. An annuity valued at $9 million with a cash value of $10.8 million would require a negative interest rate. Simply put, your cash investment of $10.8 million would give you an annuity with a value of $9 million.

        Drenick1's avatar - villiarna
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        Posted: June 9, 2016, 12:37 pm - IP Logged

        At my age it would be plenty to live on. I don't care about 1% of anything. Just what I would need to be debt free and live comfortably for 20-25 years.

        I would agree that anyone who has modest goals and is just interested in being debt free while enjoying a comfortable lifestyle would never need several millions As long as you're sensible and stay healthy there is no reason a $1 million nest egg couldn't sustain you for 25 years.

        The caveat is unexpected health care/assisted living expenses many of us may encounter as we get much older plays a major role in just how far our money will last.

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          LA Ca.
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          Posted: June 10, 2016, 11:15 pm - IP Logged

          It was addressed in the news forum a  couple of days ago:

           

          https://www.lotterypost.com/news/304029

            Uluska's avatar - strawberry

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            Posted: June 11, 2016, 7:10 pm - IP Logged

            Then it makes sense not to use numbers associated with graduation month and approximate birthdays of the graduates.

              realtorjim's avatar - images q=tbn:ANd9GcT7U3t20NgScoPlxOqLT6TR0vQeJNBV3_tTswe1XeFDTsdw3NLZ

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              Posted: June 14, 2016, 7:30 pm - IP Logged

               I thought some might like the sales figures (rounded) for the current MegaMillions run (sales do not include megaplier).

               

              Jackpot (in M)

              Sales (in M)

              Increase (in M)

              293

              280

              36

              20

              260

              34

              9

              251

              34

              16

              235

              29

              17

              218

              30

              15

              203

              29

              16

              187

              26

              13

              174

              25

              13

              161

              25

              11

              150

              23

              12

              138

              23

              10

              128

              21

              10

              118

              19

              10

              108

              18

              11

              97

              17

              8

              89

              16

              9

              80

              16

              8

              72

              15

              7

              65

              16

              8

              57

              15

              7

              50

              15

              7

              43

              14

              8

              35

              14

              5

              30

              14

              5

              25

              14

              5

              20

              14

              5

              15

              14

                I'm feeling a jackpot win coming my way!

                Drenick1's avatar - villiarna
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                Posted: June 17, 2016, 6:12 pm - IP Logged

                Thank you realtorjim, for the sales figures.

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                  NY
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                  Posted: June 18, 2016, 3:34 pm - IP Logged

                  I wasn't referring to all of the cash in the current jackpot just the previous increase. An annuity valued at $9 million with a cash value of $10.8 million would require a negative interest rate. Simply put, your cash investment of $10.8 million would give you an annuity with a value of $9 million.

                  You may not have been referring to all of the cash, but that's what's used to determine the annuity value. There is no annuity valued at $9 million, and there's no negative interest rate, as part of the jackpot. There's a total cash value (or was at that time) of  $173.3 million, and if it had been invested at the lower (but still positive) interest rate available at that time it would have produced annuity payments totaling $260 million.

                    TheMeatman2005's avatar - lightening
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                    Posted: June 18, 2016, 5:56 pm - IP Logged

                    I would agree that anyone who has modest goals and is just interested in being debt free while enjoying a comfortable lifestyle would never need several millions As long as you're sensible and stay healthy there is no reason a $1 million nest egg couldn't sustain you for 25 years.

                    The caveat is unexpected health care/assisted living expenses many of us may encounter as we get much older plays a major role in just how far our money will last.

                    I don't know what your standards of living are, but I would want need more than $40,000 / year to live on.

                    Between general living expenses, utilities, food and other necessities and a nice vehicle (with insurance) that is just not enough.

                    The Meatman

                    “The quickest way to double your money is to fold it in half and put it in your back pocket.” Will Rogers

                    Winning happens in a flash, Like A Bolt Of Lightning!  Patriot

                      Drenick1's avatar - villiarna
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                      Posted: June 19, 2016, 11:15 am - IP Logged

                      I don't know what your standards of living are, but I would want need more than $40,000 / year to live on.

                      Between general living expenses, utilities, food and other necessities and a nice vehicle (with insurance) that is just not enough.

                      I was referring to the $1,000,000 amount as a supplement to ones current income. There is absolutely no way anyone could retire comfortably at a young age (under 40) with that amount. If by chance someone got $1million tax free and was in their 70's then it should be ok as long as no unexpected medical situation arises.