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Can a lottery Cash Value be more than the Annuity Certain?

Topic closed. 6 replies. Last post 5 months ago by realtorjim.

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Posted: July 16, 2016, 6:29 pm - IP Logged

Since the lotteries often invest in government bonds for the Annuity Certain, and since bond rates have been earning negative interest of late, could the cash value of a lottery jackpot be more than the annuity?

Current Estimated Jackpot $500 Million

$535 Million Cash Value

  I'm feeling a jackpot win coming my way!

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    NY
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    Member #23835
    October 16, 2005
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    Posted: July 16, 2016, 9:06 pm - IP Logged

    I'd say there's absolutely no chance at all that you'll see a jackpot advertised that way.

    While it might theoretically be possible for an annuity to have a negative rate I'm sure there's zero chance that a lottery is going to advertise an annuity of $500 million if the cash value is $535 million. If those were the options we'd just see lotteries advertising the cash value that the overwhelming majority of winners choose anyway, because the advertising is all about promoting the biggest number they can.

    I suppose they could still offer the smaller annuity, but it would be much easier to just  offer a cash option and leave it to the winners to choose an investment.

      TheMeatman2005's avatar - lightening
      Brooklyn, NY
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      October 29, 2015
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      Posted: July 17, 2016, 3:15 pm - IP Logged

      Since the lotteries often invest in government bonds for the Annuity Certain, and since bond rates have been earning negative interest of late, could the cash value of a lottery jackpot be more than the annuity?

      Current Estimated Jackpot $500 Million

      $535 Million Cash Value

      I don't think the lottery would ever advertise the jackpot that way.

      If it came down to where the annuity would be less than the cash value, I think they would just forgo the annuity amount and make it a cash only jackpot. 

      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


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        Posted: July 17, 2016, 3:41 pm - IP Logged

        I want to see Cash Jackpots....Let that Bond go down to death so CA$H can keep climbing...

          LiveInGreenBay's avatar - driver
          Green Bay
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          October 15, 2015
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          Posted: July 17, 2016, 4:01 pm - IP Logged

          If someone wins 300 million or so, why squabble over a few thousand one way or another.  Take the money and run!  At least the government has no control over it after you pay the taxes on the lump sum.  And incidentally, what will the tax rate be in 10 or 20 years?  That's right, no one knows. 

          Also...Currently there's talk in DC where the feds would confiscate pensions to cover the debt and re-pay retirees over time with something similar to social security payments.  LOL!  If they did that, what makes anyone think they will stop there?  Maybe confiscate lottery annuity accounts?  Think this is BS?  In 1933 executive order #6102 signed by FDR required every American to turn any gold they held or face a 10,000 fine and/or 10 years in prison.  Back then lots of people had gold coins.

          Never give up.  Banana

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            April 14, 2014
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            Posted: July 17, 2016, 6:50 pm - IP Logged

            Since the lotteries often invest in government bonds for the Annuity Certain, and since bond rates have been earning negative interest of late, could the cash value of a lottery jackpot be more than the annuity?

            Current Estimated Jackpot $500 Million

            $535 Million Cash Value

            Your question is based on a false premise. Bonds have not been earning a negative interest rate. In fact, they never have.

              realtorjim's avatar - images q=tbn:ANd9GcT7U3t20NgScoPlxOqLT6TR0vQeJNBV3_tTswe1XeFDTsdw3NLZ

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              Posted: July 19, 2016, 12:46 am - IP Logged

              The premise of a Cash Value being more than the Annuity Certain was posted facetiously.  Although, never say never...

               

                I'm feeling a jackpot win coming my way!