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Sorrento

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Sep 20, 2018, 10:18 am

Just a curious question about the non-grand prizes in the various lotteries, i.e., Mega, PB, etc. I know the advertised jackpot is the future value of the jackpot if you were to take the 30 year annuity and the lump sum is about 2/3rds. But what if you were to win the "2nd prize", like the 5 out of 5 $1million prize? Is the prize really $1m or is it the same where it's actually about $600k and you had the option to take the money over 30 years? Or is it $1 million, period (before taxes)?
MsBee18

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Sep 20, 2018, 11:17 am

Non-grand prizes for Mega, PB are lump sums. e.g. $1 million, period (before taxes).
Sarge0202

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Sep 20, 2018, 11:28 am

https://www.lotterypost.com/search?q=annuity+vs.+lump

First always talk with tax professional.

For STATE jackpot lotteries and scratchers, it is a tossup. Unless your yearly payment is 1MIll+, lump is usually best for tax reasons. Smaller amounts, tax difference savings will probably be better then (guaranteed) investment income to get annuity. Also need to consider, is it enough to quit job and retire, your age (are you going to die before it cash it all), do you have massive debt that needs paid now, do you have the self control to budget the lump sum and not blow it in a year, etc.
wander73

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Sep 20, 2018, 11:51 am

Quote: Originally posted by Sorrento on Sep 20, 2018
Just a curious question about the non-grand prizes in the various lotteries, i.e., Mega, PB, etc. I know the advertised jackpot is the future value of the jackpot if you were to take the 30 year annuity and the lump sum is about 2/3rds. But what if you were to win the "2nd prize", like the 5 out of 5 $1million prize? Is the prize really $1m or is it the same where it's actually about $600k and you had the option to take the money over 30 years? Or is it $1 million, period (before taxes)?

I will be honest of what you're asking. I don't think a lot of people understand what the situations might be which way they go with it . most people will take the cash because if you take annuity you have to understand the interest rates the feds and everything . If it is annuity , what are the repercussions? The When my dad was alive he always said take the cash because basically I think if you ever hits lottery and if they die I think the state takes it back

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Sorrento

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Sep 20, 2018, 12:58 pm

Thanks everyone. I was just interested in whether the $1m 2nd prize was the full $1m or a smaller current value jackpot like the big first prize ones always are. I would be more than happy to win the 2nd prize. $1m before taxes is a nice cushion.

As far as whether to go with the lump sum if I were to win the grand prize, I'd go with lump sum.
TheGameGrl

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Sep 20, 2018, 1:02 pm

Taxes always increase. So does not matter what the interest rate is projecting.

Most states allow a designated survivor should the recipient pass before all proceeds are allocated.

I have zero interest in stocks . It's just lining a corporate beasts pockets.

It's terribly sad that a 100k turns into 46k in places like NYC or jersey. They tax the person immensely. Federal,state, local.

Count your smiles.
Sarge0202

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Sep 20, 2018, 1:25 pm

Quote: Originally posted by TheGameGrl on Sep 20, 2018
Taxes always increase. So does not matter what the interest rate is projecting.

Most states allow a designated survivor should the recipient pass before all proceeds are allocated.

I have zero interest in stocks . It's just lining a corporate beasts pockets.

It's terribly sad that a 100k turns into 46k in places like NYC or jersey. They tax the person immensely. Federal,state, local.

Taxes always increase.

Not necessarily true everywhere. Also with annuities, it is a fixed income (usually) and with inflation, you will b dropping tax brackets eventually.

Most states allow a designated survivor should the recipient pass before all proceeds are allocated.

True, unfortunately you might be hit with estate tax if too much is remaining. Some states might allow alternate methods like LLC or trust.

It's terribly sad that a 100k turns into 46k in places like NYC or jersey. They tax the person immensely. Federal,state, local.

https://smartasset.com/taxes/income-taxes#jRfeeXXQVI

100K Single NYC income after taxes $68K, married $76K. And that is with FICA taken out, they won't do that on lottery.

1MIL Single NYC 534K back, married 568K back

Not sure where you are getting a 54% tax rate from.
Todd

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Sep 20, 2018, 6:44 pm

Quote: Originally posted by Sorrento on Sep 20, 2018
Thanks everyone. I was just interested in whether the $1m 2nd prize was the full $1m or a smaller current value jackpot like the big first prize ones always are. I would be more than happy to win the 2nd prize. $1m before taxes is a nice cushion.

As far as whether to go with the lump sum if I were to win the grand prize, I'd go with lump sum.

Lower-tier prizes are typically cash. There are only a few games offering lower-tier prizes as annuities: Cash4Life and Lucky for Life are the ones I'm aware of.

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cheritad

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Sep 20, 2018, 7:48 pm

I have a question I am new to playing lottery how do you bid on the four digit to get the 2way straight I bid on a 5898 $1 2 way but my friend told me I only when $204
cheritad

Warren
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Sep 20, 2018, 8:18 pm

Not understanding
Artist77

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Sep 21, 2018, 7:40 pm

Quote: Originally posted by cheritad on Sep 20, 2018
I have a question I am new to playing lottery how do you bid on the four digit to get the 2way straight I bid on a 5898 $1 2 way but my friend told me I only when $204

You can look up that lottery game online and see how much you won.

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Stack47

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Sep 21, 2018, 10:49 pm

Quote: Originally posted by cheritad on Sep 20, 2018
I have a question I am new to playing lottery how do you bid on the four digit to get the 2way straight I bid on a 5898 $1 2 way but my friend told me I only when $204

It looks like you bought a $1 straight/box ticket on 12-way combination. Next time either tell the clerk you want a straight/ box ticket or check the appropriate box on play slip.
Stack47

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Sep 22, 2018, 4:49 pm

Quote: Originally posted by Todd on Sep 20, 2018
Lower-tier prizes are typically cash. There are only a few games offering lower-tier prizes as annuities: Cash4Life and Lucky for Life are the ones I'm aware of.

And players can get a lump sum settlement too.
beret32

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Sep 28, 2018, 7:47 am

What is the opinion on the Cash4Life top prize, for example? It is $365,000 yearly or $7 million lump sum. But if a person manages to live 30 more years, that's a total $10.95 million payout. I suppose it might depend on how young the person is.
Tucker Black

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Sep 28, 2018, 5:47 pm

Quote: Originally posted by beret32 on Sep 28, 2018
What is the opinion on the Cash4Life top prize, for example? It is $365,000 yearly or $7 million lump sum. But if a person manages to live 30 more years, that's a total $10.95 million payout. I suppose it might depend on how young the person is.

But the $10.95 million over 30 years is not the same as $10.95 million today. It's worth about 60% of that, or 6.6 million. The breakeven point is probably about 35 years when you consider mortality and interest.

So I would say that if you are over age 50, or over age 40 and in not so good health, or at any age and in bad health, take the lump sum.

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