Annuity or Cash ValuePrev TopicNext Topic

• CDanaT

  

  Central TN
  United States
  Member #121,185
  January 4, 2012
  9,389 Posts
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  May 8, 2026, 11:49 am

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  Cash values of the MM & PB jackpots are around 45% of the advertised Annuity. What would be your choice ?
• winterbird

  

  us
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  January 25, 2026
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  May 8, 2026, 1:23 pm

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  Id take the cash. For a nightmare annuity scenario, just look at what happened with publishers clearing house. They declared bankruptcy and stopped paying out to the winners who still had payments coming.
• Justing618

  

  Baltimore
  United States
  Member #221,592
  March 26, 2022
  999 Posts
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  May 8, 2026, 3:33 pm

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  Annuity over Here 👋 Do not have to worry about work for 30 years. Also have a developmentally delayed family member. I would set up a blind trust for. I don't need or want any access to 100s of .... or .......millions of dollars. There would be to many hands being held out. Wanting pieces of the pie. Ie .....bankers,lawyers,financial planners, and I'm sure plenty of moochers and con-artists to .....
• Coin Toss

  

  Zeta Reticuli Star System
  United States
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  January 17, 2006
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  May 8, 2026, 3:56 pm

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  I forget who it is but a posters had a sig. "You can always buy a better annuity". Also what winterbitd said about Publishers Clearing House.
• KY Floyd

  

  NY
  United States
  Member #23,834
  October 16, 2005
  5,128 Posts
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  May 9, 2026, 1:56 am

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  " just look at what happened with publishers clearing house. "

  Here's a fun fact. Publisher's Clearing House wasn't running a Ponzi scheme, but they were apparently paying for prizes won in the past with the money they were making when a prize payment was due. There was no prize money set aside in a separate fund, let alone with a 3rd party that was responsible for making the payments independently of PCH.  If a state defaults on an annuity it's going to be  because there was some major financial meltdown that would mean whatever you already had was no longer even remotely as useful as it had been. 

  "You can always buy a better annuity" 

  Can you? Lottery annuities are invested conservatively to reduce the chances of defaulting. When you take the cash you'll have to decide if you want more risk and a potentially higher ROI or low risk and lower ROI. The one thing you won't have a choice about is how much you have to invest. If the cash value is $100 million + the first installment the lottery pays the first installment and invests $100 million, which earns $4 million the first year. If you take the cash you'll pay $37 million in federal taxes and be left with only $63 million to invest. You'll need to invest at 6.35% to make the same $4 million. Also paying 7% in state t axes? Now you're only investing $56 million and you need to invest at 7.14% to make $4 million the first year.

  IMHO the reason to take cash has almost nothing to do with taxes and investment factors.  Edwin  Castro could have lived extremely comfortably on the roughly $30 million (pre-tax) that would have been his first annuity payment, but if you win an annuity value 10, 20, or even $100 million  I think it would be perfectly reasonable to want to spend more in the first year than the first annuity payment gives you. The cash requires you to make a sensible plan for the future and stick to it, but it also gives you a lot of initial flexibility.
• CDanaT

  

  Central TN
  United States
  Member #121,185
  January 4, 2012
  9,389 Posts
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  May 9, 2026, 9:40 am

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  2 primary items are of concern for this participant when it comes to the choice of going with the Cash value vs Annuity.

  1)  Taxes 

  2)  Age

  I know that the 37%  tax figure will be addressed this year just 1 time and no state income tax. There are no assurances that my state(TN) couldn't implement a 1 time tax similar to what CA & WA states are proposing or start a state income tax. I have no idea what the Fed tax rate in 5, 10, 15, 20 or 25 years might possibly change to either.      https://taxfoundation.org/data/all/federal/historical-income-tax-rates-brackets/

  I may not live to see/enjoy the final 5-10 payments. There is no guaranty the I would see payment #2 next year, let alone 15 - 29 years down the road. Rather have it now while all the marbles are reasonably in place and sound rational decisions can be made about the process of settling the estate between the X # of heirs.

  Cash is the choice for this participant. Best of luck with your choice when its your turn to win.

  Bad men need nothing more to compass their ends, than that good men should look on and do nothing.
• JustMaybe

  

  us
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  January 2, 2023
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  May 10, 2026, 9:21 pm

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  Am always torn between Cash and Annuity.

  But I think should I win, I would opt for the Cash Option.

  At a moderate 7% annual return, and a modest draw down, the money would grow past the annuity by year 10 to 15.

  It's true that a lot can change in 30 years, from tax laws to stability.

  I believe winning the lottery jackpot is a 💯 % factor of luck.

  May Fortuna, goddess of chance or lot vindicate me.
• IAmABadOne

  

  Cambridge, Ohio
  United States
  Member #232,684
  June 8, 2023
  98 Posts
  Online
  May 11, 2026, 10:45 pm

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  Certainly cash value for me because that is the only *real* number. And, I am not a spring chicken any more...

  And, as always, I fervently hope that the guy in Washington D.C. would issue an executive order making a mandatory interest rate of 0.00% for all lottery annuities and removing taxation for all lottery winnings, forever. 

  That would end all of the foolishness about many people not understanding how the interest rates affect the advertised annuity value vs cash value jackpot amounts, and would end lots of winners being so disappointed when they do find out the bottom line.

  That would also allow superb flexibility for winners. Keep what you want in cash to spend and/or invest wisely and put what you want to in annuities or other financial vehicles of your choice if you have a need for making delayed payments to yourself or others.

  Fun Fact: Isn't it funny how "fat chance" and "slim chance" mean about the same thing?

  Best wishes and good luck.

  I Am A Bad One, But I am not bad all of the time...
• Stat$talker

  

  700 light yrs West of Milky Way Galaxy's Center
  United States
  Member #200,634
  September 1, 2019
  5,507 Posts
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  May 12, 2026, 7:12 pm

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  In response to IAmABadOne

  Quote: Originally posted by IAmABadOne on May 11, 2026

  Certainly cash value for me because that is the only *real* number. And, I am not a spring chicken any more...

  And, as always, I fervently hope that the guy in Washington D.C. would issue an executive order making a mandatory interest rate of 0.00% for all lottery annuities and removing taxation for all lottery winnings, forever. 

  That would end all of the foolishness about many people not understanding how the interest rates affect the advertised annuity value vs cash value jackpot amounts, and would end lots of winners being so disappointed when they do find out the bottom line.

  That would also allow superb flexibility for winners. Keep what you want in cash to spend and/or invest wisely and put what you want to in annuities or other financial vehicles of your choice if you have a need for making delayed payments to yourself or others.

  Fun Fact: Isn't it funny how "fat chance" and "slim chance" mean about the same thing?

  Best wishes and good luck.

  "I fervently hope that the guy in Washington D.C. would issue an executive order making a mandatory interest rate of 0.00% for all lottery annuities and removing taxation for all lottery winnings, forever. "

  Haah, if anythang, he'll issue an Executive Order assigning All Yo interest to HIM !
• rcbbuckeye

  

  100

  Texas
  United States
  Member #55,887
  October 23, 2007
  22,270 Posts
  Offline
  May 12, 2026, 8:15 pm

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  In response to CDanaT

  Quote: Originally posted by CDanaT on May 9, 2026

  2 primary items are of concern for this participant when it comes to the choice of going with the Cash value vs Annuity.

  1)  Taxes 

  2)  Age

  I know that the 37%  tax figure will be addressed this year just 1 time and no state income tax. There are no assurances that my state(TN) couldn't implement a 1 time tax similar to what CA & WA states are proposing or start a state income tax. I have no idea what the Fed tax rate in 5, 10, 15, 20 or 25 years might possibly change to either.      https://taxfoundation.org/data/all/federal/historical-income-tax-rates-brackets/

  I may not live to see/enjoy the final 5-10 payments. There is no guaranty the I would see payment #2 next year, let alone 15 - 29 years down the road. Rather have it now while all the marbles are reasonably in place and sound rational decisions can be made about the process of settling the estate between the X # of heirs.

  Cash is the choice for this participant. Best of luck with your choice when its your turn to win.

  Cash for me too. Getting late in life for me.

  JUST LOOK AT THE ODDS OF ANY JACKPOT GAME, THAT WILL TELL YOU EVERYTHING YOU NEED TO KNOW
• JustMaybe

  

  us
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  January 2, 2023
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  May 12, 2026, 8:27 pm

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  Most people reference age when they weigh the annuity or the cash value.

  What would be a reasonable cut off age where one says, heck no, am taking cash all the way from here 🤔

  I believe winning the lottery jackpot is a 💯 % factor of luck.

  May Fortuna, goddess of chance or lot vindicate me.
• KY Floyd

  

  NY
  United States
  Member #23,834
  October 16, 2005
  5,128 Posts
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  May 12, 2026, 10:55 pm

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  "What would be a reasonable cut off age where one says, heck no, am taking cash "

  I don't think that whether or not you expect to live long enough to collect all of the payments is a good reason for making the choice between cash and annuity. Being older, within reason, could argue in favor of the annuity. If you're under 50 or 60 there are probably a lot more reasons you might want to spend a disproportionate amount of the jackpot in the first few years. If you're 70 and the cash value is $100 million what are you going to spend $10 or $20 million on? If you take the annuity you'll probably die before collecting it all, but if you want to leave money to offspring, relatives, or charity the remaining payments are both protected from things like taxes and bad investments (or decisions), and bigger than the early payments.

  That said, if you're going to decide based on your age perhaps 50 is a good cutoff for men, and 54 for women. Maybe compromise for a married couple, or go with the age for men in the hopes that you both live for the full period. I picked those ages because according to  this table from the social security administration  those are the ages at which your average life expectancy is the 29 years it will take to collect all 30 PB or MM payments. The table is for 2022, so things may be a bit different in 2026. Of course you could also make adjustments based on family history and your personal health factors.
• CDanaT

  

  Central TN
  United States
  Member #121,185
  January 4, 2012
  9,389 Posts
  Offline
  May 13, 2026, 2:53 pm

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   With the Cash Value, I can make my planned, one time, non profit donations this year. I can also give to the family members/friends this year. One Time. No   trickling finances out for years to come. No future considerations of "what am I going to give this person this year" to consider/adjust.                                                     Here is your millions now.(Don't be foolish)................ That's it !!..... This Bank has officially closed up shop... Have a great time and a wonderful life...                     next time you buy lunch/dinner... I will see you when I see you......Hasta La Pasta
• JustMaybe

  

  us
  Member #228,334
  January 2, 2023
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  May 14, 2026, 9:41 pm

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  In response to KY Floyd

  Quote: Originally posted by KY Floyd on May 12, 2026

  "What would be a reasonable cut off age where one says, heck no, am taking cash "

  I don't think that whether or not you expect to live long enough to collect all of the payments is a good reason for making the choice between cash and annuity. Being older, within reason, could argue in favor of the annuity. If you're under 50 or 60 there are probably a lot more reasons you might want to spend a disproportionate amount of the jackpot in the first few years. If you're 70 and the cash value is $100 million what are you going to spend $10 or $20 million on? If you take the annuity you'll probably die before collecting it all, but if you want to leave money to offspring, relatives, or charity the remaining payments are both protected from things like taxes and bad investments (or decisions), and bigger than the early payments.

  That said, if you're going to decide based on your age perhaps 50 is a good cutoff for men, and 54 for women. Maybe compromise for a married couple, or go with the age for men in the hopes that you both live for the full period. I picked those ages because according to  this table from the social security administration  those are the ages at which your average life expectancy is the 29 years it will take to collect all 30 PB or MM payments. The table is for 2022, so things may be a bit different in 2026. Of course you could also make adjustments based on family history and your personal health factors.

  That is a very reasonable explanation.

  Another key consideration would be taxes and the ability to lock the current tax rate when you go with the cash option.

  Politicians may not necessarily raise taxes for all, but there is a hight chance that 15 years from now the direction would be to tax those in higher income brackets more. The way the annuity is structured, you earn more in the later years, so that becomes a real risk.

  Thank you for all your very valid points

  I believe winning the lottery jackpot is a 💯 % factor of luck.

  May Fortuna, goddess of chance or lot vindicate me.
• JackpotWanna

  

  United States
  Member #4,121
  March 23, 2004
  842 Posts
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  May 14, 2026, 10:35 pm

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  I voted for the cash please.  When I was young I wanted the Annuity.