New Library Definition - Cash OptionPrev TopicNext Topic

• Todd

  

  50

  Chief Bottle Washer

  New Jersey
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  May 31, 2000
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  Apr 6, 2003, 10:57 am

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  Cash Option

  Also, Lump-Sum Option

  One of the two typical ways a lottery prize is paid (the other being Annuity).

  When a lottery prize is paid with the Cash Option, the winner receives one large payment from the lottery, usually within a few weeks of redeeming the winning ticket.  Applicable taxes are normally withheld prior to the payment, although the winner may be responsible for additional taxes after receiving the prize, depending upon their situation.

  Although most government lotteries allow the winner to choose the cash option within 60 days of the drawing, some juridictions do not allow this option.  Therefore, players who wish to exercise the cash option in those jurisdictions must select the cash option when they purchase their lottery ticket.

  The cash value in a lottery is typically 50% - 60% of the corresponding annuity value.  This, plus the fact that most lotteries place a heavy emphasis on the higher annuity value, leads many people to believe that the cash value is derived (calculated) based on the annuity value.  However, the opposite is true

  The cash value is the actual amount that the lottery has in its prize pool after the total lottery proceeds are divided into administrative overhead, marketing costs, government programs, and the prize pool.  The annuity value is then calculated from the available cash value, based on prevailing interest rates (see "Annuity" for more information).
• CASH Only

  United States
  Member #379
  June 5, 2002
  11,296 Posts
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  Apr 7, 2003, 7:41 pm

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  Todd: Sorry I didn't explain it the way you did.
• Todd

  

  50

  Chief Bottle Washer

  New Jersey
  United States
  Member #1
  May 31, 2000
  27,930 Posts
  Online
  Apr 7, 2003, 8:06 pm

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  I just took your info and rearranged it a little.  Just trying to make everyone happy.

   

  Check the State Lottery Report Card
  What grade did your lottery earn?

   

  Sign the Petition for True Lottery Drawings
  Help eliminate computerized drawings!
• CASH Only

  United States
  Member #379
  June 5, 2002
  11,296 Posts
  Offline
  Apr 9, 2003, 8:49 am

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  See this one yet, AnnuityIsFunny?
• AnnuityIsGreat

  United States
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  January 17, 2003
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  Apr 9, 2003, 10:24 am

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  So, CashOIdon'tKnowTheDefinitionOfCashOption:

  So, now you're taking credit for Todd's work?  Next thing you're gonna say is that this website was your idea....  Must be the lumpsum you took over your troubled head too many times.  You wouldn't be like this if you preferred Annuity.

  Don't blow all your winnings in one place - Choose Annuity
• CASH Only

  United States
  Member #379
  June 5, 2002
  11,296 Posts
  Offline
  Apr 9, 2003, 10:43 am

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  AnnuityIsPhony:

  Every time you've won money through the lottery, you've been paid in LUMP SUM.
• Todd

  

  50

  Chief Bottle Washer

  New Jersey
  United States
  Member #1
  May 31, 2000
  27,930 Posts
  Online
  Apr 11, 2003, 3:29 am

  ▲▼

  "Cash Option": officially voted in.

   

  Check the State Lottery Report Card
  What grade did your lottery earn?

   

  Sign the Petition for True Lottery Drawings
  Help eliminate computerized drawings!