You won the Lottery!! - What do you take?

[Forgon]

So,

You just WON the lottery for $500 Million dollars!!!

What would you take? Lump sum of 359.4 Million (that would be taxed 35% (at least in US)), or the annuity option for 19 million a year for 26 years?!

I'll go first:

I'm pretty sure I've been told countless times always take the lump sum, even with the outrageous gift tax.

[Spectral]

I guess I'm inclined towards the lump sum followed by an attempt to join an investment group for purchasing a professional sports team.

[Darkrulerxxx]

take the lump sum. you don't know if the world is going to go to shit in the next 5-10 years, get what you can now and invest, be safe.

[vindicatorx]

If I was getting $19 million a year I would just do that I mean honestly I would get myself in order first pay off student loans bills etc. I wouldn't spend a whole lot most the time anyway.

[Spectral]

If the world goes that to shit, your investments aren't necessarily going to be worth anything anyways.

Gold and guns!

[Radux]

Lump sum and invest.
Live off of dividends forever. Live/travel how I want while still being able to contribute heavily towards charity and possibly do other entrepreneurial endeavors.

[Darkrulerxxx]

If the world goes that to shit, your investments aren't necessarily going to be worth anything anyways.

here's a good yahoo response i found with my line of thinking, too lazy to write my own.

"Because the future is uncertain. You don't know if inflation will completely negate the worth of your future payments. You don't know if you'll even be alive to get the payments (I haven't checked powerball, but some other lotteries don't allow you to pass on future payments to heirs).

Furthermore, you don't know the future tax rates beyond a few years. Since you're going to be taxed on the money you get regardless, do you really want to chance that you'll have to pay more in the future?

Lastly, you can use the money today to invest smartly to get even more money so that by the time the annuity is over, you might actually have more money than if you waited.

It's not about short-sightedness. It's about knowing the circumstances now versus the unknown. When you have that many unknowns, that's way too much risk for very little gain."

[KCguy]

take the lump sum. you don't know if the world is going to go to shit in the next 5-10 years, get what you can now and invest, be safe.

Investing can be very risky. Who's to say what can happen. I mean even if you only got paid for the one year, that's 19 million right there. Goodness man. To say you'd be set for life is an understatement.

[Forgon]

I am really surprised by the amount of people choosing the Annuity option.

I could have sworn it was common sense to take the lump sum. For various reasons already stated.

[Radux]

Investing can be very risky. Who's to say what can happen. I mean even if you only got paid for the one year, that's 19 million right there. Goodness man. To say you'd be set for life is an understatement.

Depends what you're investing in.

For instance, you could but a hell of a lot of land. That's something (when accounting for inflation) that's remained relatively stable for the longest time.
You could also invest in perishables that people JUST CAN'T LIVE WITHOUT. Think about it. Everyone needs toilet paper: invest in that company. Everyone needs water: invest in the water companies. Etc.

[TrumpIsPresident]

I'd take the 359.4 Million, buy Curse.com, and fire Radux.

...just kidding...

..I'd fire Endus.

[Thetruth1400]

If you used to lump sum you'd have to invest almost all of it immediately or you'd be taxed every year until you had virtually nothing left (IIRC).

And that just sounds like bad business

You're only taxed once, when you initially get it, vs yearly with Annuity. You don't get taxed yearly on income, that includes lottery winnings from previous years.

The maximum tax bracket currently is 39.6%, which if taking the cash option is $198 million year one, and nothing ever again from that money. Assuming that the tax rate, which is adjustable, doesn't rise over the next 30 years, is a fair chunk of change year one. If the tax rate rises though, the following years you will be taking $16.7 million a year, which still puts you in the top tax bracket, which will mean you're paying more over those 30 years, with a higher tax rate. If the rate lowers though, you're better off that way.

In the end, if you can get more than a 3-5% return on your investments, you're better off with the lump some by today's market and expectations for tax rates. If you're not good with money or don't know how to invest, you're better off with the 30 years, as you will see more money total, but less yearly which you could burn through. You're going to have to work really hard to spend in excess of that 16 million a year allowance you'd give yourself.

[Captain N]

Lump sum then buy a majority of the Comcast / Time-Warner Shares....I'm going to start my own World Domination and I'm starting with the Internet!

[Zoaric]

Annuity. It'd build a nice little house to my specifications (energy efficient, to the
point of being self-sustaining; ) pay off all of my college fees and student loans; buy
a nice car outright, furnish my house, then live comfortably off of the rest. I'd also
take long vacations, buy collectibles, have things specially made, etc.

However, passed year one where I set up most of the rest of my life, I would save most
of my money- be it in banks, stocks, whathaveyou. I'd also still go to college, though I
may take more fun classes and fewer real classes than currently.

[Spraxle]

Annuity every time. 19mil a year is plenty by a huge margin. I'd use the first 19mill to get set up. So house, car, etc. Then I'd invest the rest. That sounds boring probably, but it's the smart path. If my singleness continued I'd donate to organizations and such. But honestly after that initial year or two you could live off the interest probably.

[tibblaye]

if they would do weekly payments of it that'd be fantatic so i have x to spend on everything a week and not blow it all at once and go oops i got no money right now

[Aviditas]

19million a year for 26 years. I can't imagine going through 100k a year. 19 million. Id have fun for the first year. Do a ton of stupid shit. And then when i realize I dont need anything but a small house and family I'll invest the rest. Make sure my future children and their children never have to worry about how much they could spend on food like I do. They would be happy.

[Mormolyce]

The annuity is so large that I'd be set for life after the first payment...

On the other hand the lump sum is so massive that the enormous tax cut is actually irrelevant.

[Sal the Shieldhog]

Lump sum. Pay off college loans for both myself and my girlfriend. Move to Pennsylvania so I can be with my girlfriend, buy a nice house and a car. I'm rich now, so fuck finishing college.

Then build a kick-ass gaming rig and room, and invest the rest. Spend the rest of my days as a NEET while living comfortably off the investment profits.

[Forgon]

19million a year for 26 years. I can't imagine going through 100k a year. 19 million. Id have fun for the first year. Do a ton of stupid shit. And then when i realize I dont need anything but a small house and family I'll invest the rest. Make sure my future children and their children never have to worry about how much I could spend on food like I did. They would be happy.

But as mentioned before. It is common for the annuity option to have stings attached that would suck for you family, like if you die the money won't be passed on.

In this case, I feel like everyone should take the lump sum, do everything everyone already stated they would want to do with the annuity option, and protect yourself and your potential family from getting screwed in case something happens to you.