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  1. #81
    Quote Originally Posted by NeftBat View Post
    Lets just do the math.
    So 200Mil either in lump sum or over 30 years.
    If lump sum then you lose half up front and 35% to federal income tax leaving you with 65mil.
    So what average annual interest rate do you need to turn that into 200mil over 30 years?(the value of the annuity after 30 years)
    Answer: 3.85%.(or 6.85% including a 3% yearly inflation rate)

    Not unreasonable at all over a 30 year period, in fact it is low. A smart diversified investment plan can expect 12%(12% is the average rate of return for all mutual funds over the past 80 years.)

    So factoring in 3% inflation with average(12%) rate of return would net you effectively $862,399,100.49 over 30 years.
    If you took the annuity and invested everything you would have $648,159,223.87

    So a lump sum in that case is definitely the better choice.(If you even care about the difference between having $862mil vs $648mil)
    You lose half of it up front and receiving it all at 1 time puts you in the highest tax bracket (over 10 million a year) and you would be paying 50% federal income tax on it, plus your state level income tax and any local taxes.

    But aside from that, sounds like a good deal. Not used to seeing things pay interest rates that high.

  2. #82
    Quote Originally Posted by Fugus View Post
    You lose half of it up front and receiving it all at 1 time puts you in the highest tax bracket (over 10 million a year) and you would be paying 50% federal income tax on it, plus your state level income tax and any local taxes.

    But aside from that, sounds like a good deal. Not used to seeing things pay interest rates that high.
    In the US the highest federal tax bracket is currently 35% for those making over roughly 380k per year. I didn't include state and local taxes because not everyone has to pay those and for those that do it tends to vary.

    But you could run whatever numbers you wanted, the point is that the lump sum is the better deal most of the time. And basically the longer the term on the annuity the better bet the lump sum becomes.

    Also to add if you do happen to win the lottery and have a choice upon recite of the winnings of whether to take a lump sum or annuity, you can always just pay for a financial adviser and lawyer to figure it out for you. With that being said I think all the lotteries here require you to chose payment option on the point of sale of the ticket.
    Last edited by NeftBat; 2011-11-03 at 02:26 AM.

  3. #83
    Depends on how much I won - but anything over 10 mil I would probably go annuity.

    Annuity works for a lot of reasons.

    •) It controls my spending
    •) guarantees I'll never run out of money (short of a global collapse - but then again ALL money will be useless if that happens...)
    •) When my friends find out I won, I have a wonderful reason to say "I'll help you soon, but I chose the annuity - so you will have to wait until I get to you. Unless you have a BIG emergency that I can help you fix right now."

    As for what I would do with the money - primarily would be to help others in need. But my basic plan goes as follows:

    •) Pay off anything that my parents need, and send them off on a world-tour vacation. They deserve it. ^_^
    •) Pay off my Condo in Illinois and my other condo (rental) in South Carolina.
    •) Make a list of all friends and family who have helped me in a time of need - and check who can use the most financial help.
    •) Go down list of friends/family and help them financially with something. (Paying off their mortgage, pay off credit cards, purchase investments for children's college, ect...)
    •) When the list is done, I'll invest some money into my condo building association for paying off their debts due to bad homeowners who have been evicted, and help my neighbors who have helped me.
    •) Research charities (particularly ones that help people to keep their homes) and invest the rest of my money in those charities. It would be a wonderful feeling for me to be helped to keep my home out of the blue by winning the Lottery, so I want to share that with others and help them keep theirs.

    Toy-wise? Not a lot I would buy. Maybe a new car - a 4-door sedan with all-wheel drive (should I stay in the northern temps) and would go Hybrid :P. I'd buy a nice gaming rig for sure... and maybe put some money to spruce up my condo's furnishings. But that's about it really... I don't need too many toys, and I would rather travel than play with toys at home.
    Isn't it immature that you call him Donald "Dump"?
    I agree, it's childish and stupid - and that's my point. it's meant as a deliberate mockery of his blatant disrespect via using "Crooked Hillary", and thus I can call him "Dump" since he dumps his campaign promises, dumps campaign managers, dumps his wives, wants to dump the first amendment, dumps common-sense war ethics and dumps the use of proper English in favor of a mongrel white-trash dialect.

  4. #84
    Brewmaster redruMPanda's Avatar
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    lump sum no telling what could happen to the economy in the future rather have it all now to spend.

  5. #85
    Quote Originally Posted by NeftBat View Post
    <snip>
    So a lump sum in that case is definitely the better choice.(If you even care about the difference between having $862mil vs $648mil)
    To me, there's no point to getting an additional 200+ Million, particularly via the management headaches I'll incur over the years. I'd rather kick back with a guaranteed 1 mill a year and spend the rest of my years helping others in need.

    ---------- Post added 2011-11-03 at 02:55 AM ----------

    Quote Originally Posted by redruMPanda View Post
    lump sum no telling what could happen to the economy in the future rather have it all now to spend.
    For me, everything I could want right now would probably be a grand total of just under 200k or less. All that would benefit from taking it now would be charities... which isn't really a bad thing - particularly as it could help stimulate the local economy quite a bit. :P
    Isn't it immature that you call him Donald "Dump"?
    I agree, it's childish and stupid - and that's my point. it's meant as a deliberate mockery of his blatant disrespect via using "Crooked Hillary", and thus I can call him "Dump" since he dumps his campaign promises, dumps campaign managers, dumps his wives, wants to dump the first amendment, dumps common-sense war ethics and dumps the use of proper English in favor of a mongrel white-trash dialect.

  6. #86
    Lump sum. Depending on state taxes and how the annuity is set up you usually get about 35-40% of the amount you think you are winning.

    20% split between my each of my parents and gf's parents (5% each)
    10% split between our siblings (we each have 2 so 2.5% each)
    10% split between 20 friends or so (~.5% each)
    10% to charity
    10% to purchases (house, cars, etc)
    15% to long term safe investments (life insurance or annuities or both)
    25% in investments to draw an income off of hopefully for the rest of my life.

  7. #87
    Its pretty simple: Annuity

    Why?

    How many times do you hear about winners pissing their money away? Getting robbed? Swindled? Or worse...? With the annuity, now matter how badly you do with your first years money, no matter how much you piss away or get cheated out of; the next year you are getting another check for the same amount. As to the "Take the lump sum and invest it" theory: Fooie! If you get 100k... 1 million, 10 million a year after taxes - do you really need more money?! And if you do, you can still invest you money if you want. Oh, and if those investments dont pan out - a new big check will be arriving next year... and the year after that, and the year after that... and...

  8. #88
    Quote Originally Posted by mvallas View Post
    To me, there's no point to getting an additional 200+ Million, particularly via the management headaches I'll incur over the years. I'd rather kick back with a guaranteed 1 mill a year and spend the rest of my years helping others in need.

    ---------- Post added 2011-11-03 at 02:55 AM ----------



    For me, everything I could want right now would probably be a grand total of just under 200k or less. All that would benefit from taking it now would be charities... which isn't really a bad thing - particularly as it could help stimulate the local economy quite a bit. :P
    I cant imagine any management headaches I would have with 200mil that I wouldn't have with 1mil a year for the next 30 or so years. To each his own I guess.

  9. #89
    Thank you Nerfbat, I researched some and you were correct, I read a few years ago that the tax rate for above 10 mil a year was 50% federal, can't remember where but researched it again and evidently they were wrong. Learned something new (I thought I already knew) which is always good.

  10. #90
    Quote Originally Posted by bigbadbully View Post
    15% to long term safe investments (life insurance or annuities or both)
    When did life insurance become an investment? Last thing I heard was its, you know, insurance.

  11. #91
    Lump sum, it's how it's payed in Europe. A scottish couple won £166million a few months back ($250 million US dollars) Tax free.

  12. #92
    You get WAYYYYYYYYYYY less money if you take the lump sum.

    But for what I do, I would probably take the lump sum because I would quadruple it quickly.
    "It's clear this is another bash Apple thread. Such things are not conducive to a good discussion."

    WRONG! Those are the BEST discussions!

  13. #93
    Quote Originally Posted by Youarefired View Post
    You get WAYYYYYYYYYYY less money if you take the lump sum.

    But for what I do, I would probably take the lump sum because I would quadruple it quickly.
    If you invest the money from the lump sum it will almost always be worth more than the value of the annuity.

  14. #94
    Lump sum tbh. I'd always be suspicious that if I won a lot of money I'd be assassinated or some shit, so annuity would be a fail. If I won, I'd stash probs about 80% in overseas accounts for family / college money, and then invest in gold / real estate. Get that bread son.

  15. #95
    I'd take the lump sum.

    Spend half, leave other half to collect interest/etc on to hopefull live off.

    Oh and I'd definitely go make it rain in a strip club. I always wanted to do that.

  16. #96
    Quote Originally Posted by Defines View Post
    Lump sum tbh. I'd always be suspicious that if I won a lot of money I'd be assassinated or some shit, so annuity would be a fail. If I won, I'd stash probs about 80% in overseas accounts for family / college money, and then invest in gold / real estate. Get that bread son.
    If you died before the annuity was paid off, they continue to pay out to whomever you leave it to. They pay out till either it is paid off or there is no one lesft to inherit it.

    For me, I would try my best to try and remain anonymous if i had won. If not, I would have my sisters asking me for cash left and right for stuff they don't need to begin with and with my luck, they would still choose to live in places they shouldn't I would have to worry about someone taken hostage for a ransom or something.

    I honestly would be one of them guys who could get a decent house in a nice area and just live out my life, maybe open a business of my own or two. But I would prefer that most people not have a clue what I had in the bank. I don't want to be paranoid when I meet a girl I liked that she likes my wallet more than me.

    Also have a pre-nub setup where if I got married, in the event of a divorce, they lose claim to any money I have, anything I have bought and any interest my money has earned and would bar them from asking for Child Support (would still support my kids though, would be going for custody too) or Alimony . I want to make sure any girl who goes for me for my cash gets nothing when they leave. Sounds cold to even think about stuff like that before you even meet a girl but from what I have seen, it is needed to protect myself. The only way I am giving a girl access to everything is if they have been with me since i had nothing, no coming in at the end and asking for half.

  17. #97
    The Undying Butter Emails's Avatar
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    I've seen lots of mention of putting it in the bank.

    ... you guys realize that FDIC insurance doesn't cover that much money, right?

    If you're going to do anything, annuity or lump sum, invest it in multiple different places.

  18. #98
    I'm an actuarial science major and the answer to this question is, I don't know. Purely based upon you are not defining when the lump sum is being presented and what the taxation rate is (based upon how you're investing.)

  19. #99
    Fluffy Kitten Zoma's Avatar
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    Take the annuity. Helps make sure I don't end up blowing all the money. And for those saying "what if you die?", you still get enough money at a time to buy most stuff you'd want. I doubt people on their deathbed think to themselves, "I could have bought a second yacht if I had taken the lump sum."

  20. #100
    Quote Originally Posted by Aleros View Post
    I've seen lots of mention of putting it in the bank.

    ... you guys realize that FDIC insurance doesn't cover that much money, right?

    If you're going to do anything, annuity or lump sum, invest it in multiple different places.
    Correct, they only insure I think it was up to $50,000 dollars per account or something like that. Any cash you had, you would need to invest into business or government bonds or CDs or something. Just putting them in a bank account is not a good idea.

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