You won the lottery! Annuity or Lump sum?

[Darsithis]

Winning the lottery will virtually end your life socially and economically with the majority of people.

That's true. I'm happy with my salary, but who wouldn't want to have more money? Then I think about all the people that already ask me for money...it would just be doubled. And how to do you avoid rubbing it into people's faces? No, it's not worth winning the lotto. It's just not.

[voorshwa]

I would go with the Annuity so I don't lose as much in taxes and lawyer fees.

Then I'd immediately go to JG Wentworth and have them pay me the real lump sum of the whole amount.

It's my money, GONNA USE IT WHEN I WANT TO!!!

Bob

[Sunseeker]

Then your cash is worthless. Cash is only as good as the faith in the backing (our government). If you really worried about that, buy gold and things that will be in short supply.

I think you missed the point. The idea is to spend it all in one go.

[JSStryker]

Winning the lottery will virtually end your life socially and economically with the majority of people.

I have to agree, once you've won the lottery, you'll have friends and family you never knew you had.

[Sunseeker]

I have to agree, once you've won the lottery, you'll have friends and family you never knew you had.

that's why u gotta spend it all on yourself! Because you don't want your family to think you're a greedy bastard, you want your family to KNOW you're a greedy bastard!

[Prokne]

It depends on the amount won which is better to take. If the jackpot is small you wont get a lot per year and inflation will make it even less, better to get a lump sum and invest or pay off debt. If the jackpot is large you will get a large yearly payment that can also be invested and you will end up getting the whole amount provided you are still alive and the lottery has the money.

The correct answer is just to not waste the money buying stupid stuff like expensive cars and mansions, gambling in Vegas. Invest it then use the capital gains to buy what you want then you will always have that huge portfolio to fall back on in an emergency.

[Pancha]

Lump sum. Would throw it into a savings account with an monthly maximum out-take. But I'm one of those saving every penny, rarely wasting it. Is WoW a waste?

[Garganchewin]

Unfortunately after you pay the massive witholdings on the lump sum they end up around 1/3 of the total annuity depending on the state. With most of them running on 20 year annuity plans, and assuming its paying at an even rate (no large payout at the end of the 20), and assuming inflation says around 2% for the 20 years,the lump sum investment would need to net you a 200% return on the initial investment. This is assuming you don't invest the annuity payments, which any reasonable person would.

Considering one side carries significant risk, and the other does not, I don't think it's nearly as clear cut as most of you are suggesting.

[NeftBat]

I have to agree, once you've won the lottery, you'll have friends and family you never knew you had.

You don't have to tell anyone you won.

[retrofade]

I would go with the Annuity so I don't lose as much in taxes and lawyer fees.

Then I'd immediately go to JG Wentworth and have them pay me the real lump sum of the whole amount.

It's my money, GONNA USE IT WHEN I WANT TO!!!

Bob

Great, now I have their stupid opera commercial stuck in my head. THANKS A LOT!

[chrisxnickel]

take 15% of the lump sum to spend after you turn 75, because at that point you should have all your crazy spending out of the way

take the remaing 85% and devide by the # of years till you are 75..... in most cases it will be more than 1 mil a year... if you cant live off that then there is probably no hope for you

[Maharishi]

You don't have to tell anyone you won.

"Dude is that an Aston Martin?"


..."uh no"

It'd be pretty hard to hide the fact you won the lottery without going to ridiculous lengths like working at your now unneeded job.

I'd start a company and give all my friends jobs.

[retrofade]

Unfortunately after you pay the massive witholdings on the lump sum they end up around 1/3 of the total annuity depending on the state. With most of them running on 20 year annuity plans, and assuming its paying at an even rate (no large payout at the end of the 20), and assuming inflation says around 2% for the 20 years,the lump sum investment would need to net you a 200% return on the initial investment. This is assuming you don't invest the annuity payments.

It's not nearly as clear cut as most of you are saying.

But there's no guarantee that inflation will stay anywhere near 2% either. I'd rather have the money up front, even thought it's about 75% of the full amount, minus federal taxes and state taxes (if you have them, California doesn't tax lottery winnings). Then you have the money and you can use it to invest or do whatever you want with it. Having the annuity payments might make sense if you trust in the long-term viability of the lottery itself or the government as a whole. But 20 years is a long time to be dependent on any organization to stand by their word when you really stop and think about it. There's way too much volatility in the economic world right now. So to me, having the money up front seems to be the more prudent choice to me. Especially when you can invest a portion of that money in gold in order to at least partially defend against a monetary collapse.

[Lilymist]

Annuity...

[Ägallar]

It's actually a common misconception that taking the lump sum nets less money - just as a side note. Just casually reading the payment information, you'll see that either way you are taxed equally (25% of the total amount, plus another 3.7% in Michigan for fees, etc) right off the bat.

And assuming you spend some of the money, you won't pay as much yearly for your interest as you would for a lifetime of payments.

ON TOPIC: I would take the lump sum, buy a large amount of physical wealth (land, gold/precious metals, etc) in the unlikely event of an economic collapse, and then invest in making myself more learned.

I think I would focus first on learning as many languages as I could, then donate my time to charities and NPO/NGO's.

Did I forget to mention I would own any and everything I wanted? Yeah, that too.

[retrofade]

"Dude is that an Aston Martin?"


..."uh no"

It'd be pretty hard to hide the fact you won the lottery without going to ridiculous lengths like working at your now unneeded job.

I'd start a company and give all my friends jobs.

You just say that you've gone into business for yourself as a consultant or something. Then you're prudent with you're money and don't necessarily buy things that seem to be way above your perceived income.

[Ägallar]

"Dude is that an Aston Martin?"


..."uh no"

It'd be pretty hard to hide the fact you won the lottery without going to ridiculous lengths like working at your now unneeded job.

I'd start a company and give all my friends jobs.

It's not just that you would suddenly have material things but that most all lottery winnings are reported by the media (even if it's just a local paper). I believe in Michigan there is a law requiring them to be published so that debtors can't duck lenders.

[marixis]

Winning the lottery will virtually end your life socially and economically with the majority of people.

Hrmm... so whats the downside?

[JSStryker]

You don't have to tell anyone you won.

If I recall the Lottery Commission will announce your name.

[anveena]

Lump sum, because you never know when you're gonna die.