If you won the lottery....
9/9/10, 10:02 PM
#41
I Have No Life
9/10/10, 03:27 AM
#42
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Couple of interesting points in the regional paper. I figured the State just bought an insurance annuity for the annual pmts. And ins annuities suck (fees, loss of control of principle, historically poor return), which is why I posted lump sum.
Sep 9, 7:03 PM EDT
Ore. couple win $15.4M Megabucks jackpot
The husband and wife matched all six numbers on their $6 Quick Pick Megabucks ticket to become winners of the 10th largest Megabucks prize ever awarded.
Hanh and Chinh split the prize right down the middle. Hanh chose the 25 year annuity for her half of the prize and received her first payment of $206,360 after state and federal taxes were withheld.
Chinh chose the cash option, which is a one-time payment equal to half the advertised jackpot, or $2.58 million after taxes in his case.
Ore. couple win $15.4M Megabucks jackpot
Hanh and Chinh split the prize right down the middle. Hanh chose the 25 year annuity for her half of the prize and received her first payment of $206,360 after state and federal taxes were withheld.
Chinh chose the cash option, which is a one-time payment equal to half the advertised jackpot, or $2.58 million after taxes in his case.
If you win the lottery, avoid annuity option
August 02, 2009
DEAR BRUCE: A relative recently won a large sum of money in the lottery. She opted for an annuity. She was told that it's better to take the cash option.
Which choice is better if you're expected to win more than $10 million? — Reader, via e-mail
DEAR READER: Everybody would like to win more than $10 million, but the number that the lottery advertises is not what they're willing to pay. It's what they will pay over a very substantial number of years by purchasing an insurance annuity.
It is almost never a good choice to take the annuity. You're far better off to pay the taxes and have the use of the money immediately.
I would make that information available to your relative. She should also be talking to a very competent accountant who knows current tax laws.
He or she will persuade her that the annuity option is not a good one.
August 02, 2009
DEAR BRUCE: A relative recently won a large sum of money in the lottery. She opted for an annuity. She was told that it's better to take the cash option.
Which choice is better if you're expected to win more than $10 million? — Reader, via e-mail
DEAR READER: Everybody would like to win more than $10 million, but the number that the lottery advertises is not what they're willing to pay. It's what they will pay over a very substantial number of years by purchasing an insurance annuity.
It is almost never a good choice to take the annuity. You're far better off to pay the taxes and have the use of the money immediately.
I would make that information available to your relative. She should also be talking to a very competent accountant who knows current tax laws.
He or she will persuade her that the annuity option is not a good one.
9/10/10, 06:20 PM
#46
Definitely the lump sum - that way you know what you have and can invest it properly to last.
I had a client who won the lottery and it was before the lump sum option. They got their check every January and by June we were putting them on a strict budget to get to the end of the year and the next check. Every year they swore it would be different.
When they won the first thing they did was get rid of the mobile home - and put a double wide on the lot instead. Added a pool, bought cars for each of the kids and a new pick up for themselves to haul the 5th wheel with. Then they each leased new Cadillacs. On the weekends we couldn't figure out how they managed to spend $10,000 in one shopping trip to the local K-Mart. We tried to explain to them with 4 years to go on the annual payments if they didn't change up very quickly they would be filing for bankruptcy in 5 years because they saved nothing and couldn't afford to make the lease payments on the Cadillacs or to pay for all the car insurance for themselves and for all 5 kids cars. Wouldn't listen.
I had a client who won the lottery and it was before the lump sum option. They got their check every January and by June we were putting them on a strict budget to get to the end of the year and the next check. Every year they swore it would be different.
When they won the first thing they did was get rid of the mobile home - and put a double wide on the lot instead. Added a pool, bought cars for each of the kids and a new pick up for themselves to haul the 5th wheel with. Then they each leased new Cadillacs. On the weekends we couldn't figure out how they managed to spend $10,000 in one shopping trip to the local K-Mart. We tried to explain to them with 4 years to go on the annual payments if they didn't change up very quickly they would be filing for bankruptcy in 5 years because they saved nothing and couldn't afford to make the lease payments on the Cadillacs or to pay for all the car insurance for themselves and for all 5 kids cars. Wouldn't listen.
9/10/10, 08:01 PM
#47
Legacy TMS Member
9/10/10, 09:31 PM
#48
Mach 1 Member
Join Date: October 3, 2004
Location: South Jersey
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Pure gold!I'd take the lump sum.
Enough to retire: Travel the world. Slowly and comfortably.
Otherwise: Really nice house and property, toys, and lavish ways for me and my friends/family to enjoy ourselves while not working.
Hooking up family and friends as best as possible is a given!
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