Annuity vs Cash Value

Reply #57

TheMeatman2005 — Sun, 11 Sep 2016 20:12:50 GMT

You lose a big chunk of cash by taking the lump sum on for-life games, but it's worth it since you never know how much longer you have to live.

Reply #56

LottoAce — Sun, 11 Sep 2016 20:09:08 GMT

Depends on the amount. 25,000 a year prize for life, I take the payments.

5 million or more, I take the lump sum.

Reply #55

Murgatroyd — Tue, 06 Sep 2016 01:35:05 GMT

Just get your lawyer to draw up a standard do not contact me again letter to send to these leeches.

Reply #54

cec4652 — Sun, 04 Sep 2016 01:51:02 GMT

ALWAYS take cash value,then pay your full amount of taxes due.When you taker an annuity you WILL get hounded by the 'J G Wentworth creeps that find your UNLISTED number and hound you for years! They send you t shirts,credit cards,checks and more.They aren't any good,til you call these thieves and agree to get scammed by selling them a portion of your annuity.NEVER,start buying big ticket items too soon.With a 7 figure win,they will offer you credit and even those from 'My lottery dream home;will... [ More ]

Reply #53

mypiemaster — Sun, 14 Aug 2016 03:42:06 GMT

Well said

Reply #52

mypiemaster — Sun, 14 Aug 2016 03:39:01 GMT

That pretty much says it all.

Reply #51

One-Day — Fri, 12 Aug 2016 19:55:02 GMT

Well, Mark Cuban said idiots who don't have their ducks in a row in the financial department prior to winning the lottery, choose the lump sum and risk losing it all to those in suit and tie, including their life, marriage, etc.. due to stress, worry, inexperience. Barbara Corcoran suggests you put all your money in one bank account and not worry about the $250K limit while you are figuring things out; that your bank won't ever fail.

And no dude, Portland is the total opposite you describe... [ More ]

Reply #50

TheMeatman2005 — Wed, 10 Aug 2016 02:32:55 GMT

You can look, but don't touch

Reply #49

Unluckyone — Thu, 04 Aug 2016 17:18:32 GMT

Show me the money

Reply #48

dognabit — Wed, 03 Aug 2016 22:18:35 GMT

Thank you, I was unaware of that. But still, I would invest some of it into a retirement type of fund.

Reply #47

TheMeatman2005 — Wed, 03 Aug 2016 21:14:41 GMT

You're welcome

Reply #46

DELotteryPlyr — Wed, 03 Aug 2016 10:42:49 GMT

WOW!!

So first, thanks for the info.

Second, the comment of 'players expressed concern about the cost of living increase' is a bunch of CRAP!! They dont do anything that doesn't benefit THEM. They are just using that as an excuse for doing it.

If you are living 'paycheck to paycheck' and your paycheck is $500,000 -- SHAME ON YOU

Reply #45

purpleheart — Wed, 03 Aug 2016 03:08:32 GMT

Investments to an IRA can only be from earned income (work) and are subject to an annual limit, $5500 for 2016, per IRS rules. The contribution also can't be more than your earned income up to annual limit.

Hope I said this correctly...

Reply #44

dognabit — Wed, 03 Aug 2016 02:23:16 GMT

It depends on how big of a drop-off from jackpot amount to take home after taxes. Say the jackpot was $3 million and after cash option/taxes you take home around a million. I'd be tempted and take the annuity and invest a chunk of it a year into a IRA and use the rest to save up for a house . Work a few years and save some more and retire maybe a decade down the road.

Reply #43

aux8b — Tue, 02 Aug 2016 21:03:22 GMT

Check Please

Reply #42

TheMeatman2005 — Tue, 02 Aug 2016 21:01:07 GMT

Taken from: http://www.megamillions.com/difference-between-cash-value-and-annuity

Difference Between Cash Value and Annuity

If you win a Mega Millions jackpot, you will choose how to be paid: Cash Option or Annual Payout. Prize claim parameters vary from state to state. Contact your Mega Millions lottery for detailed information.

Annuity option: The Mega Millions annuity is paid out as one immediate payment followed by 29 annual payments. Each payment is 5% bigger than the previous on... [ More ]

Reply #41

DELotteryPlyr — Tue, 02 Aug 2016 20:19:47 GMT

TIME-OUT!!!!!

I just looked at the Mega Millions annuity payout schedule (30 annual payments) Powerball also.

I am 100% incorrect with what I said above!!!

I was under the understanding it was 30 equal payments. WOW!! They start with paying 1.5% on the first payment (my rough estimate) and finish with 6.2% of the principle.

So the biggest issue I can see with the annuity is what happens if the federal government INCREASES the tax rate? It was as high as 50% back in 1986 (30 yrs ag... [ More ]

Reply #40

DELotteryPlyr — Tue, 02 Aug 2016 20:00:14 GMT

What are you talking about??? If the payments are the same how is it BACK-END heavy?

Are you trying to factor inflation in? That will depend on what you do with the lump sum money to compare to the annuity.

Reply #39

maxodds — Mon, 01 Aug 2016 14:26:30 GMT

For the first win I would take the Lump sum, but for subsequent winning I might opt for the annuity.

Reply #38

C0w Pi3 — Wed, 27 Jul 2016 00:41:13 GMT

I'd take the annuity since i'm only 25 but either way this would be a nice problem to have

Reply #37

TheMeatman2005 — Wed, 27 Jul 2016 00:26:23 GMT

I have always said that if you are below 40-45 years old that the annuity is better than taking cash value since it will provide a nice income for the next 29 years.

But, if you are older than 40-45 years old, you would be wiser to take the cash. Depending on how much older than 40-45, you don't know how long you will live and may not live long enough to collect all the payments. Plus, if you die before collecting the last payment, it will leave your heirs responsible for the estate tax. That... [ More ]

Reply #36

spencerjames — Mon, 25 Jul 2016 22:57:12 GMT

I think it depends on the terms. Here in Washington we have a $30 ticket where top prize is $2 million paid at $80,000 for 25 years or you can take $750,000 lump sum. Now seriously in that case the best option is the annuity.

But if its $1 million paid at $50,000 for 20 years or $700,000 cash now then you take cash now.

Its depends on the terms, which arent always the same or even close to the same.

I would bet in most cases, the best move is the annuity. Now to mention everything think... [ More ]

Reply #35

GYM RICE — Mon, 25 Jul 2016 21:45:03 GMT

I would take the lump sum and then set up my own Annuity with the lump sum payment...That way you could take whatever you want up front(5-10%) to buy your Estate and everything that goes with that with cash. Then collect a weekly or monthly or yearly check off your Annuity you set up...That way you're locked in to whatever the tax rate is when you collect the lump sum. I can't imagine any situation in America where the tax rates drop. They imop are only going to go up...Take your tax hit now wit... [ More ]

Reply #34

Sunglasses — Mon, 25 Jul 2016 15:39:11 GMT

Annuity or cash value, I say take them both

Reply #33

waryman — Sun, 24 Jul 2016 05:15:59 GMT

Just remember that the payout for the annuity is back-end heavy. For powerball, you would literally get 50% of the money during the last 10 years of the 30 year payout timeline. So you would have to deal with 20 years of inflation before you get half of the of your money and another 10 years to get the other half.

Reply #32

music* — Sun, 17 Jul 2016 17:57:13 GMT

Just be forewarned about those factoring companies like JG Wentworth and others. They will contact you. A phrase you could use is, NO Action Here . A fellow poster recommended Ed Ugels' book. He was one of those factoring employees and told us what they did to annuity winners. Those companies are not charities.

Reply #31

music* — Sun, 17 Jul 2016 17:47:52 GMT

Whomever is asked for professional advice they will welcome you with open arms and a smile.

Reply #30

TheMeatman2005 — Sun, 17 Jul 2016 16:17:29 GMT

Even if you opt for the annuity payments, you should still get professional financial advice.

Spend some, save some.

Reply #29

rustysmom — Sun, 17 Jul 2016 14:33:11 GMT

i think pymts. i'm bad at saving,know nothing about investing. as long as i had enough to pay off all my bills, and live comfortably.

Reply #28

Shelby Mustang — Sun, 17 Jul 2016 14:18:47 GMT

Lol mine is Miami. I love to buy a nice house near or even on the beach big enough for family to come visit and just be able to travel when I feel like it

Reply #27

Kingofearth — Sun, 17 Jul 2016 05:42:44 GMT

Your point being? There's a reason no one lives in no tax places like Wyoming and South Dakota.

Reply #26

Kingofearth — Sun, 17 Jul 2016 05:36:13 GMT

Nah, I'll plant a lot of them though. Also now is a good time to buy property in Madison before it becomes beach front property next to the expanded Great Lakes.

Reply #25

Rexer90 — Sun, 17 Jul 2016 05:25:22 GMT

Taxation hell.......

Reply #24

KY Floyd — Sun, 17 Jul 2016 01:11:55 GMT

Does that means that if bond rates go even lower the $10 bill in my wallet will turn into a $20

Reply #23

realtorjim — Sat, 16 Jul 2016 22:19:11 GMT

Also, the bond rates are at ridiculously low levels raising the cash value

Reply #22

LiveInGreenBay — Sat, 16 Jul 2016 20:33:54 GMT

Don't forget to hug a tree while you're there.

Reply #21

Teddi — Sat, 16 Jul 2016 20:17:28 GMT

I don't care what the person's age or circumstance is, opting for a 30 year backweighted annuity considering America's taxation history and a global financial system which becomes more interconnected and more turbulent by the week, is insanity.

Anyone winning the CV tonight will end up with a minimum of $100 million. If someone actually thinks that they'd rather have the annuity so in case they make a bad investment they don't lose the $100 million all at once, isn't someone with the financi... [ More ]

Reply #20

ressuccess — Sat, 16 Jul 2016 19:22:11 GMT

I rather take the lump sum as my vote because I need to live in another city if I win a jackpot.

Reply #19

weshar75 — Fri, 15 Jul 2016 23:24:50 GMT

I will take the cash and run.-weshar75

Reply #18

Kingofearth — Fri, 15 Jul 2016 22:54:48 GMT

If i win, i really want to move to Portland Oregon. Hipster city with a large population of liberals and leftists and in a safe blue state but not too big so i can enjoy the small town advantages. Never too hot or cold. Portland is my dream city.

Reply #17

music* — Fri, 15 Jul 2016 21:54:58 GMT

British Columbia, Canada is nice year round. I also agree that taxes will go up here in the U.S.

Reply #16

Kingofearth — Fri, 15 Jul 2016 02:49:41 GMT

I fear no tax rate, but dictators are another story. Trump isn't a dictator, but his uncaring attitude about balance of powers and authoritarian framework are scary precedents that could lead to a dictator rising in the next 20 years. American democracy is very fragile, it's not hard to see it break. I have 5 main countries that I would move to (Canada, Britian, Israel, Australia, or New Zealand).

Reply #15

TheMeatman2005 — Fri, 15 Jul 2016 01:49:58 GMT

I just noticed my typo...I must have been out of whit when I typed with.

Reply #14

noise-gate — Fri, 15 Jul 2016 01:29:14 GMT

You know what Cuba is saying...

Reply #13

Coin Toss — Fri, 15 Jul 2016 00:18:27 GMT

Cash.

How many winners have taken their annuity and sold it eventually to a need-cash-now company?

What did a house cost 30 years ago and what do they cost now?

Due to inflation the actual value of an annuity shrinks every year.

Reply #12

LottoLucy — Thu, 14 Jul 2016 23:56:42 GMT

Lump sum! I used to have a complicated set of variables that determined what I would do but after seeing people not get paid because of budget issues with their state I decided I want the money upfront and in my pocket

Reply #11

John99 — Thu, 14 Jul 2016 23:43:39 GMT

Gimmie the lump sum... One shot and I'm out.

It's at least a nice day dream here and there...

Reply #10

ArizonaDream — Thu, 14 Jul 2016 23:43:22 GMT

For a lower jackpot, no.

Once the jackpot gets as large as the current PB, I start thinking about the annuity.

I'm not young, but the life expectacy tables say I'm likely to live long enough to collect it all.

but there are 2 big reasons the answer is still no.

Taxes are far more likely to go up than down in the future. Locking in the current low interest rate with a 29 year investment just doesn't make any sense.

Reply #9

glisit3000 — Thu, 14 Jul 2016 22:17:58 GMT

ill take the annual payment. if i mess up one year i have many more payments to look forward to . if i mess up one year with the lump sum. Thats it.

Reply #8

QuickDrawDude — Thu, 14 Jul 2016 22:16:08 GMT

I would take the lump sum and throw it into an S P 500 Index fund.

Reply #7

Tatototman65 — Thu, 14 Jul 2016 21:40:28 GMT

Lump sum please...

Reply #6

Elliptic7 — Thu, 14 Jul 2016 20:48:05 GMT

I see both options having benefits: Much depends on the persons age, if they want leave an inheritance, the life style they see themselves as having, their current financial status, tax considerations, the amount of the jackpot, and their ability to invest sensibly,

The 30 year graduated annuity is pitiful but could be a better choice depending on the particulars. The 20 year evenly distributed annuity of years ago was much better. Most people playing would likely want to get started with as

Reply #5

LiveInGreenBay — Thu, 14 Jul 2016 20:14:05 GMT

But but but I thought you were a committed leftist? I thought you wanted a much higher tax rate for the rich to pay for the poor? So why would you leave? LOL! I hear Venezuela is nice this time of year.

Reply #4

Kingofearth — Thu, 14 Jul 2016 19:59:59 GMT

That's my main reason for why i would choose cash. If i win and things get tough, I'm not just moving my money off shore, I'm moving my body off shore.

Reply #3

LiveInGreenBay — Thu, 14 Jul 2016 18:57:33 GMT

I chose the lump sum. A bird in the hand is worth two in the bush. A lot can happen in 20 years. Politically and economically things seem to be getting screwier and screwier every year. What happens if things go south and the government decides to confiscate annuity funds? Look at the national debt, 20 trillion and counting. Wouldn't hurt to move some of that money to off-shore accounts.

Reply #2

music* — Thu, 14 Jul 2016 17:49:50 GMT

At this time in my life, I will take the cash. The factors in my decision are the interest rate, my age, my health, plans to share with others, plans to invest, not having to talk with those factoring companies who want to buy my annuity, and to celebrate life

Reply #1

Kingofearth — Thu, 14 Jul 2016 17:48:03 GMT

I'm leaning towards taking the Annuity at the moment though I really don't know because the variables will change and so I would have to look at the situation when it happens before I decide.

Annuity vs Cash Value

TheMeatman2005 — Thu, 14 Jul 2016 16:58:47 GMT

Whit the low interest rates available today, the cash value is approximately 71% of the annuity jackpot amount.

Which would you take if you won a jackpot