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How are annuities created and paid?Reply
From the powerball.com FAQ page--- WHY IS THERE A DIFFERENCE BETWEEN THE CASH PAYOUTS IN THE POWERBALL AND MEGA MILLIONS GAMES? There used to be a larger difference between the two games, but the Mega Millions game was recently changed to mirror the Powerball annuity option. The difference (spread) between the cash and annuity jackpots amounts are now about the same. Both games offer an annuity that pays out in 30 payments over 29 years (the first payment is immediate). Both annuity optio
Feb 20, 2016, 11:11 pm - ArizonaDream - Lottery Discussion Forum

Do you think Powerball will go to a billion dollars?Reply
well conservative to say 700M tickets With the old matrix about 64 cents from each ticket went to the jackpot prize pool. That's close enough to the cash/annuity ratio that figuring each dollar of advertised annuity required selling one ticket was a really simple way of being fairly close to the real number. I knew they changed that figure a bit with the new matrix, but I just double checked and it's a bigger change than I thought. Each ticket now contributes about 68 cents towards the jack
Dec 31, 2015, 11:56 pm - KY Floyd - Jackpot Games Forum

Big reduction in PB cash value
Has anyone else noticed a big reduction in the cash value of Powerball? When the jackpot had annuity of $127 million, the cash value was $77.3 million. The following draw the annuity went up $22 million while the cash value gained $13.4 million making it $90.7 million with an increase of 60.9%, the upcoming drawing raised the annuity $22 million up to $171 million but the cash value added $11.3 million to sit at $102 million thereby only increasing 51.3%. How can the percentage change be s
Sep 15, 2014, 4:38 pm - Skibunnylk - Lottery Discussion Forum

Why not choose the annuity?
Someone won 1 million on a scratch off down the street from my house. He chose the cash option and the prize dropped to 600,000. After taxes he only took home a little over 400,000. First off, I didn't know the highest prizes on scratch tickets had a cash option. But I am surprised the amount can drop so drastically. So in this situation would you choose annuity? Or why wouldn't you choose annuity and take the much lesser amount?
Aug 1, 2014, 8:21 am - MsNumberDreamer - Lottery Discussion Forum

Why Do You Think Lottery Winners Always Take The Cash Option?Reply
Wow, so we've moved from reasons to choose cash over annuity to name calling, mud slinging and political diatribe. How about everyone agree to disagree and get back to the actual point. To that end, very good points LottoMetro. Between history and the numbers, you get less in the long run taking the annuity. And for those who think annuity payments mean that bankruptcy is unlikely because you don't have access to all the money upfront, that's a fallacy. JG Wentworth has made a lot of money f
Feb 11, 2014, 11:31 pm - Teddi - Lottery Discussion Forum

TAX... lower tier prizesReply
Mike was talking about Uncle Sam, meaning the IRS/Feds, and that is the same for all states. Also was referring to Mega Millions, which is a jackpot game with cash and annuity options. For a jackpot game with annuity and cash option, you have up to 60 days to choose your payment option, and at that point your are actually paid. So for instance if you won Mega Millions JP in October 2013, but claimed in January 2014, your winnings would be in 2013 because your choice expired and you had automa
Dec 10, 2013, 12:54 pm - Jon D - Lottery Discussion Forum

TAX... lower tier prizesReply
Actually, the winnings are taxable in the year in which you are paid, not the draw date. So if you win the 12/31/13 draw, your winnings would be counted for 2014. But there are limits, such as 60 days to choose the annuity or cash option. From the W-2G instructions: A payment of winnings is considered made when it is paid, either actually or constructively, to the winner. Winnings are constructively paid when they are credited to, or set apart for, that person without any substantial limit
Dec 10, 2013, 9:55 am - Jon D - Lottery Discussion Forum

Can MM & PB Start Being Honest? Must this farce continue?Reply
Hot Lotto just switched to an all-cash jackpot where the amount they advertise is the amount you win. Honestly, it doesn't bother me at all to have the annuity amount advertised. Within a few days of starting to play the lottery I had it figured out that because of my choice to take the cash option I would receive the amount they would have to invest to pay out the annuity. If they advertised the cash amount, you know someone will start whining that they didn't know the annuity was higher
Jun 18, 2013, 11:30 am - HoLeeKau - Lottery Discussion Forum

$475 MILLION: Powerball jackpot nears a half-billion dollarsReply
First of, I respect everyone's opinion on whichever payout he/she chooses. Those who think that the annuity may be best for them may want to consider that it's paid out over 30 years and is heavily back end loaded. We all have no idea what inflation or how high taxes will go. I personally would advise any of my clients to choose the lump sum. Any competent, well seasoned money manager can offer much better returns than what the annuity pays out. Many individuals who have opted for the annuity
May 16, 2013, 3:48 pm - Jill34786 - Lottery News

Annuity or Lump Sum?Reply
And paying taxes (which have a higher chance of rising than they do falling) on the annuity during the whole time along with being at the mercy of the state it was won. You can beat out the annuity with low risk investments of your own. For the most part the annuity really is for suckers. The idea that it's safer has proven in the past that you can get into just as much or even more trouble with the annuity. Now if it was some For Life contest then taking the yearly payments might not be a
May 13, 2013, 8:44 am - DC81 - Lottery Discussion Forum