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Old 04-03-2018, 10:14 AM
 
17,605 posts, read 12,197,156 times
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Quote:
Originally Posted by Nov3 View Post
One word: Taxes!

Seriously states are increasing their 'catch' of profits by taking more each year little by little . What may be a 6% one year will be 9-12% by year 12 of the annuity. The feds get upfront and be done. Not so true for states.
Take YOUR money and run. Get your necessities and be done with 'investing' or giving YOUR money to corps in the stocks. They'll tax your profits...so why even go there.
Because you are making money in that case? Why wouldnít you want to go there?
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Old 04-03-2018, 10:40 AM
 
3,961 posts, read 1,590,532 times
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Quote:
Originally Posted by Nov3 View Post
One word: Taxes!

Seriously states are increasing their 'catch' of profits by taking more each year little by little . What may be a 6% one year will be 9-12% by year 12 of the annuity. The feds get upfront and be done. Not so true for states.
Take YOUR money and run. Get your necessities and be done with 'investing' or giving YOUR money to corps in the stocks. They'll tax your profits...so why even go there.
Overseas investments if you can.
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Old 04-03-2018, 11:13 AM
 
1,842 posts, read 1,163,771 times
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Quote:
Originally Posted by Trishim View Post
I get you don't get the entire amount for various reasons, but it's still a lot especially at the higher levels.
Most people do take the lump some.
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Old 04-03-2018, 11:27 AM
 
Location: Proxima Centauri
3,754 posts, read 1,591,896 times
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Quote:
Originally Posted by artillery77 View Post
You get less if you take the lump sum, and pay more in taxes assuming tax rates are steady.
Quote:
Originally Posted by Lowexpectations View Post
This ignores the time value of money
The government takes the time value of an annuity into account when it calculates the lump sum.

Then you pay taxes on the lump sum which is somewhere between 36 and 40%.
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Old 04-03-2018, 11:32 AM
 
Location: Copenhagen, Denmark
9,864 posts, read 8,000,104 times
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Quote:
Originally Posted by artillery77 View Post
You get less if you take the lump sum, and pay more in taxes assuming tax rates are steady.
I wouldn't be surprised if the present value of all the options are about the same.
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Old 04-03-2018, 11:37 AM
 
Location: Over yonder a piece
3,758 posts, read 4,291,481 times
Reputation: 5977
I would create a trust that would pick up the prize (in my state that's allowed), and then have the trust pay out a percentage to me every year. This would I couldn't overspend it. Let's say my take-home after taxes is $100M. Pay me 2% every year while having it earn 4%, and I'd never run out of money but would live quite nicely on 2M a year...
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Old 04-03-2018, 11:42 AM
 
121 posts, read 37,584 times
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Perhaps for protection. A lot of lottery winners end up broke only a few years later. With the annuity they guarantee they will always have money coming in.
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Old 04-03-2018, 11:45 AM
 
Location: Aurora Denveralis
2,961 posts, read 1,012,279 times
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Why is there any assumption that someone... of a mindset to play the lottery, let's phrase it... would be likely to make sensible financial choices upon winning?
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Old 04-03-2018, 12:19 PM
 
Location: S.W. Florida
1,685 posts, read 664,786 times
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I donít play the lottery, but if I did and were to win several million dollars,I would take the lump sum in a heartbeat. When youíre in your 60ís that just what you do!
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Old 04-03-2018, 12:20 PM
 
17,605 posts, read 12,197,156 times
Reputation: 12821
Quote:
Originally Posted by Tonyafd View Post
The government takes the time value of an annuity into account when it calculates the lump sum.

Then you pay taxes on the lump sum which is somewhere between 36 and 40%.

The govt isnít going to value it the same way I am. Certainly not when comparing annuities with all available investment options
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