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Old 04-03-2018, 01:06 PM
 
5,008 posts, read 6,691,539 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.
I think some people may not want to become so rich quite so dramatically in an instant - they may be unsure how it is going to change them or worried about blowing through the money or having it all taken from them at once in some lawsuit, worried about how people will interact with them, etc. Age/health/dependents may also be factors. If you do not get a lump sum, you can have an easier excuse for turning down requests from family, etc., for cash. For example, someone may want you to pay for their college - easier to say no, maybe, if you don't have the whole amount just sitting there doing nothing. You can also count on the money to last a certain amount of time rather than you blowing through it. It may not discourage all frivolous lawsuits but it might help prevent some. At some point, for many people, it makes no difference whether the total money is, say, $5 million vs. $10 million since both are more than they will ever really need.
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Old 04-03-2018, 01:16 PM
 
400 posts, read 121,524 times
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Quote:
Originally Posted by MinivanDriver View Post
There's no way I'd take an annuity.

First, if I died, the inheritance taxes on the total of the lottery winnings would immediately come due to my heirs. There have been cases of this.

Second, especially when you look at a state such as Illinois delaying payments on lottery payouts, I wouldn't trust the government in the future to make its payment to me.

Third, I'd rather have the lump sum just in case I decided to ever leave the country.
I have always preferred the annuity if it came to that, but all three of your points just sold me on the lump sum.

I would just have to have the discipline to hire a good advisor so I don't become one of those who **** it all away.

Not that I foresee this becoming a concern, since I rarely ever play the lottery.
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Old 04-03-2018, 01:46 PM
 
Location: Aurora Denveralis
3,078 posts, read 1,040,161 times
Reputation: 3930
Quote:
Originally Posted by AlDente67 View Post
INot that I foresee this becoming a concern, since I rarely ever play the lottery.
The odds of winning the lottery are the same whether you buy a ticket or not. (Sontag? Didion? Liebowitz?)
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Old 04-03-2018, 01:51 PM
 
5,445 posts, read 4,406,571 times
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I would take the lump sum and it has nothing to do with taxes. I just don't trust the government to have my money 30-40 years from now.
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Old 04-03-2018, 02:04 PM
 
Location: Connecticut
24,603 posts, read 40,176,096 times
Reputation: 6966
Quote:
Originally Posted by otowi View Post
I think some people may not want to become so rich quite so dramatically in an instant - they may be unsure how it is going to change them or worried about blowing through the money or having it all taken from them at once in some lawsuit, worried about how people will interact with them, etc. Age/health/dependents may also be factors. If you do not get a lump sum, you can have an easier excuse for turning down requests from family, etc., for cash. For example, someone may want you to pay for their college - easier to say no, maybe, if you don't have the whole amount just sitting there doing nothing. You can also count on the money to last a certain amount of time rather than you blowing through it. It may not discourage all frivolous lawsuits but it might help prevent some. At some point, for many people, it makes no difference whether the total money is, say, $5 million vs. $10 million since both are more than they will ever really need.
I remember reading about a Chicago area couple who won $30 million. They kept it secret from EVERYONE by having an attorney claim the prize. They had kids in high school and they did not want them to assume they were rich and did not have to do anything for the rest of their lives. They were going to wait until the kids were out of college with jobs to tell them. My kids were about the same age but I still had to remind them we did not live near Chicago. Not sure what happened to that couple. Jay
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Old 04-03-2018, 02:27 PM
 
Location: Honolulu, HI
4,634 posts, read 1,156,512 times
Reputation: 6625
Always take the lump sum. Always.

You can’t trust the govnement or state lottery to keep paying you decades down the road. And you could’ve used that withheld money for profitable investments or a trust. Take the lump sum, put it in a trust, live off the interest.
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Old 04-03-2018, 03:08 PM
DKM
 
Location: Thousand Oaks, CA
2,060 posts, read 676,534 times
Reputation: 2215
People take the annuity because they go to investment planners who sell them on the idea that the lump sum will make them more money. It makes the salesmen more money, guaranteed...
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Old 04-03-2018, 03:13 PM
 
17,634 posts, read 12,234,437 times
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Do state governments actually managed the annuity payments or do they or the lottery simply use the lump sum payment to purchase an annuity?
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Old 04-03-2018, 04:17 PM
 
Location: Aurora Denveralis
3,078 posts, read 1,040,161 times
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Quote:
Originally Posted by DKM View Post
People take the annuity because they go to investment planners who sell them on the idea that the lump sum will make them more money.
...how's that?
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Old 04-03-2018, 04:27 PM
 
7,188 posts, read 2,506,091 times
Reputation: 3171
Age & health make a difference in the decision. Want that big payout immediately versus knowing you would blow it all and end up just as poor in a year or two. Wanting to figure out ways to shelter the annual income to reduce tax burden, versus just paying it and getting it over with. Some people don't trust that the payouts will actually happen as the years go by, so they want it all now. There are as many reasons as there are winners.
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