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View Poll Results: Winning the lottery - Cash or Payments?
Lump Sum (cash) 26 70.27%
Annual Payments 11 29.73%
Voters: 37. You may not vote on this poll

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Old 12-10-2008, 01:21 PM
 
Location: NE San Antonio
88 posts, read 421,715 times
Reputation: 71

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Would you rather take the lump sum (cash) or 20+ years annual payment option for a HUGE lottery jackpot? Explain why ...

Currently the estimated jackpot for MegaMillions is $207,000,000.

Mega Millions Official Home
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Old 12-10-2008, 03:03 PM
 
Location: Boston
1,125 posts, read 4,013,682 times
Reputation: 491
lump sum always.
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Old 12-10-2008, 03:15 PM
 
Location: Up in the air
19,126 posts, read 25,812,859 times
Reputation: 16226
Lump sum, put some of it in a high yield savings account and 'pay' myself monthly from that. The rest can go into investments of some kind, which of course would depend on the market (real estate/business etc.)
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Old 12-10-2008, 04:33 PM
 
Location: Brooklyn
40,057 posts, read 29,737,967 times
Reputation: 10455
I don't know how other states structure their lotteries, but it turns out that in New York, if you take payments rather than a lump sum, you wind up with less money overall. The state is pretty slick when it comes to taxation.
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Old 12-10-2008, 07:12 PM
 
Location: Orange, California
1,572 posts, read 5,513,018 times
Reputation: 718
Quote:
Originally Posted by Fred314X View Post
I don't know how other states structure their lotteries, but it turns out that in New York, if you take payments rather than a lump sum, you wind up with less money overall. The state is pretty slick when it comes to taxation.
That doesn't sound right. Typically, a $220 million dollar lottery contemplates that the $220 million will be paid out, annuitized, over 30 years or some such term. Of course, it is taxed with each payout. If you choose the lump sum, however, you start out with a lump payment of around $150 million (b/c the advertised lottery amount is predicated on the total annuity payment) and THEN you pay taxes on the $150 million, which knocks you down to around $90 million after taxes.

Regardless, $90 million is nothing to sneeze at. And I would definitely go lump sum. Always.
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Old 12-10-2008, 07:50 PM
 
Location: Salt Lake City, Utah
7,731 posts, read 11,951,939 times
Reputation: 5939
Lump sum.
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Old 12-11-2008, 01:20 AM
 
Location: Pittsburgh, USA
3,133 posts, read 8,146,658 times
Reputation: 1076
Lump sum because I'm old.
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Old 12-11-2008, 08:49 AM
 
Location: Denver
692 posts, read 2,373,871 times
Reputation: 364
Depends on the size of the prize, health, age, ..gulp.. child support
payments ( and their custodial benefactor ) and of course your own
financial prowess.

I would definitely go lump now before the tax rates change.
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Old 12-11-2008, 09:03 AM
 
Location: Chicago, Illinois
3,047 posts, read 7,971,348 times
Reputation: 1367
gotta take the lump sum! you never know when God is going to call your number. gotta enjoy it while you can.
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Old 12-11-2008, 10:44 AM
 
28,906 posts, read 45,247,246 times
Reputation: 45820
Lump sum.

Under Federal tax regulations, if you die while still receiving your annual payments, your estate must immediately pay taxes on the payments yet to be disbursed. So your heirs might get hit with a whopping tax bill for money that will be trickling in for years. Either that or you take out a huge insurance policy.

Further, a lump sum, if invested prudently, could insure an annual cash flow roughly equal to any annual payments without ever touching the principal.

Finally, what if something happened to make government insolvent and you couldn't get your money later on? Personally, if I won the lottery tomorrow, I'd be buying gold, Swiss francs, and New Zealand farmland, and salting the rest away overseas.
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