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Old 11-18-2016, 01:30 PM
 
462 posts, read 356,256 times
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The lump sum is the better choice, you can then buy your own annuity at a much better rate than the lottery will give you. The problem is the majority of lottery winners rip through the money very quickly, so for those who are financially illiterate (the majority of lottery winners) the annuity payout is the safer choice (except if you are older of course).


The best play is not to play it at all, but since you are on this forum you probably already know that.
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Old 11-18-2016, 02:58 PM
 
Location: St. Louis, Missouri
9,359 posts, read 16,900,056 times
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Quote:
Originally Posted by cheapdad00 View Post
This x1000. The key point being, don't claim it until you have your ducks in a row. For me, the most important thing would be to preserve anonymity. I wouldn't want my children knowing about it until they had "launched" lest they lose motivation from becoming productive adults.

which is why if I buy a ticket, I buy it in Illinois.... Missouri publishes names and photos of big winners.... in Illinois you can remain anonymous.....
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Old 11-18-2016, 03:22 PM
 
10,348 posts, read 12,355,772 times
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Originally Posted by Katana49 View Post
The cash value is currently $202 million. By winning, you'd be in the top tier tax bracket for that year, which is currently 39.6% So you'd end up getting 60.4% of it, assuming you live in a state with no state income taxes, or about $122 million.

For that much money I would buy several nice homes around the world, nice cars, take some amazing vacations, and I'd probably spend about $22 million of it and keep the rest invested for the rest of my life to pass on to my children.
This is correct......except consider the estate tax on the lump sum to your heirs.

So you have 100 million banked. First 5.45 million is exempt and the rest is taxed at 40%. So 94.55 million whacked at 40% leaves your kids 56.73 million.

Of course there are crafty ways around this using trusts/life insurance policies etc.
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Old 11-18-2016, 03:25 PM
 
10,348 posts, read 12,355,772 times
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Originally Posted by madbach View Post
The lump sum is the better choice, you can then buy your own annuity at a much better rate than the lottery will give you. The problem is the majority of lottery winners rip through the money very quickly, so for those who are financially illiterate (the majority of lottery winners) the annuity payout is the safer choice (except if you are older of course).
Taxes can be a problem if you die before collecting the 30 payments. IRS looks at the annuity as cash on hand (lets say it was 300 million/30 years is 10mm a year). You died with 7 payments left, IRS values your estate at 70 million (that you haven't collected) so you owe 40% in estate tax (28 million) but wait you haven't collected a penny of those last 7 payments!

Now you have to sell the annuity to an investor for pennies on the dollar and pay the 28 million next April 15th. Lose-lose for the heirs.
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Old 11-18-2016, 03:27 PM
 
10,348 posts, read 12,355,772 times
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Originally Posted by FiveLoaves View Post
Question -- If you win a November Big One, but don't claim it til January 2017....do you owe taxes for 2016 ?
I asked a CPA and he said if you know about the win then you are supposed to count it as 2016 income. I really don't know if that is set in stone or he was just BS'ing me.

If it was me.......I would run up the credit cards and have a blast for 5-6 weeks and collect the money in 2017.
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Old 11-18-2016, 03:29 PM
 
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Originally Posted by Girl View Post
I've often said I'd prefer to get the annual payments so that I CAN'T go crazy and become one of those lottery winners who fails at everything and loses all their money. I'd like to think I wouldn't be that person, but I'll bet those folks never thought they'd lose it all either.

My husband says he'd want the lump sum though, and take his chances.
People with the payments can still lose everything.......
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Old 11-18-2016, 03:30 PM
 
10,348 posts, read 12,355,772 times
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Originally Posted by flyonpa View Post

Where to park it then. Any Major Brokerage would be good, Any HUGE bank.
Brokerage accts are insured for 500K

Bank accounts are 250K

Sure hope you don't dump it all in a Lehman Brothers type deal and by Monday it is all gone........
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Old 11-18-2016, 03:54 PM
 
4,315 posts, read 2,552,523 times
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Quote:
Originally Posted by LillyLillyLilly View Post
Agreed. I've always kept my finances private. I would gradually upgrade my life in the manner of someone who maybe inherited a few hundred thousand or cashed in some stocks. Then wait a couple of years before the next upgrade. I'm patient enough that no one would ever know I won a humongous amount of money, not even my relatives.
why buy a ticket if you aren't going to en joy the HUGE winnings?

Being soooooooooo worried that someone might find out would be a good enough reason not to pl,ay.
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Old 11-18-2016, 03:58 PM
 
Location: MMU->ABE->ATL->ASH
9,141 posts, read 17,223,795 times
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Quote:
Originally Posted by City Guy997S View Post
Brokerage accts are insured for 500K

Bank accounts are 250K

Sure hope you don't dump it all in a Lehman Brothers type deal and by Monday it is all gone........
Most "Big" brokers have Insurance above from other sources (Probably Lloyds of London) for coverage over the SIPC limits.

I am not worried about the backing of firms like Schwab, Fidelity...
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Old 11-18-2016, 04:00 PM
 
4,315 posts, read 2,552,523 times
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Quote:
Originally Posted by City Guy997S View Post
This is correct......except consider the estate tax on the lump sum to your heirs.

So you have 100 million banked. First 5.45 million is exempt and the rest is taxed at 40%. So 94.55 million whacked at 40% leaves your kids 56.73 million.

Of course there are crafty ways around this using trusts/life insurance policies etc.
read my post #27

List your kids as part of the winning ticket and dedicate what percent of the winning amount each gets.

If one doesn't trust their kids to handle a share of the winnings wisely at cash in day, what's to say they will handle it wiser when you die.
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