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Started By
Message
Powerball-cash vs annuity
Posted on 1/9/16 at 4:59 pm
Posted on 1/9/16 at 4:59 pm
Which way would you go and why?
What are some of the pros and cons of each?
What are some of the pros and cons of each?
14
Posted on 1/9/16 at 5:13 pm to prplngldtigr
At this amount, it really doesn't matter 
Posted on 1/9/16 at 5:45 pm to prplngldtigr
I'm taking the cash and moving at least half offshore.
Posted on 1/9/16 at 6:07 pm to prplngldtigr
Take the lump sum.
I dont trust the lottery not to go bankrupt and certainly don't trust Democrats not to raise taxes in 30 years.
I dont trust the lottery not to go bankrupt and certainly don't trust Democrats not to raise taxes in 30 years.
Posted on 1/9/16 at 6:15 pm to prplngldtigr
Cash.....a bird in the hand is worth two in the bush.
Posted on 1/9/16 at 6:54 pm to prplngldtigr
Cash is king.
Posted on 1/9/16 at 7:40 pm to prplngldtigr
Lump sum, no way am I depending on them to give me that much money over a long term. Plus, you can probably end up with the same amount over the long term if you invest that lump sum well. Taxes wouldn't matter much since you're in the top bracket regardless.
Posted on 1/9/16 at 8:12 pm to prplngldtigr
What % do they use to figure cash value?
Posted on 1/9/16 at 8:40 pm to prplngldtigr
Not even doing the math. Cash...all day.
Posted on 1/9/16 at 8:43 pm to prplngldtigr
Cash. No question.
Posted on 1/9/16 at 9:29 pm to prplngldtigr
Lump Sum for following reasons:
1) I think I can invest it better than the lottery company can
2) Lottery winnings are ordinary income. If you take the annuity, you pay ordinary rates on the entire amount. If you take the cash, you can invest it in things that will have earnings taxed at qualified rates, or even tax-free munis if you choose
3) You can plan better for the money if you control all of it
If you can't manage money, the annuity might be better because it guarantees you will get payments for 30 years.
In the year I win the money and take the cash, I would divide the money into the money I would keep for me and my family, and the money that would go to charity. Set up a private foundation and go ahead and put it all in now (in my case, I'd probably invest 50 percent of the money for my family and put 50 percent into the foundation). That also cuts down on your tax bill.
1) I think I can invest it better than the lottery company can
2) Lottery winnings are ordinary income. If you take the annuity, you pay ordinary rates on the entire amount. If you take the cash, you can invest it in things that will have earnings taxed at qualified rates, or even tax-free munis if you choose
3) You can plan better for the money if you control all of it
If you can't manage money, the annuity might be better because it guarantees you will get payments for 30 years.
In the year I win the money and take the cash, I would divide the money into the money I would keep for me and my family, and the money that would go to charity. Set up a private foundation and go ahead and put it all in now (in my case, I'd probably invest 50 percent of the money for my family and put 50 percent into the foundation). That also cuts down on your tax bill.
Posted on 1/9/16 at 10:02 pm to prplngldtigr
Out of curiosity, I made a spreadsheet. All my numbers assume you invest everything (spend nothing) with either option. I also assumed the lump sum is 62% (558/900).
With a 0% return, the annuity passes the lump sum in the 19th year.
With a 3% return, the annuity passes the lump sum in the 27th year.
With a 5% return, lump sum is 115% of the annuity after 30 years.
It takes a 3.7% return to have the same amount in either case after 30 years. So from a math perspective, if you can do better than that, you should take the cash.
With a 0% return, the annuity passes the lump sum in the 19th year.
With a 3% return, the annuity passes the lump sum in the 27th year.
With a 5% return, lump sum is 115% of the annuity after 30 years.
It takes a 3.7% return to have the same amount in either case after 30 years. So from a math perspective, if you can do better than that, you should take the cash.
Posted on 1/10/16 at 6:45 am to prplngldtigr
quote:
Which way would you go and why?
Don't remember the numbers, but pretty positive taking the lump and investing it yields more than the annuity.
Posted on 1/10/16 at 1:19 pm to prplngldtigr
As others have said, the lump sum.
And if you are the kind of dumbass who would spend all the money on bling, then do I have a business proposition for you!
And if you are the kind of dumbass who would spend all the money on bling, then do I have a business proposition for you!
Posted on 1/15/16 at 8:33 am to prplngldtigr
Saw this on the news-
Take the lumps sum and after taxes, you will have 450 million. But US Bonds and your net 600K a year without touching the principal.
Take the lumps sum and after taxes, you will have 450 million. But US Bonds and your net 600K a year without touching the principal.
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