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Message
re: Annuity or Lump? Updated for 1.6 Billion
Posted on 10/19/18 at 8:57 am to slackster
Posted on 10/19/18 at 8:57 am to slackster
quote:Yep. And for a self-aware, smarter person he or she could get a team together to manage that well enough so that it grows with as little as tax burden as possible.
You'd be looking at more federal and state taxes in LA. Somewhere around $325MM net.
If you take the annuity, you can expect those 5% increasing payouts along with roughly ten years of a stable tax burden (roughly $120MM after tax). Although I'm not sure how you can best manipulate that by moving to a tax free state. Would look into that because it would make the annuity more appealing.
Another thing people seem to be forgetting with the annuity is that you can still invest plenty of money on your "own"... just not all of it.
1
Posted on 10/19/18 at 8:58 am to Pintail
quote:The fact that so many of you are misinformed only leads me to think you'd frick up the lump sum.
you are relying on someone not sticking their hand in the pot and using it up. Plus if you die after 1 year, your family is SOL.
Posted on 10/19/18 at 8:59 am to Pintail
quote:
Which is just slightly higher than inflation over then last 20 years.
I'm not advocating it's a great return, I'm just suggesting most won't come close to matching it on their own.
quote:
The point of getting a lump sum is not only do you have control over it, but you are relying on someone not sticking their hand in the pot and using it up. Plus if you die after 1 year, your family is SOL.
The payout is going to you/your estate regardless. Someone is getting all 30 payments.
Posted on 10/19/18 at 8:59 am to slackster
quote:
Everyone that said they'd take the lump sum the other day didn't have the wherewithal to actually generate better returns than the annuity did
All it takes is one phone call to the right financial group.
Posted on 10/19/18 at 8:59 am to ell_13
quote:
think you'd frick up the lump sum.
oh i'd frick it up alright. but, i'd have a helluva good time doing it.
Posted on 10/19/18 at 9:00 am to highcotton2
quote:
you lived in Louisiana and won would it not be better to pack your shite up and move to say Tennessee before you claimed the check? Tennessee has no income tax.
You purchased in LA, you pay in LA
Posted on 10/19/18 at 9:00 am to ell_13
quote:
The fact that so many of you are misinformed only leads me to think you'd frick up the lump sum.
, exactly. This is why most should take the annuity.
Posted on 10/19/18 at 9:01 am to LSU6262
Lump Sum and control your own investment destiny.
Cash is King in this scenario.
Cash is King in this scenario.
Posted on 10/19/18 at 9:02 am to CAD703X
quote:
All it takes is one phone call to the right financial group.
Hardly anyone in the thread th either day would even entertain the idea of a professional manager. These people are clueless.
Posted on 10/19/18 at 9:02 am to slackster
quote:
Annuity. I dont trust myself with that much money that soon
I feel the same way.
Also, at one time 4 of the 5 largest lottery winners were broke within 7 years. Most people can’t handle the stress that comes with that kind of money. They make piss poor investments, they give it to every long lost cousin, and people take advantage of them. They wake up one day broke.
Posted on 10/19/18 at 9:03 am to LSU6262
I'll take the Annuity. I know I can invest it and get better returns, but I also know I'm a human being who would buy boats and hoes.
Posted on 10/19/18 at 9:04 am to LSU6262
This also doesn’t take into consideration tax inreases in future years. You’d be stupid to not take lump, invest and/or buy a ton of assets/businesses (tax breaks) to reduce what will be an insane tax bill for 2018.
Posted on 10/19/18 at 9:07 am to Pintail
quote:
Which is just slightly higher than inflation over then last 20 years.
The point of getting a lump sum is not only do you have control over it, but you are relying on someone not sticking their hand in the pot and using it up. Plus if you die after 1 year, your family is SOL.
So much wrong here I don’t know where to start, which is impressive for such a short post
Posted on 10/19/18 at 9:07 am to Rendevoustavern
quote:
You’d be stupid to not take lump, invest and/or buy a ton of assets/businesses (tax breaks) to reduce what will be an insane tax bill for 2018.
You get $325MM all at once and it's easy to become stupid.
While I agree taking the lump sum is the financially prudent way to go, the logic from many is funny. These people laugh at a 4.5% return, but wouldn't hesitate to pay off their mortgage at 4.25%.
Posted on 10/19/18 at 9:12 am to LSU6262
Lump sum!
I have four words for you
TIME VALUE OF MONEY
Had you received $20,000 in 1988 it would have the same value as $42,725 in terms of buying power today. Had someone had the options to receive the $20,000 in 1988 or in annuity payments until 2018... that value would go down drastically.
$42,725 in 2018= $20k in 1988 (Lump Sum)
$20k in 2018 = $20k in 2018 (Annuity)
So now I ask you this... what do you assume the value of $20k will be in 2048 as opposed to 2018?
Certainly it will be less than it is worth today due to inflation.
So the question for the winner in 1988 was really : Would you like $42.7k today or $20k in 30 years?
That's why you take the money in a lump sum.
I have four words for you
TIME VALUE OF MONEY
Had you received $20,000 in 1988 it would have the same value as $42,725 in terms of buying power today. Had someone had the options to receive the $20,000 in 1988 or in annuity payments until 2018... that value would go down drastically.
$42,725 in 2018= $20k in 1988 (Lump Sum)
$20k in 2018 = $20k in 2018 (Annuity)
So now I ask you this... what do you assume the value of $20k will be in 2048 as opposed to 2018?
Certainly it will be less than it is worth today due to inflation.
So the question for the winner in 1988 was really : Would you like $42.7k today or $20k in 30 years?
That's why you take the money in a lump sum.
This post was edited on 10/19/18 at 9:14 am
Posted on 10/19/18 at 9:13 am to LSU6262
Most in here will say lump sum because somehow they wouldn't be able to invest any of that $22 million/year.
I'm probably taking the annuity for anything over $15 million yearly payouts. $10mm in investments/assets/land per
year for 30 years is reasonable. Nobody (I hope) is investing the entirety of their lump sum in year one, so it's a moot point anyway.
I'm probably taking the annuity for anything over $15 million yearly payouts. $10mm in investments/assets/land per
year for 30 years is reasonable. Nobody (I hope) is investing the entirety of their lump sum in year one, so it's a moot point anyway.
Posted on 10/19/18 at 9:13 am to slackster
Anyone winning this thing should do three things:
First, call up a legal/financial planning team. There are options here, obviously.
Second, Shut. The. frick. Up. Turn off all social media if you have to. I probably wouldn't even tell my wife.
Third, claim it on November 7th.
First, call up a legal/financial planning team. There are options here, obviously.
Second, Shut. The. frick. Up. Turn off all social media if you have to. I probably wouldn't even tell my wife.
Third, claim it on November 7th.
Posted on 10/19/18 at 9:14 am to SaturdayTraditions
Time value of money means nothing if you're not working to appreciate the value of said money.
This post was edited on 10/19/18 at 9:15 am
Posted on 10/19/18 at 9:15 am to ell_13
quote:
Another thing people seem to be forgetting with the annuity is that you can still invest plenty of money on your "own"... just not all of it.
This is what I was thinking. All else equal, if you took the annuity and invested some of it and got similar returns, wouldn't you be better off?
Posted on 10/19/18 at 9:17 am to slackster
Obviously past winners haven’t been this smart, but my first course of action would be legal entity, claim money silently, then fly to NYC to meet with financial firms to handle 80% of remaining cash. To Each their own but that’s my course of action. I don’t want $300mm sitting in a COD or easy access to it at all. $25mm is more than enough to have fun with for the time being.
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