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re: Annuity or Lump? Updated for 1.6 Billion
Posted on 10/19/18 at 9:17 am to SaturdayTraditions
Posted on 10/19/18 at 9:17 am to SaturdayTraditions
quote:
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)
That's why the annuity payments add up to more than the lump sum payment. I'm not saying it's equal (it would be hard to predict), but it's not like you either get $300mm now or $300mm spread out in 30 equal annual payments.
1
Posted on 10/19/18 at 9:18 am to LSU6262
quote:There's no way of knowing really. The annuity is a forced control that limits spending but also growth... and also loss. It's very conservative but in it's own way risky due to politics.
wouldn't you be better off?
Posted on 10/19/18 at 9:18 am to SaturdayTraditions
quote:
TIME VALUE OF MONEY
Taxes, taxes is the answer you’re looking for.
We currently know that we are in the lowest income tax environment in history. Do we know that will be the case in 15,20,30 years?
Posted on 10/19/18 at 9:19 am to Rendevoustavern
quote:You can't in certain states although some people have found loopholes.
claim money silently
Posted on 10/19/18 at 9:21 am to highcotton2
quote:
If 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.
I'm pretty sure any tax judge will see through that.
Posted on 10/19/18 at 9:22 am to Thib-a-doe Tiger
quote:
Taxes, taxes is the answer you’re looking for.
We currently know that we are in the lowest income tax environment in history. Do we know that will be the case in 15,20,30 years?
This is why my 401k and ira is a Roth
Posted on 10/19/18 at 9:24 am to Thib-a-doe Tiger
quote:
So much wrong here I don’t know where to start, which is impressive for such a short post
I did laugh when he claimed 4.5% was just slightly more than inflation over the last 20 years.
Posted on 10/19/18 at 9:24 am to Pintail
quote:
if you die after 1 year, your family is SOL.
Umm ... you might want to call in the professionals to help you manage things, because that simply isn't true for lottery winnings.
This is not a lifetime annuity we're talking about, it's an annuity with a defined length of 30 years. If you die next year, your family still gets paid.
Posted on 10/19/18 at 9:29 am to foshizzle
All these people in the lottery threads who “know” what to do and aren’t willing to hire financial managers are why so many lottery people end up broke
Posted on 10/19/18 at 9:32 am to LSU6262
I want it all
Posted on 10/19/18 at 9:32 am to Thib-a-doe Tiger
i have a list of 21 relatives. if i were to ever win, after putting a huge chunk aside for each of my 2 kids , the rest would be divided equally 23 ways. Me, my wife and 21 relatives. it'd be a helluva party.
Posted on 10/19/18 at 9:33 am to Buck Dancer
quote:
Lump sum and invest it myself
Why would you feel compelled to "invest" when you have that much cash?
Posted on 10/19/18 at 9:34 am to LSU6262
quote:
27MM is the Louisiana tax. Feds take 24%
Ahhh Didnt realize that was referring to LA taxed money.
Posted on 10/19/18 at 9:35 am to MorbidTheClown
What have a small family so no one would come begging for money that I hadn't already planned on sharing with.
My wife otoh has a large extended family of some pretty shitty people. They would be the ones I worry about.
My wife otoh has a large extended family of some pretty shitty people. They would be the ones I worry about.
Posted on 10/19/18 at 9:37 am to Displaced
i just figure it would be more money than i would ever spend. and i'm a generous person. why not share with my family?
Posted on 10/19/18 at 9:41 am to Thib-a-doe Tiger
quote:
All these people in the lottery threads who “know” what to do and aren’t willing to hire financial managers are why so many lottery people end up broke
Right. Why do people think they're going to be investment gurus overnight? Unless that's literally what you do as your current occupation there is no reason to try to get exotic with "investing"
With that type of capital, do you really care if you make a 1% annualized gain or a 10% annualized gain? You were never going to attain that much cash on your own in the first place. Why pretend that you need to invest all of a sudden?
Posted on 10/19/18 at 9:41 am to LSU6262
quote:
27MM is the Louisiana tax. Feds take 24%
I hope you aren’t planning a huge purchase with your winnings, because you are 13% short on your federal taxes
I’ll make this easy for the LA people. You will retain around 57% of the money whether you take an annuity payment or the lump sum. You will be in the highest state and federal tax brackets. Lottery winnings are taxed like ordinary income
This post was edited on 10/19/18 at 9:43 am
Posted on 10/19/18 at 9:43 am to GRTiger
quote:
That's why the annuity payments add up to more than the lump sum payment. I'm not saying it's equal (it would be hard to predict), but it's not like you either get $300mm now or $300mm spread out in 30 equal annual payments.
The annuity also saves you from yourself
You'll never be the big lotto winner that blew it all and is now broke if you take the annuity
Posted on 10/19/18 at 9:43 am to Powerman
quote:
Why would you feel compelled to "invest" when you have that much cash?
You could live a pretty damn good life off the interest and it could last generations if managed well
Posted on 10/19/18 at 9:44 am to Thib-a-doe Tiger
quote:
I hope you aren’t planning a huge purchase with your winnings, because you are 13% short on your federal taxes
Yep
Top marginal rate is 37 and with an amount that large the effective rate will essentially be the top marginal rate
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