Let's say you won the lottery

[cypher1]

A few years old, but another perspective:

http://www.businessinsider.com/should-you-take-the-annuity-or-the-lump-sum-if-you-win-the-lottery-2013-9

[msomnipotent]

I wouldn't do anything until I had a trust to claim the ticket, then another trust to handle the money. Then I would take a lump sum as soon as possible. If my state (IL) has to handle the payments, that could be never. There are several lawsuits filed because they are not paying the lottery winners. I have no idea if Powerball would fall under that. Plus, they are likely to increase the taxes on lottery winnings. There is a good argument for taking payments and moving somewhere with a better tax advantage, but I would just take the money and run.

[GoodSteward]

There is a good argument for taking payments and moving somewhere with a better tax advantage, but I would just take the money and run.

Right. You want to be free and clear from anything else. Less headache and worry of being shafted what you won. It would be so much money it wouldn't matter what you did as long as you still lived based on a plan. Otherwise, you'd still run out and be broke. You hear of that all the time.

With $500 Mil I still don't know if I would run the risk of investments. I mean, at that rate I'd just put it in savings and draw nearly nothing, but tax free. If you invest into a bond fund (that could techincally go bust) You would also have to still be paying taxes on the gains.

To avoid all of it and live tax-free forever (minus property taxes * Unless you bought that island mentioned above!) I'd just make a plan to live off what I have left.

As a safety net, I would probably stick some money into an investment somewhere as a fail safe, but not plan to pull it until later, if at all (pass it on to heirs who have to pay taxes anyway on my money)

[GoodSteward]

I will add I would probably convert a large amount over into precious metals, and things that will ALWAYS hold value in any economy. You never know

I would also probably start a business, because I always wanted to. lol

[msomnipotent]

I will add I would probably convert a large amount over into precious metals, and things that will ALWAYS hold value in any economy. You never know

I would also probably start a business, because I always wanted to. lol

Silver is down to $16.80. Gold is down a little, too. If we didn't need the money for our vacation and the move, I would be at the coin shop today.

[~bs]

I'm really not sure what you're trying to say here.

1. With the lump sum payout, you get a single payment that is smaller than the total jackpot. So for a $900,000,000 jackpot, you might get a $500,000,000 lump sum (just making up numbers).

2. If you pick the annuity, you get 30 annual (not monthly) payments totaling $900,000,000.

The question is are you better off taking the lump sum and doing your own investing and the standard answer to that question is yes.

I think it depends. It's a question of if a 30 year pension is better than a lump sum payment up front. The lump sum amount is calculated using an actuarial estimate less a "penalty" for taking it up front.

if you invest the lump sum money and earn X% per year, and also invest the annual payments and earn X% per year, both payment structures would end up being the same. (no income tax considerations) You just need to figure out what that X% is, and is it worth taking the risk of investing yourself versus a standard rate. Again, similar to the considerations of a pension.

[AJ444]

I'm taking the lump sum, investing in 50/50 stock bond index funds and living off the dividends/interest. I am of the Warren Buffet persuasion in that most will go to charity when I die and the rest to family. Letting the principal grow during my lifetime is going to leave charity with a ridiculous amount of money later, I don't need to see the impact while I'm alive.

[AJ444]

I have a subscription to the state lottery and a couple of weeks ago hit 3/5 numbers and the two that didn't hit were two off each.

So damn close to 10 mil......

[danielaa]

Lump sum for sure!

[annibe11e]

My understanding is that the annuities are not transferable in the event of your death. I would take the lump sum for that reason alone.

[PeggyHefferon]

My understanding is that the annuities are not transferable in the event of your death. I would take the lump sum for that reason alone.

I don't believe that is true.

[annibe11e]

That's just what I heard. I guess I'll look into when I win