Mega Millions: Lump Sum or Annual Payout?

[Sim]

Strangely close to the LOST numbers of 4-8-15-16-23-42.

[HuskyBlue]

^^^$150. I wonder how many people play those numbers.

[lugnutz]

where can I get 5% on my money with no risk?

Send me everything you have......I practically guarantee it!

[uconnrecruitingviolator]

Simply, you get more money from your winning ticket over the long haul.

more money from the source yes but you're losing the chance to have that money work for you while you wait for your annuity to mature completely. the government takes more money from those who choose annuity. not to mention the fact that your annuity payment in year 20 will be worth 20-30% less than year 1 because of inflation, minimum.

if you choose the annuity option, the government gets to invest your money and keep the proceeds. if you take the lump sum, you get to invest the money and keep the proceeds.

theres also the tax factor, taxes will be raised at some point, its unavoidable. every time that happens, your annuity payment is worth less than the year before. or you can take the lump sum and invest in tax-free investments and not worry about paying taxes on your income.

[mcm]

2 winners - Idaho and Washington

Jackpot was $355m

[rearadmiral]

Simply, you get more money from your winning ticket over the long haul.

more money from the source yes but you're losing the chance to have that money work for you while you wait for your annuity to mature completely. the government takes more money from those who choose annuity. not to mention the fact that your annuity payment in year 20 will be worth 20-30% less than year 1 because of inflation, minimum.

if you choose the annuity option, the government gets to invest your money and keep the proceeds. if you take the lump sum, you get to invest the money and keep the proceeds.

theres also the tax factor, taxes will be raised at some point, its unavoidable. every time that happens, your annuity payment is worth less than the year before. or you can take the lump sum and invest in tax-free investments and not worry about paying taxes on your income.

[Jackie Treehorn]

It sounds like there are a lot of people here who don't understand time value of money.

[K-G]

It sounds like there are a lot of people here who don't understand time value of money.

You are surprised by that??

[rearadmiral]

It sounds like there are a lot of people here who don't understand time value of money.

What side are you on?

[K-G]

He's on lump sum - the correct side.

[rearadmiral]

I don't pretend to be a finance whiz.

I just can't stomach thought of hitting lottery and not collecting what I'm fully entitled to (on a very simple level, not getting into taxes, investments, etc.).

There were a couple stories in local papers and a couple of winners stated that they wish they looked into the lump sum a lot more before opting for it.

[lugnutz]

I was told once by an accountant before a lottery winner does anything he/she should seek a very expensive tax attorney and accountant. There are many things that you can do before you claim a ticket that will save you money. The choice to go lump or annuity has a lot to do with what you might be worth now. The money you spend on council will come back many times over.

[K-G]

Thanks Lug. Best advice ever.

[rearadmiral]

I was told once by an accountant before a lottery winner does anything he/she should seek a very expensive tax attorney and accountant. There are many things that you can do before you claim a ticket that will save you money. The choice to go lump or annuity has a lot to do with what you might be worth now. The money you spend on council will come back many times over.

Right, you are.

[midd]

Thanks Lug. Best advice ever.

It really may have been the best ever.

Let me ask my council if he agrees.