2006-08-25 07:38:57 · 33 answers · asked by anon 1 in Business & Finance ➔ Personal Finance
lump sum because if you do the other..when you die..it goes back to the government...your family or anyone else won't benefit from it...
2006-08-25 07:44:47 · answer #1 · answered by ? 4 · 1⤊ 3⤋
Lottery Lump Sum Vs Annuity
2016-12-11 20:22:49 · answer #2 · answered by ? 4 · 0⤊ 0⤋
This Site Might Help You.
RE:
Which lottery payout option is better - lump sum cash or annual payments?
2015-08-10 05:13:34 · answer #3 · answered by ? 1 · 0⤊ 0⤋
Lottery Payout Options
2016-10-04 05:29:22 · answer #4 · answered by mangini 4 · 0⤊ 0⤋
I would take annual payments. Yes you can leave it to your family. The lottery has you fill out a beneficiary document. at least here in Pennsylvania.(You have to check with your state). You state who will get the rest of your winnings when you die. It does not go back to the government. Maybe in taxes because whatever you earn off of the winnings is taxable as earned income. you will get more money in the long run if you take annual payments. But lump sum is nice too.
2015-10-08 13:24:14 · answer #5 · answered by kuch 1 · 0⤊ 0⤋
both are good. It depends on what is important to you. Lump sum will get you a smaller lump sum. Payments will get you a lot more money, but it will take 20 years to get it all.
It's called time value of money.
What is of value to you?
2006-08-25 07:41:57 · answer #6 · answered by Anonymous · 1⤊ 0⤋
I would say it's definitely the lump sum. That is because if you are taking annual payments and you die, your estate could have to pay tax on the whole amount of the winnings, and the annual payments might not be enough to cover this.
2006-08-25 07:43:11 · answer #7 · answered by Anonymous · 1⤊ 1⤋
Annual payments all the way.
1. It gives you a steady income stream for the payout period.
2. If you should find yourself needing the money all at once at a later date there isn't a financial institution in this country that wouldn't love to buy that annuity from you.
3. Most lottery jackpots are inheritable assets so even if you don't live as long as the payout period, you can will the remaining amount to your heirs.
2006-08-25 07:45:58 · answer #8 · answered by Anonymous · 3⤊ 1⤋
Lump sum - and here's why (we'll assume winnings of $1,000,000, for ease of math)
Let's say the annual payments are $50,000 (not much, I know, but bear with me) for 20 years. First, the government will take their nearly 50% before you see a dime, leaving you with roughly $27,000. Now, taking inflation into account, how much do you think $27,000 will be worth in 20 years? Even if you invest the $27,000 each year at 10%, in 20 years, you'll have about $1.5 million
With a lump sum, you get about $550,000 now, but with the right investments, in 20 years (at 10% - about average for the NYSE), you'll have $3.7 MILLION!!! - that's more than twice as much!
Which would YOU rather have?
2006-08-25 13:45:59 · answer #9 · answered by homeschoolmom 5 · 4⤊ 3⤋
The age old question. Here's the long version of the correct answer.
If you take a lump sum paymet one could argue that the return on your money (let's say $10m) would definatley be more than double over 20 years (which it would even at a 6% return). However, there are certain tax advantages to taking the money over time. If it were up to me... I'd take the winning ticket to my new best friends office (my newly hired tax attorney) and let him/her explain things to me.
Slainte,
-D
2006-08-25 07:43:06 · answer #10 · answered by chicagodan1974 4 · 2⤊ 0⤋
It depends if you are selfish or not. In most states if you are taking annual payments they do not continue once you are deceased. But if you take a lump sum you can leave money to your family, friends, and charity. I would take lump sum.
2006-08-25 07:53:50 · answer #11 · answered by Anonymous · 1⤊ 2⤋