2006-12-07 18:34:18 · 9 answers · asked by chapped lips 5 in Business & Finance ➔ Taxes ➔ United States
all at once, i heard that if you take it in payments over time you lose too much in inflation, like 30 years from now gas could cost $1000 a gallon,
and if you invest it right, it will grow faster than inflation.
2006-12-07 20:19:20 · answer #1 · answered by Anonymous · 1⤊ 0⤋
It would depend on the amount by which the state discounts the cash option vs. the installment option. Stated differently, if you take the cash option after tax and invest it prudently in a diversified portfolio, and pay yourself an allowed amount of distributions for expenses and taxes, which method has the better internal rate of return, the state's installment payments or the managed portfolio. Most families of mutual funds would likely outpace the state's installments.
2006-12-08 03:30:42 · answer #2 · answered by mattapan26 7 · 0⤊ 0⤋
I think Mattapan26's answer is the most accurate.
Determine the rate of return you think you would make over the life of the payout. Say 6%. What is the Net Present Value (NPV) of that payout stream using that rate. Compare that amount to the one time payment amount. If the NPV is greater than the one time payout, take the stream. If the one time payout is greater, take it.
(I have disregarded taxes for the initial test. If the payout does NOT trigger the maximum rates then factor them in. Also do not just look at what they withhold. If you factor in taxes, base your calculations on what you have left after you file; not just on what they will withhold)
2006-12-08 13:10:25 · answer #3 · answered by zudmelrose 4 · 0⤊ 0⤋
if i were so lucky to have won million dollar lotery,i w''d take it all at once.with this huge amt of money i can invest in share market n spend the money wisely.
2006-12-08 02:46:49 · answer #4 · answered by robert KS LEE. 6 · 0⤊ 0⤋
lotery winnings are tax free
2006-12-08 04:02:21 · answer #5 · answered by Jomtien C 4 · 0⤊ 0⤋
Yearly, so I dont get a chanse to blow it all! Also I would Invest in stocks and things like that.
2006-12-08 02:39:55 · answer #6 · answered by nmmgb1993 2 · 0⤊ 0⤋
Lump sum. Then invest with a diverse portfolio.
2006-12-08 02:42:03 · answer #7 · answered by EJ E 2 · 1⤊ 0⤋
take it all at once, you can then reinvest it and earn back or more of what you lost from the lottery taxes and funny calculations.
2006-12-08 02:36:24 · answer #8 · answered by LetsGoMets 3 · 0⤊ 0⤋
no it is not possible you have to loose atleast 30% approx
2006-12-08 07:32:13 · answer #9 · answered by mastermind 1 · 0⤊ 0⤋