If you win the lottery, is it better to take payments or lump sum?

Question

Let's assume that if you take the payments, the jackpot is $200 million paid over 30 years, and if you take lump sum, you get $100 million up front.

Also, you are not going to kick the bucket until after the payments are done (if you choose that option)

Answer 1

I would take the payments. That would be easier to manage and less risk of blowing it all or losing it all some how. I mean banks can fail, accountants can run off with the money. Taking a lump sum is too risky to me.

Answer 2

I always ask for the payments when I buy a ticket for two reasons. First -- I don't trust myself. I'd rather take $26million in 26 annual $1mil payments and know each year that I have another million coming next year. Otherwise, I may blow it all at once. Second, I plan to live for another 26 years and I figure that I can make ends meet well enough with a million a year -- I'm not too concerned with investing it and doubling it or anything -- one million is enough for me. However, if you have a good financial planner that you trust, you may make more money investing the lump sum. The lump sum is less because it is the amount that the lotto determines they would need to invest in order to make your payments over the next 26 years. You could invest that money yourself and potentially make more. However, you could also invest that money yourself and lose a substantial portion of it. I figure that the state probably won't miss the lotto payments, but I may misinvest the money. So again, I stick with the payments personally.

Answer 3

Lump sum is always best. You never know what gonna happen 26 years down the line. Get a good paying financial advisor. Also a good lawyer. A good tax advisor too. You need to pay them decent if you want good advise. Always get second opinion. If all else falls put a big chunk of money in a high paying cd. Right now at 5 pecent still not bad. Make sure before you do anything buy a home and pre calculator the taxes for the next 25 years or so. That incase you good hog wild and spend all your money you got a place to live. Don't give any money to any family member that are not your immediate family. All the sudden your cousin, aunt and uncle, distance relatives you didn't know you have come knock on the door. You just cannot possible please everyone and share your weath. Have a lawyer draft up a will too. Plus power of attonery incase something happens to you.

Answer 4

Don't forget that Uncle Sam takes out taxes. Anyway if you're too old get the lump sum. Enjoy as much as you can. But if you're young better take the payments to make sure you won't overspend.

Answer 5

Take it as a lump sum but before you claim the prize, find a good financial adviser (for fee type won't charge you an arm and a leg,) and invest it yourself. Your rate of return will be much better than what the gov't guarantees.

Answer 6

You may spend the lump sum before you realize it...I believe that is very likely. However, the payments are an annuity and annuities can fail.

I think the best bet is lump sum, but you must guard your spending.

Answer 7

I would take the lump sum, the payment is 30years maybe I would be dead by then ^^,

Answer 8

depends, if you can control yourself to save the money then taking it up front and saving it in a bank w/high interest is a good idea but if you frequently play lotto im guessing your just gona spend the money fast and lose all the money.

Answer 9

Upfront. You're money's worth more now than years down the line. Why not make interest on your money insteady of the gov't?

Answer 10

Lump sum.

Get $100M up front, compound interest over 30yrs...

Way more than $200M.