If you were to win the lotto, would you rather collect it in one lump sum, or in annual payments?

Question

There's a little lotto craze going on in California right now ($325,000,00 jackpot), and maybe the other states that play Mega Millions. I was just fantasizing about what I'd do with the money lol

Would you rather collect it all at once, or spread it out over 26 years (stated as an option in the rules)?

What are the pros and cons of each option?

Answer 1

well... i'd probably go one lump sum. I use part of the money to get all of my debts paid, buy a nice house, and maybe a new car. I would take at least a million of it and put it in a savings account with an interest of about 5% accruing on it. I'm really not a big spender, so I would just live off the interest.
The pros of going for the lump sum is that you get all at once. The cons is that they TAX the heck out of it. There was a guy who won a $315 million jackpot, he only received like $175 million of it.
The pros to doing the annuity payments is that its not as badly taxed. The con is that its spread over all of those years and you have claim it on your taxes every year until the last payment is received.

Answer 2

I would get it in one lump sum because then the taxes are taken out of the lump of the $325 mil but if you were to brake it up they take out taxes for the individual spread out.
With the lump at least you know Uncle Sam would not come back to take out more tax because he already got it. :-)

Answer 3

I would rather get it all at once. Pay taxes on one lump sum and be done with it. Then I could get started selling my house, building my dream home, getting new cars, spoiling my kids, and putting back for my kids futures.

Answer 4

One lump sum for this gal!

Answer 5

Depends on your circumstances; age, health, family situation, marital statis, whether or not you will continue to work (doubtful) and lifestyle desired. Me, probably lump sum!

Answer 6

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Answer 7

LUMP SUM!!!