One piece of advice that will go unheeded is that you can choose to take the earnings over a period of 30 years, which would be a fabulous fixed income!
I won’t live that long, I’ll take it in a lump sum
and then go on a serious shopping spree; that is if Holland & Holland is still taking orders for rifles. LOL
Unless you lived in Illinois, where they will issue you an IOU for the next thirty years.
Take the money at once, because you will not be able to force the state to honour what it owes you if you take payouts over the next thirty years.
Invest money yourself through several investment firms instead and you will do almost as well over the same time period.
Everyone takes the lump sum.
Why? Taxes. Think the markets will do better?
Rather have it in my hand and invest it myself.
Most of the time I would disagree with you.
Inflation would eat away your annuity at a rate of 3-5% a year. But with the pot THIS big, there is hardly any fear of that.
That said, taking the lump sum is the financially sound move almost every time. You can invest to keep up with inflation and changing times.
Thirty years from now is going to look very different.
Most trust better and are advised to take the lump sum. Letting the guv keep your money in their possession is seldom a good thing.
One could think it could control overspending for the profligate, but it is too easy to simply borrow against it anyway.
At 75 I may not be around to collect the last few payments. A little something for the kids and grandkids, I guess. And maybe a nice new wing for St. Judes. And reducing the need for FReepatons.
I read something to the effect of $29 million a year? Surely that would suffice. I suppose the real lump sum motivator is morally/financially bankrupt government. People assume they won’t be good for the money over time.
Does anyone know if there is a right of inheritance in that annuity? I think most people would be afraid to take that option if there isn’t.
Both signing the ticket and taking the annuity are not good pieces of advice. In order to preserve anonymity, and that should be a priority, you can’t sign the ticket until you have formed a trust, and then it will be signed over to the trust. The annuity vs. Lump sum loses significant money overy the long term.
Aren’t some or all of the payouts taken over 30 years annuities? Are annuities insured?
Let’s see. I’d be 100. I’ll take the lump sum, thanks :)
If I win $1.6 billion I’m not gonna need a fixed income over the next 30 years. Plus, what if the lottery goes belly up? Or decides they’re not gonna pay because some future government decides to keep the money? Take the money now
If the state's finances were to get really bad, suspending lottery payouts would be high on the list as one of the first things to be cut. I believe that has already happened in Illinois.
It takes a lot of discipline however to "lay low" after winning such an amount. I personally know a $1m winner (on a scratch ticket) up in Massachusetts. He managed to keep a lid on it for about 48 hours but then he made the mistake of telling a few people and suddenly everybody in his family knew. He started hearing from relatives he hadn't seen in decades and he had to change his phone number.
By the way, I think it is so crass for people to suddenly try and "buddy up" with people who come into good fortune - after ignoring them for years. It's so transparent and shameless. Don't they have any self-respect?
My friend with the million dollars did the smart thing. He took the lump sum, paid off his mortgage, his car loans and banked the remainder, eventually putting much of it in mutuals. He also maxed out his 401(k) contribution at work now that he didn't have a mortgage to pay.
But no shiny new car, no other conspicuous luxury. His life is essentially unchanged. He still has the same job, drives the same car and wears the same clothes. His only real splurge is taking a two-week vacation in Hawaii each winter with his wife.
See, he realized that a million dollars (actually about $480K after taxes) wasn't life-changing. But he made the most of that $480K by making the necessary moves to achieve long-term financial security for himself.
If the state's finances were to get really bad, suspending lottery payouts would be high on the list as one of the first things to be cut. I believe that has already happened in Illinois.
It takes a lot of discipline however to "lay low" after winning such an amount. I personally know a $1m winner (on a scratch ticket) up in Massachusetts. He managed to keep a lid on it for about 48 hours but then he made the mistake of telling a few people and suddenly everybody in his family knew. He started hearing from relatives he hadn't seen in decades and he had to change his phone number.
By the way, I think it is so crass for people to suddenly try and "buddy up" with people who come into good fortune - after ignoring them for years. It's so transparent and shameless. Don't they have any self-respect?
My friend with the million dollars did the smart thing. He took the lump sum, paid off his mortgage, his car loans and banked the remainder, eventually putting much of it in mutuals. He also maxed out his 401(k) contribution at work now that he didn't have a mortgage to pay.
But no shiny new car, no other conspicuous luxury. His life is essentially unchanged. He still has the same job, drives the same car and wears the same clothes. His only real splurge is taking a two-week vacation in Hawaii each winter with his wife.
See, he realized that a million dollars (actually about $480K after taxes) wasn't life-changing. But he made the most of that $480K by making the necessary moves to achieve long-term financial security for himself.
Maybe. Things are so bad in Chicongo and Illinoise that they’re behind paying off lottery ticket winners. California couldn’t even pay income tax returns. You never know what level of shenanigans the government or its agencies will come up with.
Unless you are 35 or 40 years old....
It really depends on trnsferability upon death, plus the legal requirement for the state to pay, no matter what.
Find the right legal representation, a CPA & financial advisor, Erik Prince, and fund it all through the cash option.
Statistics showing 90% total loss of the proceeds after five years would be in favor of the annuity, except for the ability to cash in the structured payments through a bad deal at a later time.
https://www.youtube.com/watch?v=cN9OKXtzHtE