$500 million pre taxes instant payout-
$260oor so million after taxes
Wonder if it would be better taking the 30 year payout, or getting $260 right away and begin investing it?- of course you could invest your yearly payout over 30 years too-
The annuity is based on the interest rate if the cash value is invested in ultra-safe bonds, usually 30 years US Treasuries. With interest rates this low I would think it a poor long term investment since the annuity does not adjust for possibly higher inflation and historically stocks are a much better investment over the long term.
The big argument in favor of the annuity is that it is essentially stupid insurance. It allows the winner to do some dumb things and make mistakes, maybe taking investment advice from uncle Roy, or letting your dead beat cousins mooch off you for a few years until you get tired of it, and still know that that you are not gonna be broke. A 2015 study by the Harvard business School showed that about 40% of lottery winners burn through their winnings in the first 5 years. Most people who play the lottery, and therefor most who win, come from backgrounds that leave them intellectually and temperamentally ill-equipped to deal with sudden wealth. For them, the annuity is almost always going to be the best choice, though it is rarely taken.
Max Federal government tax rate + Obamacare Tax (43.4%) = $215,276,000.00
State Taxes: My state (AR) State Income Tax 7.5% = $37,200,000.00
Net after tax winnings = approx. $243,524,000.00
Smart thing to do is to relocate to a state income tax free state (TX, WY, SD, FL, AK, NV, WA) and then:
1) Tithe to God 10%= $49,600,000.00 (yes, God gets 10% gross, and it comes out of your post-tax earnings)
2) Pay off all of YOUR immediate family debt(s):
3) Buy some life insurance, Long Term Care policy, and Health Savings Account.
4) Contact trust attorney, CHCL/CHU/CFP insurance agent, and a CPA/JD
5) Don't buy anything yet. Have your broker buy you tax free municipal bonds and live off the interest for the rest of your life. CALL ME!
6) Gift either $14,000/yr tax free for maximum IRS exclusion, or one time life tax free gift exclusion of $5,430,000.00 to your closest, reliable, mature, and smart relative/friends.
7) Give to FreeRepublic, local RNC, and NRA/GOA/JFPO.
8) Change your phone number.