Another Lottery thread... Annuity or Lump Sum?

[sky121]

You just won the current Powerball...

Do you take the annuity or lump sum?


Would it be different if it were less money?

[Proisrael]

Who spends your money better you or the government?

[ShlockDoc]

Great article about this subject:

http://www.nytimes.com/2016/01/13/upshot/dear-powerball-winner-take-our-advice-and-take-the-annuity.html

[Aaaron]

I'm curious What the thought process of those that voted for the annuity is?

[Iz]

I'm curious What the thought process of those that voted for the annuity is?

Great article about this subject:

http://www.nytimes.com/2016/01/13/upshot/dear-powerball-winner-take-our-advice-and-take-the-annuity.html

[coralsnake]

I'm curious What the thought process of those that voted for the annuity is?

Could be smart for most people who will blow all the money every year. At least they have more coming next year.

[Aaaron]

I think his logic is flawed, but too lazy to type on my phone.

Could be smart for most people who will blow all the money every year. At least they have more coming next year.

A trust is an easy way around that, but yeah, that's really the only reason I could think of.

[Chapshnell]

You just won the current Powerball...

Do you take the annuity or lump sum?


Would it be different if it were less money?

You got to tell them at the purchase how you want it

[yuneeq]

Could be smart for most people who will blow all the money every year. At least they have more coming next year.

Nothing safer about an annuity when you can borrow against your winnings in advance.

[coralsnake]

You got to tell them at the purchase how you want it

No personal experience but I believe you can change it after you win.

[Dr Moose]

No personal experience but I believe you can change it after you win.

Nope.

[sky121]

You got to tell them at the purchase how you want it

You do? I didn't. 

[ShlockDoc]

You got to tell them at the purchase how you want it

I think that depends on the state.  In my state you select when you claim the prize.  #OOTLife

[Sport]

Great article about this subject:

http://www.nytimes.com/2016/01/13/upshot/dear-powerball-winner-take-our-advice-and-take-the-annuity.html

Really? aside from the  protecting yourself from yourself argument, his arguments make little financial sense. I'm no investing expert but how difficult would it be to find an investment with a return of just 5%? Which would turn your winnings into over 3.6b in 30 years (pre tax).

[aygart]

Really? aside from the  protecting yourself from yourself argument, his arguments make little financial sense. I'm no investing expert but how difficult would it be to find an investment with a return of just 5%? Which would turn your winnings into over 3.6b in 30 years (pre tax).

His point about it being tax deferred is good one.

[Aaaron]

His point about it being tax deferred is good one.

Eh, you'll still be taxed twice.  When the annual payments are 8 figures you'll be investing most of it anyway, and still paying taxes on gains.

[aygart]

Eh, you'll still be taxed twice.  When the annual payments are 8 figures you'll be investing most of it anyway, and still paying taxes on gains.

So what. You had those years of tax deferred gains.

[Achas Veachas]

You got to tell them at the purchase how you want it

Not in NY you don't...

[Aaaron]

So what. You had those years of tax deferred gains.

"Gains."  And there are plenty of legitimate ways to defer your gains anyway, while having taken the lump sum.

[aygart]

"Gains."  And there are plenty of legitimate ways to defer your gains anyway, while having taken the lump sum.

Well isn't the return on what would have been the lump some  "gains"? It is not so easy to tax defer income on an investment of $900m that I know of? What are some of the plenty of ways you are referring to?