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If u win lottery which one u would pick?Annuity VS Instant Cash

C

cool.dx.rip

Senior member
i have seen in many sites giving advice powerball lottery winners about which one should they pick.but it seems they are confusing.Some say annuity is best.some say instant cash.I want to know what option u would choose if win that lottery and why? We take the big prize as a example.prize is about 200$M+++(prize varies from state to state) if the prize 600$M will u change ur option if u win 200$M?
 
if the prize is small you should take the annuity for tax reasons. if its large take the cash.
 
If it's a smaller amount (20m or under), probably annuity, less likely to splurge with less cash up front and have better self-control.

If it's a huge jackpot, lump sum, can easily invest in low risk and earn back the money lost.
 
I don't know because I don't expect to need to know the answer, but it would depend for me on whether the annuity can be passed along to heirs. I have no use for a lot of money in one chunk but would take that if by dying tomorrow someone I wanted to pass something to would get maybe one payment if I chose an annuity.
 
I'd probably take annuity for maximum payout. Lottery winnings are tax free in Denmark, any returns on investments are not so it would be harder to earn back the money lost from taking a lump sum.
 
I think that depends on whether you can manage your money and pace yourself. A lot of people say they can but history generally shows that to not be the case.

I'd be inclined to say lump sum due to concerns about tax increases and potential inflation effects but I would spend a bit more time considering if I actually had to make a decision.
 
Assuming a large jackpot - Always take the lump sum... The lottery jackpot is actually based off the 20 year annuity that is calculated off the State's existing bonds' interest rate - which is fairly low... the Lump Sum is the actual NET PRESENT VALUE of the Jackpot calculated off that same interest rate. If you are financially educated or have a trustworthy good wealth manager - you can invest the lump sum and EARN more than money than the jackpot over a 20 year span.

The only time you should pick an annuity is if you don't trust yourself financially and that you might blow the money away.
 
I'd combine the two. Take the lump sum and then put at least half of it into an annuity/trust so that no matter how badly I fuck up there's still a guaranteed mega-check coming every year. Then have fun with the rest knowing that the future is protected.
 
As the saying goes - "a dollar today is worth more than a dollar tomorrow"

Take the lump sum.
 
The real answer is: Do the calculation including all applicable taxes, expected investment gains etc, and then match it to your goals.

If you're 80, have cancer, and want to go out in a cocaine and hooker fuelled blaze of epic glory, lump sum. If you're 22 and no one in their right mind would trust you to hold on to $20 for 10 seconds without blowing it on something stupid, annuity.
 
If in fact the annuity terminates at death with no possible benefit to heirs that the lump sum is the only option for anybody who has folk they want to benefit themselves. Most folk seem to be looking at the options in terms of what benefits them personally. That seems pretty myopic to me, or some other word.
 
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