Lottery Jackpot: Cash or Annuity?

[poetgenius335]

The reason why the jackpot is listed two different amounts is because in reality, these are not 2 values of money. One spread out and bigger to allow for inflation, and one in all one amount. Taking the lump sum assumes to get equal payments over 26 years, you would have to match inflation through wise investments. The real jackpot is always the cash amount thats listed.

[fxmike11]

I basically learned this a while ago, and when it gets up to like 200-300 mil I start to buy some tickets but always realize if (a big if) I do win, it would never be that amount. I still think the cash option is optimal, you can take that money and invest it into something that pays out more than whatever crap interest rate they pay you through the annuity payments. FEH!

[COOLRADIUM]

What I'm writing is all hypothetical. So basically if the Jackpot is, let's say: 1 million bucks. The cash option is 600,000 and the other 400,000 is interest that you never get? They government tax the 600,000 and you walk away with 300,000 bucks. So you went from a 1 mill to 300,000 dollars.That's why USA is so rich. It taxes everything. America is not a country, it's a business entity to me. Uncle Sam, you are no uncle of mine. America is still great tho.

[rpaul247]

In canada if they advertise a 2 mil jackpot that's exactly what you get plus they don't tax lotto winnings. Only here in the US they do this misleading garbage. Plus these guys make a killing in lotto sales(billions) compared to the advertised jackpot which is just a drop in a huge bucket.. So they can more that afford to pay the "advertised" amount lump sum.

[zoso1234]

Wait a minute....if the Jackpot is $300,000,000 then how come you don't get the exact amount??? I think Canada pays out exactly what the jackpot is....something smells fishy to me lol...I will have to google other countries lottery and see what's up?

[StickYaSelf85]

@gemo67 it still gets paid out to your estate or you can designate someone who will receive it in case of your early demise with the state lotto

[StickYaSelf85]

The way things are today, I think I'd just get the lump sum and buy a good safe and some gold bullion for worst-case-scenario security. Bonds aren't as safe as they used to be and you never know what the government may try to pull in the future.

[mamacacanana]

I think if your age 45 and under, pick 26 payments. If your over that, then get the lump sum.

[lilpj4good]

just pay me millions 

[WireFunds]

Why do lotteries advertise the "annuity" option as the jackpot. Don't you think this is a bit misleading?

[gemo67]

What happens if I win the power ball and I choose the annuity option and I die before the annuity is paid in full?.

[IALottery]

Great question, 6shades. In regards to the annuity question, that is what annuities are: Investments that provide guaranteed payments over time. There is a lot of information available about annuities either online or from a financial planner if you need further information.

[6shades]

this doesnt sound right...... how can you offer winnings that doesnt exist yet? (meaning the intrest) Plus it doesnt make sense that the state would invest on your behalf for free. they stand to gain a profit.

[strawberriesncandii]

I would choose annuity that way I can count on money for a 26 year period. It's a shame Jack Whitaker lost most of his money. How does someone blow through almost $315 million? If I had the money I'd go annuity. Then I'd rent my own apartment, school full time, take a trip to France, by myself a new wardrobe, then put the rest in the bank and take my ass back to work.

[RossMCcool]

if i won i wouldt even be able to tell the misses, shes such a gossip

[ilovevegas17]

im going to win the lottery.one day

[Thedarksecret1]

If you're young and you win the lottery you should accept the annuity payments. However, if you are old as hell it would be prudent for you to take the lump sum payment. I'm sure that you'd understand the logic behind this. Good luck!

[BlackAnvil47]

I won some money playing the lottery pick 4 game and you wouldn't believe the number of people asking for numbers to play, a loan, or could I help them out.....Damn if you win find a corner and sit quietly. Because if you win a large amount like I did the vultures will circle you easy pickings.

[dobattlers]

Cash option is pretty much always the better option due to time value of money and you can invest the lump some as well even in low risk securities. The only reason to take the annuity would be if you do not trust yourself to save or invest the lump sum.

[shananagans5]

@dobattlers LOL  Look at most of the winners. Many of them are poor dreamers and have no idea whatsoever to do with the money and end up broke or getting themselves into some kind of bad situation within a few yrs.

[joeglimmix]

where else can you bet an amount of money and then do a switcheroo and later say that amount is over a 20 year period

[justpicky]

I wouldnt tell a sole ......lol

[bourne419]

Don't believe the hype.....this is not financial planning........playing the lottery is not investing, it ts wishful thinking......this lottery....ANY lottery.....is a sucker's bet..... You might as well stand in the middle of the street and wait to get struck by lightning.

[1000hightower]

I choose annuity

[ainemacdermot]

Take the lump sum, AFTER you find a lawyer, accountant, and personal financial planner. The PFP can invest your money better than the state lotto does, and you & your heirs can actually end up with more than the advertised winning sum.

[JOEYP1970]

shes smokin hot!

[planktonite]

You're beautiful but you didn't answer the question in the description...should I take the lump sum or the annuity???

[vickfan203]

I'd take the cash cause they give you like $10,000 a week or something. If I win, I want my Lambo NOW! =]

[nepalihercules]

@vickfan203 no for 200 mil its more like 200k a week

[vickfan203]

@nepalihercules

Still.... I want my Lambo now!!!! (: well.... i could do payments >.> ANNUITY FOR THE WIN lol... too bad ill never win >.> time to go cut grass for $5 an hour ):

[PinoyZo1]

@vickfan203 Lol hell ya Lambo/ferrari! haha

[slowdenfast101]

@vickfan203 lmfao i with you dude.

[JCredible86]

This sounds shady! Who cares though if you win anyway.

[Spytheweb]

This is very simple, the cash option is the principal, the rest is interest. @ 6% a million will earn $60,000 a year.