ShokWaveRider
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She should have taken the annual payment, she was only 47 years old.
I guess lotteries really are a tax on people bad at math
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flyingaway
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Lottery is an entertainment.
RISP
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Going on the record with her full name and a photo, obviously.
target2019
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
With seven children she realized the yearly annuity would quickly be consumed. Still, I'd like to win and experience the dilemma.
Agreed. They make the "after tax" amount sound like spendable money, when in reality more taxes are usually required at the first filing.
ncbill
Thinks s/he gets paid by the post
Yes, posing for a photo isn't required...but unfortunately making your full name & city (IIRC) public are required in this state.
Most of you got it right...the annuity payout is far more valuable.
And checking online quotes, even a hefty $10 million of 30-year term is only ~$30,000/year...female, standard, non-tobacco rated.
I can understand the emotional appeal of the lump sum, but monetarily it is a far poorer value in this case.
As with most lottery wins where there is a choice.
travelover
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Yes, even back before a lump sum was an option, many sold the annuity ASAP for a pot of cash so they really did feel like a "millionaire".
She did just about what I would do with $4.1M, take the lump sum, invest it in a high yeild index fund, and help out family, possibly start a local charity.
This 4.1 is after taxes, and guaranteed. The annuity may have given me more $$, and less taxes, but investing the lump will far outweigh taxes.
This 4.1 is after taxes, and guaranteed. The annuity may have given me more $$, and less taxes, but investing the lump will far outweigh taxes.
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For 4.1 net after taxes, vs. a 20 year annuity? Yeah I'd have done the same thing. It's a pretty sweet deal either way, and if she's not a twit and invests it as any of us would I'm sure she'll be fine.
USGrant1962
Thinks s/he gets paid by the post
Well, as Taxman59 said above it is less than $3.5 million after taxes. The $4.1M number simply represents withholdings, not actual tax due, and the withheld amount is never sufficient to cover the tax on these things.
It appears to be a lifetime annuity with a 20-year minimum.
So yea, the annuity is a really sweet deal.
GravitySucks
Thinks s/he gets paid by the post
Didn't one state - Illinois? - stop paying it's Lottery annuities debts?
Bird in the hand...
Bird in the hand...
ncbill
Thinks s/he gets paid by the post
She's left with ~$3.3 million after paying applicable federal & state taxes.
I had forgotten the annuity is guaranteed 20 years minimum.
I'd also take the $300+ million lottery wins like Powerball/MM as a lump sum, but here at least the annuity was clearly the more remunerative choice.
jollystomper
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+1, beat me to it. Better to stay anonymous if possible (some state lotteries have laws against that).
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Yes they do, I think FL is one of them that requires a photo op. I once read a very long piece by some guy about how to go about changing your name, ID and such before accepting any prize. Makes perfect sense. I'd probably also show up well disguised, wig, makeup, dark glasses, etc. Yeah, agreeing to go public is a big mistake, no matter how you take the winnings.
lucky penny
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Looks like only 9 states permit lottery winners to remain anonymous but the number has been rising due to privacy concerns. Lottery officials argue that transparency is important to maintain public confidence in the system. (And, duh, the splashy stories about big winners boost ticket sales.)
A few years ago a court in NH (where state law requires disclosure) ruled that a big winner was allowed to stay anonymous by creating a blind trust.
https://www.nhpr.org/post/growing-number-states-move-shield-lottery-winners#stream/0
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harley
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I didn't know any of the annuities were guaranteed. That might make a difference, and certainly makes more financial sense. However, I still wouldn't trust them to pay over 20 years. One little state-wide bankruptcy and who knows?
California invests their lottery proceeds in Treasuries, which even their pension system doesn't do. If I won the lottery I would probably take the lump sum, because I can take slightly more risk by putting it in munis or stocks and do better, even with the tax drag. The only difference would be if the annuity was in the $200,000 to $1,000,000 range, where there would be a substantial amount taxed at lower brackets.
Bamaman
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I too didn't take time to read the article. In many states, the largest selling agents for the lotteries are in the absolutely poorest neighborhoods in large cities. And people playing the lotteries heavily are those that can least afford anything. Often, their children are going hungry while the parent blows their money on the lottery.
It's just another tax on the poor. And it's a dirty business.
It's just another tax on the poor. And it's a dirty business.
mh
Thinks s/he gets paid by the post
Interesting tidbit. Government lotteries have been around since Elizabethan Times at the least. Her first one was launched to repair the countries harbors.
EvrClrx311
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Best I can make of the lottery curse... would be to imagine any one of us having a spotlight shone onto our FIRE finances, for all our family, friends and the general public to see. Now imagine if it was all just given to you... and something you didn't earn...
it's no wonder why winning the lottery is a quick way to become severely depressed and lose all your friends, and sanity while you're at it.
Unless you live in a state where you can stay anonymous. Avoid at all cost
it's no wonder why winning the lottery is a quick way to become severely depressed and lose all your friends, and sanity while you're at it.
Unless you live in a state where you can stay anonymous. Avoid at all cost
athena53
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I agree. My immediate family is doing well- some even better than I am- but I'd hate to have my net worth broadcast all over creation so that charities, "financial advisors" and friends I didn't even know I had came out of the woodwork- not to mention the occasional psycho who thinks kidnapping one of my grandchildren might be a way to raise money.
