Quote:
Originally Posted by Bowser
I've always heard that if you won a powerball jackpot and took the lump sum, you end up with roughly 30% of the amount after all taxes are settled.
200 million-ish in my pocket would be ok with me.
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Keep in mind, the advertised jackpot doesn't actually exist. The cash they have on hand to pay the winner is the lump-sum payment. If you choose the $600MM option, you are basically telling them to hold your money for you, invest it in an annuity, and pay you from it each year. They calculated that with interest, you'll eventually get that higher number.
If you want an annuity, you could buy one yourself. The tax difference doesn't matter much (except maybe in CA where they have a million dollar bracket), you are way into the top bracket either way, and if you take the annuity, maybe they raise taxes in 10 years.
If the lottery winner is either dumb, a spendthrift, or weak-willed enough to be taken advantage of, they should do the annuity. If the winner is smart, they should take the cash.