lump sum or installments?

[livnxxxl]

I chose lump sum because I want all my money NOW!

Just curious to know what would you have chose? I know different people make different decisions for different reasons. A lot of folks that I have talked to said go with the installments because it would last longer.

My logic of thinking is the way this world is headed I want to cash out now knowing that I have mine in hand. I have serious trust issues. What can I say?

[toys2cool]

depends on the amount for me

[mazinz]

usually in the end you come out with more doing it as one large sum. The taxes are horrible, but it gets over and done with in one shot.

Spreading it out over the years the taxes come out a little more. Also god forbid something happens to you, the money does not get passed on. The lotto commission just stops the payments all together. This is not good if whatever sum is helping out your family and the needed monthly income to keep going just stops coming in

[Mikey]

Installments

I'd get buttraped for taxes if I took it all at once.

[Zemo]

Lump sum, You do more with your money. Invest wisely in whatever.

[Hector]

Lump sum, You do more with your money. Invest wisely in whatever.

Ditto.

[mitchedwards]

Take the installments.

With the lump sum they only give you partial winnings, then the govt takes 40-50% of that.

With lump sum you will get a guaranteed lifetime payment. Plus after you die your heirs will continue to receive payments till its all paid out.

[Hector]

TPlus after you die your heirs will continue to receive payments till its all paid out.

What heirs?

I don't have any...

[wilbs518]

Lump sum for sure!

[fallensaviour]

Just call me lumpy...

[Adam West]

You have to do a little analysis and decide from there. You need to calculate the PV of the installment payments compared to your lump sum to determine the interest rate you are being paid to allow them to pay you over time vs. one lump sum.

You have to look at the tax situation. What are the tax payments now vs over time? It has been a long time that I have done any serious tax work but I seem to remember that there may be some type of obscure tax rule that basically says it you are entitled to take a lump sum payment but choose to take installments, you still have to pay tax as though it was a lump sum. They might have changed the rules since then or a different set of rules might apply to lottery winnings (I'm assuming this is what you are talking about). Then you have to look at what your spending patterns. Can you take the money and invest it yourself at a higher rate than the installment payments. I don't know how much you are talking about but if it is substantial, it would be wise to hire a financial analyst who is familiar with this and they can crunch the numbers for you as well as give you investment ideas if it turns out that taking a lump sum is most advantageous but keeping your money in a safe investment vehicle like laddered CD's, T-Bills, etc.

[jimsmegos]

Give me the lump sum, I'll pay the one time winners taxes, schedule a trip to a casino, loose it all and sleep a little funny on my new lumpy mattress

[livnxxxl]

With lump sum you will get a guaranteed

I do agree with you on some points that you made there. I to hate the fact to have to give the big G some more money. As if they cannot ever get enough to blow as it is already. After all you win it. They just sit back and take it. Like taking candy from a baby.

It is the "guaranteed" part is what gets me. What kind of a guarantee is there really?? A guarantee today is nothing but word or paper and to me sounds like a false facade. Of course it is said that you will get it, but try to get it if something happened in the economy. Which it very well could happen. There once was a time where banks would not even give people their own money back in the day. The question I ask myself is who is really in control of your money you or someone that is guaranteeing it to be there. Just food for thought.

[livnxxxl]

You have to do a little analysis and decide from there. You need to calculate the PV of the installment payments compared to your lump sum to determine the interest rate you are being paid to allow them to pay you over time vs. one lump sum.

You have to look at the tax situation. What are the tax payments now vs over time? It has been a long time that I have done any serious tax work but I seem to remember that there may be some type of obscure tax rule that basically says it you are entitled to take a lump sum payment but choose to take installments, you still have to pay tax as though it was a lump sum. They might have changed the rules since then or a different set of rules might apply to lottery winnings (I'm assuming this is what you are talking about). Then you have to look at what your spending patterns. Can you take the money and invest it yourself at a higher rate than the installment payments. I don't know how much you are talking about but if it is substantial, it would be wise to hire a financial analyst who is familiar with this and they can crunch the numbers for you as well as give you investment ideas if it turns out that taking a lump sum is most advantageous but keeping your money in a safe investment vehicle like laddered CD's, T-Bills, etc.

You do make very valid points as you know what you are doing. I really do like you. I should have hired you to be my accountant.

[livnxxxl]

Give me the lump sum, I'll pay the one time winners taxes, schedule a trip to a casino, loose it all and sleep a little funny on my new lumpy mattress

Maybe in your case I may suggest not taking the lump sum.