Lottery Payouts: Are you choosing Lump Sum or Payments?

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Lottery Payouts: What are you choosing? #personalfinance #lumpsum
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Опубликовано:

26 июл 2023

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Комментарии : 216

@01ECLIPSIFY10 10 месяцев назад

Let’s be honest here, the real winner of the lottery is the IRS

@MattChinander 10 месяцев назад

Hence why it is legal!

@Professional_Youtube_Commenter 10 месяцев назад

who cares man, it's free money. give half

@01ECLIPSIFY10 10 месяцев назад

@@Professional_RU-vid_Commenter I’d rather give that half to family, friends, or a charity as opposed to the govt

@Lobsterman5481 10 месяцев назад

@@Professional_RU-vid_Commenter Not to the IRS, Give it to the poor people.

@Professional_Youtube_Commenter 10 месяцев назад

@@Lobsterman5481 where does welfare come from?

@kevin933 10 месяцев назад

Lump sum in case the lotto company goes bankrupt lol

@Mopsink 10 месяцев назад

Lotto's here in the US are all state run, not private companies, In the case of the Powerball & Mega Millions those two are run by the MUSL (Multi-State Lottery Association) which is a Non-Profit government benefit association owned and operated by the 38 member states.

@pjlaveus3964 2 месяца назад

Bro the number only goes up if the funds are there 😂

@ArneyO7 10 месяцев назад

Lump sum option and put it all on black to instantly double your winnings

@dagg497 3 месяца назад

Play on both red and black

@zacharieamyotrivest9561 10 месяцев назад

In your exemple, you are not investing the anuity you are receiving each year so the comparaison is not the same. Im sure that if you capitalize all the annuity to year 30 the result would be similar.

@Alusnovalotus 10 месяцев назад

Thank you for posting the smarter version of what I posted 👍🏾👍🏾👍🏾

@larkohiya 5 месяцев назад

Not particularly. You still get only a percentage on a fraction of the total instead of a percentage of the whole which over time is almost nothing compared to just interest on the total amount.

@Dr.Wrektem 4 месяца назад

Sorry, have we forgotten what compound interest is?

@2023ViewerSupport 2 месяца назад

You are missing the point though. Your state can change in taxes or worse we might not see a bright future the next 30 years.

@PM-oe5mk 10 месяцев назад

Lump sum will always win over the annuity IF you are responsible with money and investing it wisely. If you are irresponsible when it comes to money, then you are better off sticking with the annuity. There are plenty of stories where people win huge in the lottery but end up broke some years later all because they didn't know how to handle their money.

@lanceareadbhar 10 месяцев назад

This is the correct answer.

@alejmc 10 месяцев назад

I don’t get how irresponsible one can get to be to burn through so many millions 😮… would have to place myself in those shoes to test it because currently I don’t know what I would do, I need like $40K a year to live minimally comfortably enough. With only $50M (a fraction of the prize) one would need 1250 years to go through, at a non inflation scenario.

@monetarnie3841 10 месяцев назад

@@alejmcbut that's You. Mike Tyson famously burned 400 million bucks that he earned during his career :) It is doable.

@Lobsterman5481 10 месяцев назад

@@alejmc Give yourself a salary out of the winnings, whatever is left over of the salary. you donate to charity.

@Thedjsmokeybear 5 месяцев назад

That’s the THING, most people are not responsible!!!

@punisher6659 10 месяцев назад

I'm in my late 50's. with no children. There is no guarantee I'll live another 30 years and if I do There is always the chance of dementia. if I was 30yrs younger I'll take the yearly payments. Now. I'll take the lump sum.

@kjaubrey4816 5 месяцев назад

The problem is that most lottery winners are horrible with money. I understand that mathematically it makes more sense to take the lump sum but I have also heard that the annuity gives cushion for a person to royally screw up and then have another chance the next year.

@brionthomsen7479 4 месяца назад

of course they are bad with money.....they spent it on LOTTERY!!!! the fact that they HAPPENED to win is irrelevant. lottery is an extra tax on people who can't do math

@rjangel80 Месяц назад

This has been repeated over and over. But logically age is what matters when it comes to picking lump sum or annuity. If you are in your 20s, definitely better to take the annuity as you will be hitting the biggest by yoir retirement. And in your 20s you are less financially educated. But if you arw over 40 yrs, there is no point in getting annutiy making the biggest payment come in at 70, where the person has less time to utilize the money.

@IM2MERS 6 месяцев назад

I can't survive on 28 million a year

@bryanbrasile2703 10 месяцев назад

Eh, I prefer the annuity. Id still be investing. Just living a whole different life.

@Trudloops 10 месяцев назад

Agreed

@mobydickhead1 6 месяцев назад

I get what he's saying but when your first of 30 annuity payments is over 10 million you'll have plenty of money and the safety of not being a static, and also 29 more chances to get your spending under control.

@GotPoopWeScoop 10 месяцев назад

Don’t they take even more money from u if you choose lump sum

@mycelia_ow 4 месяца назад

If you do what he said in the video, then no, you make more.

@nax1807 3 месяца назад

Annuity is a gamble on a gamble, what if you die before the term? The insurance company keeps the rest...

@Alusnovalotus 10 месяцев назад

That sounds like an IF. you’d have to find a bank or investment that would yield that for you and that’s almost as hard as winning the lottery in the first place. There’s no guarantee you would get that much by the end of 30 yrs. Not to mention the irresistible urge to splurge in the meantime.

@darlenepaul2918 10 месяцев назад

Since 80% of lottery winners go bankrupt in 2-3 years why does this guy think winners should take the lump sum.Obviously they can't handle it at all!!!

@dinoblacklane1640 4 месяца назад

Most people who buy into the lotto aren't smart with money to begin with. So it's no surprise that they spend the money in stupid ways.

@rjangel80 Месяц назад

@fastsrt7 3 месяца назад

Don’t know if this is true, but with annuities from lotteries only get paid to you while you live. Once you pass away it doesn’t get passed over to your will trust and/or family.

@JayeK47 4 месяца назад

Lump sum has significant tax disadvantages especially if you live in a state and/or locality with an income tax. That $516M will be more like $250M once the tax man gets a hold of it. With the annuity you can at least move to a no income tax jurisdiction.

@rjangel80 Месяц назад

@lucascorreadl 4 месяца назад

Im 33 and im not even sure ill live 30 more years... This is a big commitment lot of stuff can happen down the road...

@Lillith. 10 месяцев назад

Depends on anonymity. If you can't stay anonymous, don't get the lump sum. You'll be pecked clean by very shady people. If you get it over 30 years less will bother.

@dreamchaser5758 4 месяца назад

Very good point. Too much damn toxic/criminal attention

@lazybastardsinc.1668 3 месяца назад

A lot of states allow a corporation to claim your lottery ticket in your stead with a contract that they will take money, usually 2-3% of the annuity, and send you a check from their corporation. This anonymity could easily be worth the 2-3% as long as you don’t open your mouth.

@boosted_dz188 3 месяца назад

If I recall correctly, with the annuity option in the event you pass away, payments cease and are not transferred to heirs so you’d have to be investing that in transferable assets. Not sure how that would change if the recipient would be a trust for example

@chukokurimu3340 15 дней назад

That's actually smart. I would've chosen the 30 year deal, but this is smarter.

@florincostache3419 Месяц назад

thank you for this. I will do exactly that

@ankurshah2323 2 месяца назад

You never know what's going to happen in the future so lump sum is the best option

@tome1903 Месяц назад

Im taking the lump sum, buying a house in cash that i can afford the taxes and utilities for without the lottery money, and then probably starting the business ive been wanting to for a while

@LilFletch926 16 дней назад

When you take the annuity, you are also taking insurance. You can f up for 29 years and still have generational wealth year 30.

@farright118 5 месяцев назад

How does tax affect these options?

@OmegaWarrior42 4 месяца назад

At that amount of money, it really doesn't matter what you do. So long as you're not buying small countries on the regular, you're not gonna be able to spend it all in one lifetime, and most likely neither are the next generation or two of your family.

@ValkyrieofNOLA 8 месяцев назад

I’d be much more comfortable taking the annuity payments. That way, if I have some financial issues, I know I have more money coming. But, I’d incorporate myself before claiming it so if I die before the last payment is issued, my heirs can get it

@rjangel80 Месяц назад

@dchen2140 Месяц назад

Annuity payment is literally like an NFL contract lol.

@reality9451 2 месяца назад

A 30 year T-Bill is at 4.34% today. Call it about $22 million a year in coupon payments on that $516 million. I think that would be enough "mad money" for me...

@leeseungho3499 10 месяцев назад

I don’t know if high yield savings account can hold that much money tho

@RK-bx1by 10 месяцев назад

You can have multiple savings accounts then. You'd definitely need to get a wealth advisor if you get that much money.

@zurn56 2 месяца назад

Lump is also better for taxes if you are in a lower bracket. They will only tax you on the earnings for that year, the payout option taxes you at the highest bracket for 30 years

@fortyseven1832 Месяц назад

I could live the rest of my life comfortably on one years interest.

@whatwhatinthewhat4400 4 месяца назад

Based on my understanding of lotto winners, the yearly payment option seems to be the best because too many lotto winners seem to blow it all in a few years, they have no control, no experience with money etc so does a yearly payment let them have money now to settle debts, buy a house etc set them up for life, even blow it all on hookers and cocaine, but lets them learn some lessons before they get the next payment?

@elpunky1161 2 месяца назад

True and those funds in payment are not a 100% guarantee.

@redjack2629 13 дней назад

The issue is that... You can lose investments. If your investments are successful, keep investing. If not? You're limited at how much you can lose at a time taking the yearly payments, and you can choose when to quit losing. The only people likely to come out on top with the lump sum are people who already know how to deal with large amounts of money and have the infrastructure to do so. Like, I'm good at handling money, but I would have no ability to do anything WITH that much money to grow it, nor would I know where to start, and... I'm more responsible with my money than a lot of people...

@hymlog 3 месяца назад

...Yep I've Done it Twice ....best deal.

@dng151 Месяц назад

I would take a lump sum because nowadays, you don't really know how long you are going to live. That kind of money is going to last a lifetime if you don't spend it on very expensive stuff.

@ziggyj691 15 дней назад

The real winning lump sum amount is closer to 33% in most states after taxes.

@truthsmiles Месяц назад

I remember reading a survey about one hundred $1million+ lottery winners… After one year: 92 had less money than BEFORE they won 6 had more money than before they won, but less than the full $1million 2 had more than $1million Not sure if that’s true, but it sounds plausible. Taking the lump sum may be strictly better, but for ME, I think it might be better to not have access to all that money right away haha.

@henrywu0529 2 месяца назад

With tax, how would the computation change? Tax becomes deferred with annual payouts.

@KoinzellGaming 3 месяца назад

And here I am thinking - you don't need to work a day in your life, you can just let the lottery guys send you money and it will be more than enough for a luxurious lifestyle, especially at the end. The lump sum has so many things that can go wrong - such as people kidnapping you, blackmailing you, bank issues, etc.. Most people will f up with the lump sum and if the greed doesn't get to you I'd recommend the slow payments as you'll be set for life either way and you won't give yourself the opportunity to f-up the great thing you have going for yourself.

@ruperttodd8639 2 месяца назад

Hello, the annuity interest rate is currently 5% for the power-ball

@TheNetwork 8 дней назад

Always take the yearly payments

@vontar1 4 месяца назад

another reason for Lump some. what if later the do away with the Lottery and cancel all future payments or the system actually goes broke and doesn't have the money. Yup, taking the lump sum now. Hiring a lawyer and accountant same day.

@H2Dwoat 4 месяца назад

Hi, I’m curious, do the annual payments become part of your estate if you pass within the 30 year period? I’m in my mid 50’s so could easily pass before the 30 years are up.

@aaronjjacques 3 месяца назад

did you factor in the taxes paid on the lump sum vs the staggered payment.

@riod43 2 месяца назад

You're better off getting the lump sum and putting it into an ETF like SCHD with a +3% dividend yeild and an average return of +8%. You can double it in less than 10 years.

@rsb7608 12 дней назад

Yes, we are all Warren Buffets

@ICanCreateThat 10 месяцев назад

Is that total amount IF you don't spend any of it?

@MYZS 3 месяца назад

Investments, no matter how safe, are still a risk... the 30 year plan would force me to control myself in spending and help me learn how to handle all those massive sums of money I think I'd go for installments, but no one will win really so

@abadhaiku 4 месяца назад

What about selling the annuity to a brokerage firm in exchange for a lump sum? Would you receive more than the lump sum the lotto offers?

@serenitygarcia8669 2 дня назад

not sure about other banks, but my high-yield account has a limit.

@ryantesta4493 4 месяца назад

Claim it with a trust!

@euanthompson 4 месяца назад

Did you account for, I dunno, spending any of it?

@Tincanburk 2 месяца назад

Better idea, legal contract with a CANADIAN who pays zero taxes on lottery winnings. Canadian cashes ticket and has legal debt to pay back 90% to the USA ticker buyer. Two people win but the IRS looses.

@markmarque2592 4 месяца назад

like mail lottery application form😊😅😅😂

@Dimitris_Datseris 4 месяца назад

Take a lot of money, use it to make your own business, make money annually and also never worry about the inflation, ( if you follow all the instructions )

@kaalay6848 3 месяца назад

now that I know how to collect all I need is to win

@logicalmisery3737 10 месяцев назад

If you take the annuity, then sell the note, could you get more than the lump sum?

@Justkevin377 10 месяцев назад

Most people will just lose the lump sump fast so that is why I gave a thumbs down. Just take the payments.

@geneevans7885 13 часов назад

In 2024, lump sum. Before 2020, annual.

@jimmers112 4 месяца назад

Always better to have the money upfront

@madman21779 5 месяцев назад

Hey humphrey this is something I have been think on for a while but honest don't know the math to work it out while after 30 years you would end up with more with lump sum what would be the interest with the payments after 30 figuring that you will be constantly investing over 30 years because it does not seem like people take that into account

@jakedawg253 4 месяца назад

The better choice is over time if you're young enough cause you can't blow it all right away

@richardrodriguez6689 Месяц назад

Beside that also in 15 to 20 years due to inflation that money would also be worth less.

@timothymorgan95 10 месяцев назад

Humphrey, what are your thoughts on the great reset and how will it effect investors?

@haxalicious 4 месяца назад

It's a made up thing by rich ppl who aren't affected by it to excuse all the terrible things they're doing 😂😂😂

@cameronjadewallace Месяц назад

Look, I don't know how long I'm living, but I can't guarantee it's gonna be ten years.... I have have problems to get rid of NOW, not later.

@bigwill1890 4 месяца назад

I would take the annuity. I like an annual salary every year.

@viperstrike2010 10 дней назад

Don't they cut the payout in half if you take the lump sum?

@rmar127 4 месяца назад

Or if you live in Australia, any lotto winnings are paid in full and are completely tax free. You will have a tax bill on any interest earnt, however you’ll never pay a cent on the principal.

@alexvang3228 9 месяцев назад

I bet the winner will never watch a video like this

@localmenace3043 4 месяца назад

I don’t have 30 years in this earth to wait for annual payments and I have bills now, so…

@judalea17 10 месяцев назад

lump sum; who knows what 30 years will be like, or even if you'll see that (I wonder if the remainder can be willed to someone else?) Even if it can't be left to someone else for the remainder, it's way more money than most people could ever imagine having in their lifetimes, and at least having the money now means that it will be included in the estate

@danhoyles 10 месяцев назад

Much bigger problem for most winner is sudden change in life style and how family/friends change around them. No lotto winners went broke regretting ah I should've taken different payment option. This is least of their worry.

@big-rob6677 2 месяца назад

You are not taking into account that you get taxed on that 500M lump sum as ordinary income at the max rate.. so in reality, you are getting roughly 300M by taking the lump sum off a 1B lotto winnings. Annuity is the better choice assuming you are wisely investing. Especially if you are younger. If you are 50y/o+, then lump sum still makes more sense, even at a loss

@nic7nic 4 месяца назад

Well that doesn’t really work. If you’d actually spend the money, you’d get less interest. Furthermore, at the end of the payment schedule (for instance at year 20) you’ll also have a lot of cumulative inflation, in year 20 it’ll be 1,02^20=48% (assuming 2% inflation per year).

@TheNate7132 3 месяца назад

If you take the payments it's hard to be broke for at least 30 years

@alexandersanchez615 25 дней назад

Everything you make after ,including interst, is taxable, and your not factoring fees

@lostkhaz 3 месяца назад

Where does the money come from in a savings account

@javiernajera8420 5 месяцев назад

So cash out the lump sum and wait 30 years to spend it. Nice!!

@joshuaamoroso4809 4 месяца назад

You forgot about tax. The lump sum is less, then the taxes take another 45%.

@mommadontknow 17 дней назад

Take annuity.. easiest loan to borrow against

@elalemanpaisa 10 дней назад

Only if the oracle tells the truth and there are no financial crisis

@dinoblacklane1640 4 месяца назад

In other words If you are smart with money, take the lump sum If you are stupid with money, take the yearly payments

@xXZachrawXx 4 месяца назад

Hold up, hold up, HOLD UP! How about we talk about what the odds are of an individual actually winning the lottery

@rafalogrodnik3855 14 дней назад

Great

@pc-ft9dy 4 месяца назад

if you aint good with money now, you won't magically be good with money if you win. sadly most people arent good with money and should get the annuity

@ReanuKeaves1 10 месяцев назад

Can you make a video on what the irs uses our money for specifically?

@jackiecs8190 9 месяцев назад

Do you mean... the federal government? Like, military, transportation, and education spending?

@ReanuKeaves1 9 месяцев назад

@@jackiecs8190 There’s much more where IRS spendings go to than what you listed.

@Anon-nv7bp 6 месяцев назад

@@jackiecs8190 combined that's not even the majority. mostly it's spent on welfare, pensions

@rsb7608 12 дней назад

Lump sum - all into NFTs

@richardcampbell7903 3 месяца назад

You won't see 516 mil. You forgot Uncle Sam's share.

@no-damn-alias 4 месяца назад

Any chance you could get any tax break like with an Roth IRA or 401k?

@MusicMike747 Месяц назад

I’m convinced the only person that benefits from the annuity would be a very young person with terrible money habits. They would be wise to put the guardrails on

@Jjeffjenk 2 месяца назад

But if you are 70 yes old what should you do?

@TheScrimbliestBingus 10 месяцев назад

Nah, I'll choose the annual payments. I just need the extra money each year to pay my mortgage.

@redscorpion9325 10 месяцев назад

If you make that much money,why are you thinking about Mortgage 😂you can easily Pay it off in full and get rid of the Mortgage

@jasper5902 9 месяцев назад

How do u pay the taxes tho

@jbenk07 4 месяца назад

What about taxes on the lump sum?

@AosmoYT 2 месяца назад

Nah I rather get it yearly as I am not confident my self because even if I get successful I am gonna have way more problems and gonna lose it some way yea u can do it in a smarter way by a financial manager which I would but still I rather get it yearly and give it to give family if I die

@Ryan-um8ug 10 месяцев назад

Ummm what happens if a Canadian 🇨🇦 wins? Would we have to pay tax?

@Ryan-um8ug 10 месяцев назад

@text_humpreyyang do we get it tax free :)

@KingDez808 10 месяцев назад

The UK is the only place that the winners get 100% of their winnings tax free.

@timnewton1073 4 месяца назад

It's the better choice if people can be wise with their money, but since hte majority of them go broke in the first few years it may be wiser to choose the annuity and make it less likely.