Feb 222016
 

Who Would You Tell?

Awhile ago you guys were asked who you would tell if you won the lottery.  Here are the results. Thanks to everyone who voted. 🙂

16-02-poll-results-winning-lottery

 

Roughly a quarter of readers said they will keep the secret to themselves. I happen to be in this category as well. But I would tell my spouse if I had one. I think she would eventually find out sooner or later. Half of the people polled feel the same way and would tell their immediate family members. Only 4.6% would post it on Facebook and don’t mind if all their friends knew. We all have our reasons for how we voted. I personally think nothing bad will happen if nobody knows you’re rich. 🙂 But you can obviously put money to good use anytime.

Last month 3 tickets split the record $1.6 billion Powerball jackpot in the U.S. The winners have 60 days to make a decision on whether they want to take the lump sum payment, or the annuity payments spread out through 29 years, a dilemma most people wouldn’t mind having.

Option 1: Lump Sum

  • Divided among the 3 tickets, each cash lump sum will be $310 million.
  • The winner would get their money right away, but pay 40% in taxes. (The IRS taxes lottery winnings like income tax)
  • After tax lump sum will be $187 million for each winning ticket.

Option 2: Annuity Certain

  • Winning ticket holders will receive 30 payments over the next 29 years.
  • The first payment of $7.5 million will be made immediately, and slowly increase with interest to about $31 million on the final payment, with a combined total of $529 million.
  • If the winner dies the annuity payments will continue and go into his or her estate to be passed on to any heirs.
  • Powerball invests the entire cash value of the annuity in various U.S. government securities. The winner won’t be taxed on investment income within the annuity because Powerball will be the entity investing the money.

I would probably go with option 2 and choose the annuity over the lump sum just for the tax savings. 🙂 Which would you choose?

——————————————————————–
Random Useless Fact

16-02-eat-cake-in-one-sitting

————————————-

By the way, I’m currently on vacation in the Caribbean right now and won’t be back until next week so I won’t be very active on the blog in the meantime. 🙂