How Much Do Lottery Winners Pay in Taxes? $669.8M Jackpot!
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- เผยแพร่เมื่อ 9 พ.ค. 2024
- Someone just won the Powerball Jackpot Ticket worth $699.8 million dollars!! And it’s the 7th largest jackpot-winning n US history. And it got me thinking... How much do lottery winners pay in taxes?
& What would you do if you won the lottery?
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So in this brief video, what I want to do is break down how much taxes the recent $699.8M Powerball Jackpot winner could pay.
Timestamps:
How much do lottery winners pay in taxes? (0:00)
Lump-Sum vs Annuity Payment (1:54)
Taxes on the Lump Sum Payment (2:48)
Taxes on the Annuity Payment (4:06)
What I would do (5:06)
Which one would you take? $496 million dollar lump-sum…. OR $23.3M per year? I’m super curious, tell us in the comment section below!
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Disclaimer: The information provided in this video is for informational purposes only and is not meant to take the place of professional legal, accounting, or financial advice. If you have any legal questions about this video or the subjects discussed, or any other legal matter, you should consult with an attorney or tax professional in your jurisdiction (i.e. where you live).
![$1 Billion Jackpot: Would You Take an Annuity or Lump Sum? [Financial Breakdown]](http://i.ytimg.com/vi/sGn2EdFGyqU/mqdefault.jpg)
Would you take the lump-sum payment or the annuity??
Lump sum “tomorrow is never promised”
I would take the lump
Annuity
I would take the lump sum do to my age if younger it would have been annuity.
lump sum. can’t trust these socialist. what if you have to pay 80% tax in 10 years
In Australia we pay $0 in taxes for a lottery win. Lottery in Australia is TAX FREE.
Same in Canada.
Here in America the politicians are way too greedy for that my friend!
Merica !!!!
America, home of the brave and land of the confiscatory taxes (and greedy politicians).
I think that's every country that has a lottery only in the US the government takes money from your winnings even though everyone who bought a ticket already paid taxes on that dollar they used to buy the ticket
100% taking the lump sum. Who knows what tomorrow my bring and how the tax situation can change (depending on which political party has control). The taxes are 37% today but could be 40%+ next year. I would hire the best professional team I could to help me with investments, tax strategies, estate planning, etc. You could invest enough of that money in dividend yielding stocks to have a yearly income where you never would need to touch the principal. Also, the annuity is not one single lump sum each year. It is a scaling amount that increases 5% each year. No way I would ever consider taking the annuity.
I'd say this comment was the most reasonable thing I've read and heard on this video lol
The ultra rich will always be taken care of by the US government, but your point is well taken.
I agree. The world is changing, daily. Lump sum makes sense to me, but everyone is different.
I would be fascinated to know what top accountants and investment advisors would say to weather the coming Communist Great reset.. They claim you will own nothing. Even homes and farms will be confiscated. Gold will be seized. Everything. So what could you do? Just invest canned goods guns and ammo?
Lump sum. Pay all the taxes once and be done forever. Since my time is short, I would live off of the remainder and be happy because you can legally prove you have zero income after that. Turn the tables back on the tax fiends with zero income and have them pay you subsistence because in their eyes you are technically in poverty with no income. For now you are taxed on oncome, not possessions.
Spend what is left giving you and your family some security in things that are not based in fiat money. Gold. Silver. Ammo. Weapons. Tools. Food stores. Shelter. The rest of the things you can buy are not really eligible for true ownership since someone has to grant you a title (cars, land, and homes will be confiscated when the state bribe-taxes cannot be paid) and it's use can be revoked at any time by the tyrant of the day. The things you can purchase now need to mean something for when the currency becomes wall paper. This is going to occur sooner than you can imagine.
There are two factors, actually three as to why I’d take the lump sum.
1) I’m 56 years old. I’m not guaranteed to live until I’m 90.
2) If I took the annuity and died before the 30 years of payments, the lottery prize is not transferable.
3) I’ve never been rich before. If I did go broke, I’d go back to a life that I never complained about before 🤷🏾♂️
Your wrong on that, you can leave lottery money to your kids or whoever you want. Years ago you couldn’t leave the money but it has changed.
@@kevinz0681
Thanks for the heads up. I would have just given the ticket to my 27 year old anyway. She would take care of me and split the rest with her two siblings.
@@caipirinha_king1632 lol no problem, I know somebody that hit in in 2011, he took it over 30 years he passed away about 6 years later. He left his son the money and he had to take the rest all at once. So needless to say he didn’t get the full amount that was left was pretty much half.
you take the annuity and die it goes to your estate or to who you setup it to go to
So true 👍....
I accidentally stumbled across your video and here's my answer....
Im in my late 50's, I choose the lump sum for several reasons. #1 my age is a definite factor. #2 The taxes... Its better to pay all the taxes up front and not have to deal with them later. #3 With the remaining amount after taxes...
You invest 1/3 of the remaining balance in annuities and security bonds, give 10% to charity, set aside separate accounts for annual property taxes, fed, state, local taxes, expenses, vacation, an emergency fund, a trust for my beneficiaries and still have plenty left over to purchase a modest home, retire quietly
And enjoy the remaining time the creator wants me here.
As far as the taxes go...
Should you choose the lump sum....
You are taxed on the lump sum, including state tax in the state where you purchased your ticket and if you live in another state that doesn't have the lottery, you also have to pay your home state income taxes, if your home state has taxes as well for the year you won the lottery. But...
If you are smart, you'll have a financial attorney set up a trust and an non profit LLC prior to collecting your winnings because that trust and non profit llc will shield your winnings. Additionally you can give away up to $15,000 gift to anyone your choose and its a tax write off. Ive done my homework to prepare😉
Loved how you say "enjoy the remaining time the creator wants you here" it's good you researched The best way to manage your winnings
I’m signing the ticket in my name. Paying whatever taxes. Whatever is left is enough and I won’t have to deal with professional crooks
You won't have to deal with professional crooks but will have to deal with long lost relatives and their hair brained schemes.
@@paultennis9414 nope ......one of the most important things to learn ....
.is how to say no ......people will try to put you on a guilt trip and will come out of holes in the ground ......but I'll make sure they're escorted back to those holes.
@@paultennis9414 If you keep your mouth shut you won't have to deal with people knowing your business.
@@charlesljones2454 I wouldn't give money to anyone when I was sweating my ass off working to earn that dollar no one was there helping me
@@charlesljones2454 that's only when people did things for you..
In the UK the Government takes the tax as soon as the ticket is bought so the winner gets the full amount advertised.
Same here in Australia
Must be nice. American government is trash and has always been greedy.
Not long before they will do that here, all the same group wanting the same rules
@@SidneyXda America is greedy here they want to tax the hell out of you for years so you pretty much win like 30% of the money.
Wish they would do that everywhar that would be more simple for budgeting and a fixed rate and allow you to gain more wealth than you loose which is return helps the economy
This is so helpful. Thanks, Sean!!
Fun fact...the advertised winning amount is half of the actual ticket sales. In this case the winning amount was $700M, but the state collected $1.4B in ticket sales. THEN that all gets taxed several times.
Take lump sum
@@lavernbryant know why they call it lump sum. because after they take out taxes you feel like they've beat the crap out of you.
@@illudiumq36spacemodulator39you enjoy it trust me
@@illudiumq36spacemodulator39579 million cmon now
Pretty good advice. Here's some I got from an investment professional years ago: Take the lump sum payment. HOWEVER, if you had almost $500 million coming, have $300 million of that go directly to a "Charitable Trust" that you get set up by a professional/attorney. That will NOT be taxed by any entity. Take the other $200 million and pay the taxes on that... a lot less than $500 million. Then, make yourself executor of the Charitable Trust. You could even take some of the interest earned by the trust and pay yourself an annual salary, although that will be taxed. So, you give money from the trust to worthy non-profit organizations that need the support and you live off off more than $100+ million. You're still RICH and you get to do great things for your community. Honestly, if you can't live on $100+ million, there's something wrong with you.
David-that's some good advice I never knew that-Thanks!
@Beeloe hell no! Your just putting it in a charitable trust to not pay taxes on it. Yes give some of it away but you’ll always be gaining interest so you’re really not losing
I would have to check but I think that falls under tax evasion. Don't quote me on that 😂
Great information! Thanks!
That's probably what Gates did.
Thanks... Im going to win the lottery and I definitely needed to know this. Exactly why it popped up in my feed.
Great video. Very concise and to the point. Excellent 👍
I am 67 I am taking the lump sum, starting a charitable trust to minimize taxes and then working with charities to move the money. A lot would go into investments. I feel the lump sum can be managed better than the lottery commission and will ultimately yield more than the full value
Thank you so much for your content! You are certainly appreciated!
I appreciate that!
Thank you for this. I’ll be needing it tonight
Thanks for this info
Very helpful
Very easy to follow
Liked!
I'd take the lump sum. I'm not really saving money by doing annual payments because I'm not interested in investing or making more money. If I win hundreds of millions of dollars I have more than I need. My sole focus would be to first take care of my tax obligations and any debt I may have. Then I would set up my estate and living will and any other legal matters I needed to take care of regarding what happens to my fortune after I die. Once I have all those things taken care of I would donate a portion of my winnings, buy myself a nice house, then live a happy financially free life where I can go wherever I please.
That's exactly what I would do.
Lump Sum! 😜 Pay the taxes and move on.
If you won a hundred million dollar lottery, took it as a lump sum, paid the state and federal taxes you'd wind up w/ around $38M.
Excellent content!
Before I even saw this video, I've already decided that I'd take the Annuity Payment Strategy if I were to win the Lottery. Having watched this video, it gives more thought to strategies that I could do. Great Video! "Thumbs Up!"
Congratulations to all the winners out there🎉🥳
I enjoy the team and the information y'all are putting out thank you!!!
I have a lot of fun making videos like these, thank you for watching!
Personally though I'm 73 now, and needed less than I did when I started play the lottery at the age of 65. I realize that wining any more than a million after taxes is considerably more than I'd ever spend. Thus would give any and all the rest back to the lottery or donate it to one or more legal agencies. Tis ironic, but when my daughter found out of my plan, inregards to my winning a large lottery, stated that if I did what I planned, she'd have me committed. LOL
STOP THE CAP
Wm are you without children and grand children? I have already planned to share with the family in my tree. I would set up living trusts for all the grandkids so they can have it at 18 and be able to loan money to their parents. I always put the family in my tree first
@@garyfinger294 I would strongly recommend deferring the access to the age of 30... like fine wine, let the children mature and be able to make good choices with your gift.
If I could pass it on to my children I’d love to take the long term payment.
But you’re right, having that much money all at once would be quite difficult to manage. So I guess I’ll go lump sum and make good money decisions 🙏🏽
Annuities get passed on to your estate if you die.
@@qosmo8 Annuities might, but most lotteries do not.
Almost 45 vs 55%
I love it thank you so much for making me learn alot more
Very wise advice!!! Annuity will definitely allow the nouveau rich to gradually invest, understand and familiarise with the process.
I paused the video @2:43, to truly & honestly decide which payout I’d chose:
Annuity Payout!
1. If I can’t responsibly handle $23.3 mil annually, it’s only a matter of time that $500K Vanishes as well!
2. I’d pay off my home; payoff debts; buy a dream vehicle; spend about $15,000 in compulsory spending…
3. Invest the rest! Live off the interest.
Love it!!
I would do this with the lump sum ❤️
I enjoyed this. It’s fun to imagine, agree annuity is good advice, cheers.
You just made me look at having that much money difference now,I agree with you, more video's please 🙏
I agree with you! I always wondered why most people would take ther lump sum instead of the annuity. Im taking the annuity!!!🤩
Its best to take the lump sum if you are older you might not see all that money for 29 years if you dont make it that long outher wise if you dont want to invest the money than annuity would be better you can still invest with annuity its guaranteed money for 29 years you will get more money later on with annuity it depends on what you want to with your life
Because tomorrow’s never promised lol 🤷🏾♂️
I would take the lump sum because of the time value of money and the fact that inflation will cut the value significantly over time.
Also, David M., the Annuity isn't transferable until it runs out. I won't be able to give it to my spouse or children in the event of my untimely death.
Annuity without question. I view an annuity as a long-term strategy to not only ensure that I keep the wealth but adapt to being wealthy over the long-term. Another reason I would take the annuity is because it would limit my access to the money. I am very soft hearted and know I would give a lot of it away. The annuity would force my hand re: gift-giving.
When I was younger I would have taken the annuity because it would have been a guaranteed income for the next 30 years. Basically, for 30 years I could never go broke. But now that I'm 55, I would take the lump sum. My mother died before the age of 70, my dad died in his 70s. Taking the lump sum insures I get the most money without dying before I get my payout.
As an insurance agent I love Annulties but if you die before it’s totaled paid out then family is screwed
Lotteries are inheritable.
@@cautiousoptimist only in certain states
Age is a big factor. I'm 51 and I would take the lump payment because I want to have the energy to do all of the things the money can provide access to doing. It won't matter if I'm 70 and have the money to hop skip around the world but not the energy to do so.
I'm 51 too dont worry we are not gonna win ☺
@@jamesadcock5235 Haaaaaay...speak for yourself. I will ☺️
48 here, and I would absolutely go with the lump sum. Max out my Roth for the year, and put a nice chunk into my taxable investment account. I'd continue to work for at least awhile, and move nearly ALL my salary into my 401k and Roth options, so I'm living off off the lottery winnings, and allowing my pre- and post-tax investing to add up a lot more quickly than it ever could otherwise.
Pay off the few remaining debts I'd have, set up 529 college savings plans for my nieces and nephews, and prepare for a VERY long trip to some favorite countries around the world.
@@bryansproles2879 There you go. You already have a plan 👍🏽
Absolutely. I lived in a tourist state when I was young and after watching all the old tourists slowly walking around looking at things decided to move to Europe so that I could enjoy that stuff while I could still get around easily.
Now I'm in my 50's and can no longer afford to do that, but definitely have a lot of great memories of my decade overseas.
Do it while you are young and healthy enough to enjoy it people, you only live once.
Thank you for the informative video. Looking at the situation at a glance, and given my age (50), the lump sum seemed to be the likely choice right now. I’ve been playing the lottery for 32 years, and even back when I was younger, I realized that the annuity was a better option in the long run. Now that I’ve seen this video, it’s given me a new perspective on an annuity payment, even at my age. I’ve always said I’d live to be 100 anyway, so I suppose the annuity option would make sense in that respect. A big factor also is what the jackpot is. If it’s big, given what you said, the annuity makes sense. If it’s small, then I’d probably just do lump sum. 💵💵
how many times you won the lottery?
Have you ever thought how much money you would have now if you never played the lottery?
@@thesonalasijashow That depends on what you mean by “win.” If you mean a major lottery jackpot, never... at least not yet. But there have been many small winnings from various games over the years.
@@glenjamindle Yes 😒
Good luck living to “100” , and may your quality of life be what you hoped for when you get there 😉
Now that you explained yourself very well. I'm definitely it the boat with you big dog the annual payment is a much better route
I'd take the annuity. Getting a smaller check every year makes it easier to manage. And it forces you to budget.
Depends on your age.
Tomorrow is NOT promised. Your loved ones don't get to receive the annuity.
There's a very old saying that is absolutely true: "A bird in the hand is worth two in the bush." We can't predict the future. Do you want to leave millions of "future" dollars to whatever happens in the future?
I would take the annuity. Thank you for answering my question. That is something I've wondered about. God Bless!
Good Stuff,Great Tips😄👍🏿
I would take the lump sum payment for several reasons. 1) You have no idea what can happen in the next 30 years. 2) A bunch of things could go wrong and the market could collapse or the taxes could raise to a higher percentage each year, meaning you would have to pay more. 3) My state tax is extremely low, so I would pay almost nothing in state taxes.
Don’t forget inflation, the buying power will be less.
It even can dollar became nothing
I have just read several comments. Everyone has very good points and knows what the fk they are talking about. I’m definitely taking the lump sum. May one of us have that difficult decision to have to make
Excellent! Thanks!
🌻
I live in NY. I like the way you broke it down. I hear from friends say " go for the lump sum and after hearing this. I'd go with the annuity. It makes a much more business sense. Thank you for the education....I guess I have to set the record straight. Lol.
Based on age the lump sum would be better than an annuity but other than that your depending on the State to pay you regularly. There have been a few instances however of the State running out of money and delaying or even stopping payment for a period of time which could be disastrous if your surviving on those payments.
If you are 35 take the annuity. If you are 75 and don't expect to live another 30 years lake the lump. You probably won't live long enough to spend it all unless you go hog wild and then someone can make a you-tube video about you.
@@j3lny425 lol bad advice. Take the lump sum in case anything happen especially you dont know their value in 30 years from now they either become worthless or worth more and as far as inflation go it gonna be worthless
This was informative, but I have a question...I’m An individual who unfortunately lives in a state that does not have lottery. So if I were to win in the neighboring state What would that mean for my taxes? I know I would have to pay taxes in the state I won so would I also have to pay taxes in the state in which I reside?
You would only have to pay the state tax that's the highest. So if the state tax is higher in the residing state you will only have to pay that state tax OR if the state tax is higher in the state that you played it in you will only have to pay that tax.
I think the answer depends on the states involved. In some states, if you win as a non-resident you do not pay the taxes there. In others you do. Then your home state may have rules on where the income was from. Some states tax income from other states and some do not. Worst case is you win and have to pay both states income taxes. Best case is you only pay one state's taxes.
Or you can move now to Texas. We have the lottery and no state income tax at all. You only need to pay the federal income tax on the prize. There are a few other states with no income tax and that have lotteries you could choose from too.
If you opt for the ANNUITY pay out, at anytime in the future, can you get the remaining amount left there-in as a lump-sum. Are there fees any penalties associated with doing this, if applicable?
Great job Sean. Love the suit too.
Starting early is the best way of getting ahead to built wealth, Investment remains the priority, the stock market has plenty opportunities to earn a decent payout, with the right skills and proper understanding of how the market works
Wow I' m just shock someone mentioned expert Mr Jasper I thought I'm the only one trading with him
He helped me recover what I lost trying to trade myself
Mr Jasper is the best when it comes to trading
My first investment with him gave me profit of over $24,000 Us dollars and ever since then he has never failed to deliver and I can even say his the most sincere broker I have known
I'm a huge fan of crypto, I hold some few coins in my wallet..
Here in Canada, lottery winners don’t pay taxes on there winnings.
From what I understand The annuity payment distribution is equal to the estimated value of what the total jackpot would be valued in 30 years. The lottery commission determines that value
If the lottery commission deems that they have honored the estimated value with 25 years of payments. You won't get the remaining 5 years of payments.
Please correct me if I'm wrong.
I have a question so if you take the lump sum do you pay the taxes once or do you have to pay every year?
I've thought about this a lot. I'll always choose lump sum. I could invest half of the take home and come out further ahead than the 30yr payout.
Besides I'd hate filing large tax returns like that annually
lump sum means only being taxed once, but the annuity means being taxed every year for 30 years. Every dollar earned over 2 million is a flat tax rate so your better off taking lump sum.
Don't forget about the 1098 INT you will get every year on interest earned on the invested portion.
I read through a lot of replies and everyone is going for the Lump. My greed says Lump and my head says Annunity. 1. First of all winning the lottery AKA financial freedom means I can be free of working or investment choices and worrying about how to increase my income or avoid loosing my lifestyle. 2. Not all at concerned about spend it all up during my lifetime I would like to leave behind a legacy. 3. With a Lump youI can always mess up that money in a million way but as long as the Government owes me a big check I can rest at night. 4. If I find I have a need for a great deal more cash for say an investment opportunity then my borrowing power is still crazy anyway.
@@Detroitblue i wouldnt count on the goverment "oweing" you anything lol. Talk to some people in the armed forces or government jobs, aside from the great benefits and free health care, there are literally hundreds of reasons they could come up with to deny/delay paying you your money, because yeah you will die and 30 years is a pretty long time if youre already 50+.....just saying
@@Rye___ Yes there is the very real possibility that somehow your money can be withheld. Either way there are plenty of pitfalls.
This young man's reasoning as to why he would take the annuity over the lump sum is exactly the reason that individuals and businesses should never let accountants or lawyers be significant decision makers…
hid entire mindset is reduce tax liability and never wants to see stop the pies and think that having the massive amount of money he will receive from the lump sum could provide him with opportunity to generate significantly greater returns than he would ever save via tax avoidance
He also thinks that he somehow is going to reduce his tax liability by about 80% on an annual basis through tax avoidance methodologies that also arent needlessly spending his $$$
😅😅😅
Right! You never taking annuity unless you have very bad addictions and need to be micro managed a salary. The money is just sitting there not earning anything.
Hookers crack cars...5yrs you would be dead
Also, if the name of person collecting the annuity passes away, the contract goes to next of kin, or named person in will, they will have to pay all the taxes on the whole amount left in contract before they collect a dime. It usually takes 5 to 10 years of what was the original amount payed out every year between parties now solely going to federal and state just because it changed hands after the passing of original winner. This guy does not tell you this. Take the lump sum, put a extra 15% away for other taxing entities to come along just in case, plan out the rest with a estate planner for less taxes, and portability to whom you decide in your will.
@@trigun989 What do you mean the money is not earning anything? Did you ever hear of a little thing called INTEREST? If you take the annuity what is due is also invested which can build up the annuity over the years till the final payment, You can benefit from the investments made with your money. You do not lose if the investment are bad. You still receive what you have won.
Actually read what you said. If you have addictions the yearly payment prevents you from losing everything all at once,
Some good points, especially 1 time to learn wealth management, and 2. Time to develop tax strategies. Still, if you analyze the lottery winners and the pro athletes who went broke, I bet most either never listened to their accountants and attorneys or never hired them in the first place.
If you are willing to search for and hire good professionals, and, most importantly to listen to them, then take the lump sum.
I don’t know why this video was randomly recommended to me out of my usuals. But Thankyou, might be a sign from the universe I might be the next winner soon
For me it would depend on what happens if I die before it's all paid to me. If my wife and kids can still get the remaining payments then yes I agree with you. But if they can't then I would go with the lump sum. I want to make I leave my family with as much as I can! And thank you for this info. You have put this into a better perspective for me!
Create a trust. And have the trust receive the annuity payment. Then have the trust make monthly or yealy payments to you and your love ones.
I would take the lump sum and instantly put it in a trust 💯
Thanks. Great advice.
Question. If I’ve been living in Puerto Rico renting a house If And I buy the Power Ball in Puerto Rico but I still have a house in Ga and all my I’d are still from Ga. Do I pay taxes from Puerto Rico or Ga? Or both?
Being a foreigner (Canadian), I would definitely take the lump sum payment.
I believe the withholding tax is 30 percent. I am assuming that I would be able to file to recover the withholding tax, unless it is legislated otherwise.
I don't know when my next trip to the USA will be, but I cannot wait to get a ticket for an enormous jackpot lottery.
Hopefully, I would be in a state where my identity wouldn't have to be revealed.
Okay...back to real life now.
It's actually 25% for federal, and you can't recover it. You also have to pay state tax too. If you are a US citizen or legal resident, you''ll pay income tax during tax season too. I don't know about laws for Canada citizens though.
Another fact is if you live in the state that forces you to reveal identity, you can accept the money by forming an LLC or trust so that your name is safe from the public.
@@longnhi31 not all states have those taxes
@@andrewsanderson5277 Do you mean state income tax?? Then yes, I do agree.
@@longnhi31 yes I belive their are about 10 states that don't have state income tax
@@longnhi31and not all states will let you claim it under a trust. That's why the 2 billion dollar winner's name is known.
Something you neglected to mention in your lump vs annuity decision...If a person chooses the payments and dies before the end of the payments, they CANNOT put the balance into their will for someone else. Whatever the remaining balance is goes back to the institution (In this case the remainder goes back to the Powerball game for future 'winners').
Most states allow you to name a single beneficiary (some allow multiple) that would continue to receive the payments after you pass. If you need more than one (multiple kids etc) then you can simply set up a trust that the money gets paid into & whom your beneficiaries has access to. Even if you pass without naming a beneficiary or will, the remaining money would actually transfer over to your estate. So if you have family, they would all run to get lawyers & fight for it.
Sounds like fraud.
Even if your state does not allow for a beneficiary of lottery winnings, any money you invest of the annuity payments is transferable to you heirs.
@@jamesh8862 yeah thats not going to work in MOST states, youd have to win in Idaho or something because that shit is not flying in New York or Cali
Can you do the same estimate for casino wins (slots & coin pushing) 8 publishers clearing house sweepstakes? I live in Ruston, LA & the Henderson Financial does my taxes every year.
Lump sum, more so to simplify the process (risk of annual payment not going through, lost in mail, etc…) as well as optimize as I see fit. Invest all post taxes, & operate using dividends from assets.
I totally agree with you and the main reason for me is AGE!! If you are off retirement age then it really does not pay to get the Annuity since I will not be alive to enjoy it unless I have a family that can enjoy the money during that time. It also depends on the amount you win if you won like 5 million then it doesn't pay to take the annuity. You can take the lump sum and invest most of the money into real estate, stocks, gold or even opening college funds for your children or nieces and nephew. I would also donate to some charities like St. Jude and that is a tax deduction...:) Thanks of letting people know what to do as MOST do not!!! They say after you claim it disappear for a few months as everyone from lost relatives, scammers and charities will be hunting you every second of the day......:((( Change your email address and phone number and only give it to the people closest to you!!!
I would think that taking the lump sump and investing that in an s&p 500 index fund will generate far greater return that the annuity. I understand that his primary focus is to reduce tax liabilities and getting close to the full winning amount but in my opinion, getting the lump sump and investing it would generate more money in the long run.
Correct.
I am 73 years old, so my inclination would be to take a lump sum. I would take half my winnings and wait out till my tax damage is covered. Half of the 700 M would hold me over just fine.
So if you were to buy gold with the net amount would you still have to pay tax annually?
People don't have that kind of discipline. Plus, you can take that $268 million and invest it in the most conservative assets you can find, and do much better than the annuity.
But the best strategy is probably to take the lump sum, put it in the bank and don't waste time worrying about "investing" or reducing future taxes. You don't need to invest $268 million dollars. You can put 90% in a trust for future generations and still have more money than you would have earned in 50 lifetimes.
Or, do what I would have done and put all $268 million in Dogecoin and Luna -- oh, wait...
In Canada 🇨🇦 lottery winners are not taxed at all but the highest payout Jackpot ever gets is 70 million dollars
Maybe they did an after-tax for the jackpot.
@@grantlam9247 no Canadians don’t get taxed on lottery winnings I have won several large prizes multiple times $10,000 3 times and multiple $5000.00 dollar Wins all gamble winnings are tax free 🙌🙌
Did you adjust for inflation on annuity vs the money you can invest having a lump sum?
If I take the annuity and pass in a year, does my family continue to get those payments or does that money stop?
I agree with you. Annuity is good for people who are either really young (
ANNUITIES were created toi legally steal your money by those who know the majority have no clue that they're being robbed.
Then, you NEVER leave the government (or anyone else for that matter) in control of your money. The government can't manage their own, how on earth are they going to give you what's yours??? They've #BULLSHITTED you out of your money all your life, and now you want the government to look after your money? THAT'S PLAIN #STUPID.
Besides that, inflation will #DECIMATE your money in a few years...
There are no taxes on lottery winnings in the UK. The whole amount is yours to keep. That's what I call a true lottery winnings unlike the vulture US government milking you in every possible way they can.
Your largest lottery has only been 235 million (US). So, it looks like it works out the same.
In my state (CT), anything over $599 has to be cashed either at the lottery headquarters or at s high tier claim center.
They take out a flat tax rate of about 30% federal and about 6.5% state on all lottery winnings should you want to have them taken out there and then.
Thats good advice, with the annuity payments you can start making connections with the wealthy because money attracts money, they will teach you how to by art and make donations that will count towards tax deductions
Over 30 years inflation will skim 40% of the top.!!
I'd go after the lump sum payment. You could then invest the money in real estate syndicates (with your Accredited Investor status) that typically pay 10%-15% per year, this works out to slightly more money paid per year than the annuity (while still having the "nest egg") and isn't capped out at the 30 year timeframe, hence it's available if you live longer or want to provide a legacy to your heirs.
I'll get right on that with the 50 bucks I won yesterday
I would have taken the annuity if I were younger like you, but I'm over 60. I would take the lumpsome. You gave some good advice.
If you take the annuity is that transferable or inherited by a beneficiary of your choice? Or if you pass away what happens to your winning $ ???
With the staggering inflation rates getting worse & worse every day, the annuity payment seems less attractive. 2 million dollars 30 years from now might only be worth what 500k is worth today. Lump sum all the way. Spend several million on charities/non-profit foundations in order to get some insane tax breaks
The annual annuity has never been attractive, ever. Present Value>Future Value.
I'm ashamed to admit this but I would take the annuity because I'm not good with money
Do this at the start of August . Write down every single thing that you spend money on , and do that for the entire month , then go back and examine all of your expenses .
what did the initial $200m taxes withheld apply to? If another $200m was paid to Federal + $200m for state taxes?
Can you take the annuity, move to a state that doesn’t charge lottery winners state tax?
Australia doesn't pay taxes on winnings so thank you for this, often wondered why what is advertised and what the winner ends up with is so different!
Neither does Canada.
Neither does the UK, all we pay is tax on profitable income, in other words, the original sum is tax free, what is made in profits from investments etc is taxable, just like Canada and Australia :)
Ours is run by a criminal organization that gets a cut of the action. And some contribute a portion to worthy causes.
@@ronniestobbart4759 do jackpots in Canada ever become as big as here?
@@Steve_305 no, they top out at $70M , and anything over is split into $1M prizes.
Lump sum is the only option. Invest in dividend aristocrat stocks and live off the dividend and don’t touch your principal and your taxes on dividend payments are lower than normal income. Dividend stocks are paying an average of 3.25% so you make about 6,500,000 each year in cash
You know we will. Thanks!
I always estimate a total of 45%-50% for taxes (fed and state) from the lump sum.
Does some of the amount you pay in taxes in an occasion like that, returns in the yearly tax return? Or it’s lost forever ?
"How Much Do Lottery Winners Pay in Taxes" Nothing in Canada, it's tax free.
Managing very large sums of money is far and away from almost everyone's purview. At this point, it is all good wishes. Too many people think once they have a massive amount of wealth they have nothing to worry about. If you have never been there you have absolutely no idea what trouble you can get into. Just thinking about taking a lump sum of money from a lottery is easy. It sounds easy but it is nothing even close to the kind. The first and best thing is you hope your state has a non-disclosure law so you don't become exposed as the winner. You DO NOT go the next day to claim your winnings. Don't do anything stupid. Instead, you take the ticket and photocopy it at home if at all possible. Keep your mouth shut to everyone. If you have a safe-deposit box go to your bank and place the live ticket in the box. If you haven't signed it on the back, I suggest waiting until you take the next set of steps. Next, find the best most expensive tax lawyer and CPA you can find. Next, if you don't have a financial advisor, find one, cost is not an issue. You get what you pay for and you DON'T get what you don't pay for. REMEMBER THAT above everything else. Getting a lump sum is partially based on your age. You need to know how your state requires you to claim the money. If you are able to claim it in a trust and all the bases have been covered, lawyer, CPA accounting firm, and financial planner and advisor, you are close to cashing in. You usually have several weeks to months to claim your winnings. Good luck, you will need it again after having been the one in 300+mil in 1 to have the numbers.
I'm 66. I can yet run, not far, but yet run. I would take my money and RUN! Good video.
What if I die before the thirty years is my winnings cease or will my spouse continue receiving the annuity up to thirty years?
Lump sum and immediately move out of the United States and open up a Swiss bank account, if you take the annuity payment and get killed in a car accident 6 months later the state retains the rest of the money, The Logical option would be the lump sum so if something happens to you your family will still be taken care of
No, your heirs inherit the annuity payments.
Most states allow a single beneficiary to be named. Some more than one. Either way, a trust etc could be set up in which your family gets to receive the rest of the payments in the untimely event of your demise.
Going on 85 years old, would take lump sum
If you take the lump sum. Do you only pay taxes on the interest off that money each year?
It was me! I won the jackpot! It's very nice.
While in theory, the annuity sounds like a plan, I have my beef with it. First let me say, people who get millions of dollars and go broke are the problem. Your whole life you been living off whatever, and now you blowing through hundreds of millions of dollars. That’s insane. That means nobody ever taught you not to be irresponsible.
But the important thing is, nobody is promised tomorrow. I’m not just looking out for myself, but my family as well. Getting the lump sum means all the money the lottery owes me I have. With the yearly payment, there’s no guarantee that they’ll honor that if you suddenly die. Not to mention if they hit you with they suddenly don’t have the money. This has literally happened to state lotteries before. They couldn’t pay the people they owed.
But also, having all that money allowed it to gain interest. How much interest can ten or 100’s of millions gain? A lot I’m betting. I feel more comfortable, as a none idiot, that I wouldn’t blow every cent on cars and homes that I can’t actually afford
The lump sum is the best option. The reason is if you take the annuity then you only save yourself a 100 million or so roughly at the end. And thats only if the tax rates don't go up. Also, they can always decide to write new laws that protect them from paying you the rest of the money at any point. Take the lump sum, come out either roughly 250 million, and be happy the rest of your life. Also remember.....you only have to pay tax once in a lump sum. They can only tax you on income. So you don't pay taxes on that but year 1. There is no wealth tax.....well just yet. Biden and the democrats tried to implement one in 2021....see what I'm talking about????
Move half of that to a ui account witch is totally tax free and it is also a compound interest account as well. With that kind of money i could buy my own land charge people 500 a month to stay that pays 80% of your taxes each year and you are not loosing much
No, i don’t see what you’re talking about because you don’t know what you’re talking about.
Don't forget that you will still pay taxes on any growth of that money over the years.
Once you sell stock or whatever, you will be paying taxes on the earnings.
You'll still be filthy rich though😅
I would take the lump sum because of my age. This was a very informative video.
excellent video very good advice for seeing how I am already 72 I would take the lump sum