What is better to take half of sum of the lottery at once or all sum for the next 28 years?

Question

What is better to take half of sum of the lottery at once or all sum for the next 28 years?

Answer 1

Let's say you win $100 million.

If you take the payout you'll get $50 M. Taxes on that wll be 30% or $15M.  So you get $35M.

If you take the annual payout, you'll get paid $100M minus the 30% on each annual payment meaning you'll make $70M.

There are several ways to protect this as well, you can set up a LLC to recieve the payments so in case of death, the payments don't stop and you heirs/surviors can continue getting the payments.

Also, if you take the annual payout, you can shop around for a businesses that settled structure settlement/payments so you can get paid now.  However, you'd want to make sure it was better than the aforementioned 50% the lottery people take.

Answer 2

The lump sum is always better if you have self control, excellent financial knowledge and/or a very good, trustworthy, accountant. If you possess neither of those things, you may want to take the payments.

Answer 3

The effective yield of time payments isn't very good.  But tax considerations also apply; if you take the whole pot at once, the tax people will take a goodly bite.  I would let the decision be based on age; if you are fairly young and earning good money, take the time payments; otherwise, take the lump sum.