Also because that lump sum is all there is. If you take the annuity they put the lump sum into an investment account and then pay you out of the proceeds (from which they take a cut, of course), and you can get the same returns they get, without losing their cut, doing it yourself.
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barneypiccolo@lemm.ee 3 weeks ago
This is also why if you hit the lottery, you should take the discounted upfront cash payout, and not get it paid in an annual annuity for 20 years. You never know if the government is suddenly going become moral about gambling, and cancel all lottery payments.
Take the money and run.
Libra@lemmy.ml 3 weeks ago
Landless2029@lemmy.world 3 weeks ago
They also take a big wet bite out of the total when you do a lump sum pay out. Then you pay taxes on it too. Oh and of you do the 20 year payout and die they keep it all. You can’t transfer it.
Libra@lemmy.ml 3 weeks ago
No doubt, but it’s still a lot better than doing the annuity. Half of fuck you money is still fuck you money.
Landless2029@lemmy.world 3 weeks ago
Biggest mistake people do is put it all towards a house for a low or no monthly mortgage. It’s better to invest it. Buy two. One to live in and a multi to rent out.
chilicheeselies@lemmy.world 3 weeks ago
Absolutely. However, if you are not the best with money, or on the irresponsible side; it might be best to take the annuity. Mathematically it makes no sense to do so, but if it stops you from blowing it all on hookers and coke in two years then its for the best. In other words, if you having it all is riskier than the state keeping track of it.
spooky2092@lemmy.blahaj.zone 3 weeks ago
Even if you’re bad with money, take the lump sum and go get a fiduciary advisor to handle it and give you a regular payout. Being a fiduciary advisor is important since it means they are legally obligated to work to the benefit of your money, not lining their pockets. Using something like a trust is another good way to protect you from yourself.
chilicheeselies@lemmy.world 3 weeks ago
I mean more like someone who is irresponsible and maybe dumb. I was trying to be polite. Someone that doesnt even know what a fidicuary is.
WeirdGoesPro@lemmy.dbzer0.com 3 weeks ago
What’s wrong with hookers and coke?
aceshigh@lemmy.world 3 weeks ago
Can’t you open up a trust with the money and put a provision on it saving you from yourself?
chilicheeselies@lemmy.world 3 weeks ago
Im talking about someone who doesnt know wtf any of that means. Like the town idiot.
Droggelbecher@lemmy.world 3 weeks ago
To be fair, it’s best to not participate in the lottery.
taladar@sh.itjust.works 3 weeks ago
True but that is a situation that doesn’t really apply very often in the “if you hit the lottery” situation mentioned in the post you replied to.
Droggelbecher@lemmy.world 3 weeks ago
I guess what I’m trying to say is, don’t delude yourself into thinking you’re being smart about the lottery by thinking about which is the smarter course of action in case of a win. The only way to be smart about the lottery is to not play.
spooky2092@lemmy.blahaj.zone 3 weeks ago
I don’t disagree, but I also thing playing the lottery once in a while is fine if you’re just doing it as a daydream or something. Back when I worked in an office, if the jackpot got high enough we’d do an office pool and everyone that wanted to would throw in 10 bucks or something. And I’ve also done the same myself for the above reason but I play at most once or so a year.