If I were Filthy Rich
By Put5736+15 Annuity option may be best for small wins (less than 5m)
Just thinking this through, taxes are going to eat up a huge portion of any amount larger than 1m (top tax bracket is 35% of any income above $487,450)
But if you take the 30 year annuity on something like a 4m win and take home around 100k/yr, you would sit happily in the 24% tax bracket for the entirety of the annuity.
If you won something like 100m, you’re in the top tax bracket no matter what so it makes the most sense to walk away with the cash prize.
An 11% tax differential seems huge to me and beats the market 9/10 times, but let me know if I’m missing something here.
Recent responses
+14 @GarbageOpinionsMachi For me: If you're young (under 50), take the annuity. Dont live like a rockstar. Max out IRA and Roth IRA, pay off your bills, set a generous annual salary for yourself and let the remaining sit in a general investment like an index fund. Most of us dream of this bc we hate working for other people. This kind of money would ensure you could work on your own interests indefinitely.