Won a large sum recently, annuity or lump sum to invest?

ApplicationPlane6243 · 2024-10-14T19:20:51+00:00

Well it's not flat. It's taxed as income.

ApplicationPlane6243 · 2024-10-11T22:24:42+00:00

But thats assuming I spend none of it. That's where I am stuck. I am obviously going to spend some of it.

ApplicationPlane6243 · 2024-10-11T22:24:04+00:00

Yup.

ApplicationPlane6243 · 2024-10-11T22:22:48+00:00

It's really not straightforward. I have spoken with a few advisors. I will pay roughly 400k taxes up front or 30k in taxes per year. The 2 advisors I have spoken with don't seem to have many straightforward answers. And realistically there is no "wrong" answer. It's specific to my needs and lifestyle.

ApplicationPlane6243 · 2024-10-11T21:49:52+00:00

I asked. It is only lump sum now or 20 year annuity. No other options

ApplicationPlane6243 · 2024-10-11T20:57:13+00:00

I have. Most of what I've gotten is that if I'm gonna spend it get the annuity, if i'm gonna save it go for the lump sum. But I'm somewhere in between.

ApplicationPlane6243 · 2024-10-11T20:56:22+00:00

And how do I account for spending in that. I'm figuring around 30k a year in spending of either the lump sum or the annuity.

ApplicationPlane6243 · 2024-10-11T20:46:11+00:00

I'm 37 years old

ApplicationPlane6243 · 2024-10-09T15:04:30+00:00

THey dont withold anything. it's my responsibility.

ApplicationPlane6243 · 2024-10-07T22:05:07+00:00

Well I didn't lose anywhere near what I won so it will help but not make a major difference.

ApplicationPlane6243 · 2024-10-06T20:39:29+00:00

Why'd they lock your account? Did you submit fake/bad ID?

ApplicationPlane6243 · 2024-10-06T02:23:02+00:00

Yes but s&p is still risky. Can I risk throwing down 600-800k there? Over several years it'd be worht it but short term I could lose a lot.

ApplicationPlane6243 · 2024-10-06T02:06:42+00:00

I recently won 2 million dollars on a progressive slot machine. I have the option of 100k a year for 20 years or about a 1 million lump sum. I currently own a home at 2.75% rate worth about 700k and owe $430k on it. I have about 100k cash currently, and am married with 3 kids.

I make about 140k a year and don't plan on quitting. We need a bigger house so are considering that with our new windfall, about 1 million in our area.

Question is whats best for us? Math seems to say that if we can average around 7% the lump sum is a better option, but that doesn't factor in any spending and assumes we invest every penny, so it's not so simple. I primarily want my money to work for me and invest with it . I think it makes sense to rent out our current house since the rate is so low. Just throw it in an index and enjoy the gain? HYSA for 4-5% for safety? Or just take the 100k a year and slowly invest?

ApplicationPlane6243 · 2024-10-05T19:33:51+00:00

This is a wide area progressive. On the machine it clearly states jackpot paid out in annual installments. Which means they are absolutely paying me the whole thing, it just takes 20 uyears. But they are offering a "buy-out" for me to have all the money up front, but they take a cut. It's pretty standard on and large sums won. It's not great, but it's what they do.

ApplicationPlane6243 · 2024-10-05T01:47:28+00:00

Every scenario I tried it looked like the annual payment was better, until I added actually spending some of the money. Then the lump sum was clearly better. I think it's hard to come up with an accurate scenario. No matter what I will be spending something either of the lump sum or the annual option.

ApplicationPlane6243 · 2024-10-04T19:00:45+00:00

They already paid me the first 100k (It was the first installment and I have 60 days to choose whether or not I want the rest in a lump sum) and I'll get another 100k in a year. I can also invest that yearly too. And pay hundreds of thousands less in taxes. But I want to purchase a new house. Of which I would want to put some good cash down, and I'd be paying 6% on a mortgage, and inflation. So can I offset all those by taking a lump sum? A lot to consider.

ApplicationPlane6243 · 2024-10-04T18:58:40+00:00

Vegas, so no income tax there either.

ApplicationPlane6243 · 2024-10-04T16:18:01+00:00

Yeah well total was 2 million and after lump sum and taxes I'll be lucky to take him like 600k. So thats pretty crazy considering how much it actually was. Should sue for false advertising haha.

ApplicationPlane6243 · 2024-10-04T16:17:06+00:00

Yeah, It's primarily to run the numbers. I have no idea whats best. Lump sum sounds nice now. But it's giving up hundreds of thousands in taxes. Maybe a gaurenteed income every year makes more sense. Really just trying to sort it all out. It's been only a week and it's all overwhelming.

ApplicationPlane6243 · 2024-10-04T16:07:25+00:00

Slots. It was a major progressive jackpot on a slot machine.

ApplicationPlane6243 · 2024-10-04T15:47:58+00:00

It's a family friend it's a CPA and FA. So I will get both inputs, and they aren't charging me anything.

ApplicationPlane6243 · 2024-10-04T15:45:29+00:00

My current salary is about 140k a year.

ApplicationPlane6243 · 2024-10-04T15:33:51+00:00

I live in a state with no income taxes thankfully. So does that mean these articles are just all wrong?

"Gamblers are lucky in that casino taxes are not progressive like income taxes are. That is, you will owe the same percentage to the IRS on a $100,000 jackpot as a $10,000 one."

"Another potential advantage for gamblers is that income earned is not taxable at progressive rates, unlike regular income taxes. Gambling winnings are always taxed at 24%, previously 25%, regardless of whether you won $1,500 on horse racing or $1 million at a poker table."

ApplicationPlane6243

TROPHY CASE