(Topic ID: 149354)

Some numbers if you win the PowerBall Tonight


By Xerico

4 years ago



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  • 11 posts
  • 9 Pinsiders participating
  • Latest reply 4 years ago by dung
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    #1 4 years ago

    If you were wondering if you should take the lump sum or the 30 year annuity, here are some numbers for you to consider. I wrote this up for my family and friends to help explain the differences between lump sum and the 30 year annuity. All numbers were calculated by me using an Excel spreadsheet.

    If you do not want to read this wall of text, the numbers come out to be about the same after 30 years, provided that you kept an annual budget of 2M-5M a year and invested the rest.

    Some PowerBall Financial Numbers for those that live in a income-tax free state like Texas. If you live in a state that charges income tax, then the numbers will need to be adjusted, but the numbers would most likely be in the same ballpark.

    IF YOU WIN AND CHOOSE LUMP SUM ...

    Expected Lump Sum: 929,000,000
    Expected Taxes: 343,730,000 (Tax rate of 37%)
    After Tax Winnings: 585,270,000

    If you pay yourself $1.9 Million a year and keep $100K a year for pinball hobby stuff, and invest the rest and earn 5% a year on your balance, you would accumulate $1.38 Billion after taxes over 30 years.

    Over 30 years, you would earn $1.36 Billion before taxes in interest. You would pay $504 Million in taxes. This means that you would earn $858 Million in interest after taxes.

    If you pay yourself $4.9 Million a year and keep $100K a year for pinball hobby stuff, and invest the rest and earn 5% a year on your balance, you would accumulate $1.23 Billion after taxes over 30 years.

    Over 30 years, you would earn 1.27 Billion before taxes in interest. You would pay $468 Million in taxes. This means you would have earned $797 Million in interest after taxes.

    IF YOU WIN AND CHOOSE 30 YEAR ANNUITY ...

    Expected Annual Payment: 50,000,000
    Expected Annual Taxes: 18,500,000 (Tax rate of 37%)
    Annual After Tax Winnings: 31,500,000

    If you pay yourself $1.9 Million a year and keep $100K a year for pinball hobby stuff, and invest the rest and earn 5% a year on your balance, you would accumulate $1.48 Billion after taxes over 30 years.

    Over 30 years, you would earn $949.8 Million before taxes in interest. You would pay $351.4 Million in taxes. This means you would earn $598 million in interest after taxes.

    If you pay yourself $4.9 Million a year and keep $100K a year for pinball hobby stuff, and invest the rest and earn 5% a year on your balance, you would accumulate $1.33 Billion after taxes over 30 years.

    Over 30 years, you would earn $853 Million before taxes in interest. You would pay $315.7 Million in taxes. That means you would have earned $537.5 Million in interest after taxes.

    Regardless of your choice, lump sum or annuity, I think you will be okay if you manage your money well.

    Marcus

    #2 4 years ago
    Quoted from Xerico:

    I think you will be okay if you manage your money well.

    So trying to blow it all in a year isn't an option ?

    Crap.

    LTG : )™

    #3 4 years ago

    Uhhhh... when it comes to this much money, it doesn't matter what option you select or even IF you invest.
    You're stinking rich, and a complete idiot if you spend it all before you die.
    -Even if you try to re-enact Brewsters Millions.

    #4 4 years ago

    I could live comfortably on the taxes alone. Either way.

    #5 4 years ago
    Quoted from Chambahz:

    Uhhhh... when it comes to this much money, it doesn't matter what option you select or even IF you invest.
    You're stinking rich, and a complete idiot if you spend it all before you die.
    -Even if you try to re-enact Brewsters Millions.

    Yeah, you're much more likely to get murdered, sued, and all sorts of other terrible things than manage to spend it all.

    #6 4 years ago

    Need to recalculate if more than one ticket wins the grand prize.

    #7 4 years ago

    Need to recalculate if no one wins the grand prize.

    #8 4 years ago
    Quoted from LTG:

    So trying to blow it all in a year isn't an option ?
    Crap.
    LTG : )™

    Oh. I could definitely help with that game plan!

    Three words.

    Brewster's Millions Sequel

    Marcus

    #9 4 years ago

    I wonder if Robbie Knievel could blow it all in a year. You know his late dad sure could have.

    #10 4 years ago
    Quoted from Xerico:

    Brewster's Millions Sequel

    "I'm going to make you HATE money!"

    Loved that movie

    3878-2435[1]_(resized).jpg

    I'm thinking, pull a mr deeds and buy a whole city red vettes

    corp_0401_08_z+corvettes_in_movies+mr_deeds_(resized).jpg

    #11 4 years ago

    Love how people are saying if you invest the lump sum.

    If you have a head on your shoulders you could retire off 10 million in the bank without worrying about investing. That is more than many will make in their entire lifetime.

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