Skip to comments.Retirement and Health Care Lottery - Cash Option or payments over 20 years? (Vanity)
Posted on 10/09/2008 9:14:54 AM PDT by hocndoc
When you buy a Lottery ticket, do you buy the "Cash Option" or go for the 20 equal payments from the Lottery over 20 years?
At first, I called this my Conservative test. But then I realized that true conservatives probably wouldn't buy a lottery ticket. Now I call it the self-reliance versus government test.
The question is a good one to use to help undecided voters and men and women that you believe would vote Republican if they thought the issues through. Compare the payout on Lottery winnings with Social Security, Medicare, and government health insurance.
It's amazing and encouraging to hear the reasons that people give for one or the other. I was surprised how many people understand how the State Lottery payment system works. It's obvious that most people have considered the following questions:
1. Will the money be there when you need it or will the government spend it somewhere else?
2. What happens to those guaranteed payments if you die?
3. Do you believe that you could do better with half the money in a lump sum, now?
4. Or, do you think you would just blow it and so you need someone else to manage it?
People who answer #4 are rare. Those are the ones who can't understand why I object to socialized medicine. They never "get it" when I tell them that my husband could do better than the government with the 15% of our income that goes to Social Security.
Even some of the people who answer #1, #2 or #3 need that 15% number explained.
It's certainly easier to explain than the Alternative Minimum Tax.
A vanity. It’s slightly better than posting my latest blog post
Or pictures of Comal County Republican women:
Shameless self-serving bump.
Of course I would take the lump sum payout.
But, I don’t know what I would do with it.
There is nothing to trust anymore.
But, the government will probably still be
printing money twenty years from now.
Oh my ! What a wonderful problem that would be.
For instance if the prize was $1,000,000 over 20 years, the yearly payout would be $50,000 which is subject to a much lower tax rate than the ~$500,000 one time payout is subject to.
Also the state, if it has an income tax, would get less taxes over a long period of time.
Even with taxes, I believe that my husband will/could do better than the State or some State commission. I have more hope of enjoying the money and what it would buy taking half the money in a lump sum.
“What a wonderful problem that would be.”
I call it my “fantasy tax.” I buy a dollar’s worth every so often and imagine what I’d do with the money if I won. Then, I check to see whether my fantasy is what I’m working toward - albeit on a smaller scale.
If I can’t say I’m working toward my dream, I need to rethink what I’m doing.
These days, I want my own radio station or newspaper. I’m going to have to win, big, huh? (Or figure out how to write for the above.)
I regard it as a well spent dollars worth of entertainment.
Take the money and run or buy & invest. Smart folks are looking to buy low now. Dollar cost average into mutual funds with low annual fees if you don’t have a specific company to invest in. Maybe some gold or silver, they’re printing money like crazy. Inflation might be bad.
I’ve told my husband I want silver dimes - these sound like really money to me.