I used to think lump sum was the bum deal too. But If you look at the stats almost nobody takes the annuity.
https://www.liveabout.com/lottery-curse-victims-896653
“Jack Whittaker: “Since I Won the Lottery, There’s No Control for Greed”:
The problem with taking the annuity is that greed can still overtake you and you then sell your annuity to one of those groups that buy them. I have seen that over and over with people who get annuities as part of a medical settlement.
The original legislation which created the California lottery said that 50% of the revenue would be returned as prizes and 33% would be used to fund education. That leaves 17% for administration, promotion, and the cost of producing the games themselves. They were excluded from being able to get other operating expenses from taxpayers. The annuity option allows the lottery administrators to keep more than 17% to run their skimming off the top for extra income and bonuses.
With the annuity option, they purchase an annuity that will pay out the total dollar value over 26 years for any prize over 1000000 Dollars. When they first started the annuity “option” it was for 20 years. It will be 30 years before you know it. What they call the cash option is equal to whatever the annuity would cost. It varies with the rates at the time the annuity is purchased. If you figure what the jackpot is that is stated when you buy the ticket and what the annuity cost or cash value is, the difference between those values is collected at the time the tickets are sold.
They have enough money from selling the tickets to pay the actual value of the prize as stated. They just get to keep 40% of all the prizes over 1000000 dollars. They say it is so they can offer more prizes but that is b s. They need the money to feed their own wallets. It sucks to handle millions and millions of dollars of prize money and not get something out of it for yourself.
The original legislation which created the California lottery said that 50% of the revenue would be returned as prizes and 33% would be used to fund education. That leaves 17% for administration, promotion, and the cost of producing the games themselves. They were excluded from being able to get other operating expenses from taxpayers. The annuity option allows the lottery administrators to keep more than 17% to run their skimming off the top for extra income and bonuses.
With the annuity option, they purchase an annuity that will pay out the total dollar value over 26 years for any prize over 1000000 Dollars. When they first started the annuity “option” it was for 20 years. It will be 30 years before you know it. What they call the cash option is equal to whatever the annuity would cost. It varies with the rates at the time the annuity is purchased. If you figure what the jackpot is that is stated when you buy the ticket and what the annuity cost or cash value is, the difference between those values is collected at the time the tickets are sold.
They have enough money from selling the tickets to pay the actual value of the prize as stated. They just get to keep 40% of all the prizes over 1000000 dollars. They say it is so they can offer more prizes but that is b s. They need the money to feed their own wallets. It sucks to handle millions and millions of dollars of prize money and not get something out of it for yourself.