How Much Will You Actually Take Home If You Win The Mega Millions?
Look at all those zeroes. It's more money that I can really comprehend, more money than I could spend in life time. I could donate a million dollars to my favorite charity every year for nearly a millennium. Or I could just buy an island as far away from the rest of humanity as I could and live happily ever after.
Whenever you talk about a big jackpot, the discussion always comes to taxing, and whether you should take the annuity or the lump sum.
Lifehacker calculated the taxes that residents of different states would have to pay (California, Delaware, Florida, New Hampshire, Tennesee, and Wyoming have NO TAX on lottery winnings) and here's what you're looking at as a New Jerseyianite.
- NJ has a state tax of 8%
- Take the Annuity: - $2,586,667 per year (avg. net pay per year: $21,986,666; after 30 payments: $659,599,980)
- Take the Lump sum: - $43,888,000 (net payout: $373,048,000)
The number is dramatically different when you see it like that...but honestly, I think I'm going for the lump sum. I've read way too many articles that endorse each option, but the main thing that sticks with me is the potential for the government to say "hey, we're out of money so we have to put a stop to annuity payments, sorry!" and then you're screwed. Take the $45mil, retire now, invest in real estate, live off the interest. If I don't show up to work Monday, you'll know that's what happened.
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