And now a PSA

[science_man_88]

Originally Posted by schickel

Authorities have warned people in the US to be on the look out for MegaMillions (sm)(tm)(r) Mania. Sufferers from this syndrome will be afflicted with grandiose dreams and yearings for the vast wealth afforded by the March 30 drawing.

(Let me know if you have a set of numbers that you think is lucky....I might play them!)

don't look now but Maryland supposedly has the only winner right now nice 640 million win.someone says 3 in the comments actually.

[firejuggler]

Asumming 1000 $ spend a day...that's still 1752 year of spending...

[bcp19]

Originally Posted by firejuggler

Asumming 1000 $ spend a day...that's still 1752 year of spending...

you're forgetting that a little over 1/2 of that is taken away as tax.

[Dubslow]

Originally Posted by bcp19

you're forgetting that a little over 1/2 of that is taken away as tax.

That's still more than a lifetime of spending. (Think of all the hardware!)

[petrw1]

Originally Posted by schickel

Well, the numbers are in for tonight; we're just waiting on the officials to figure out if any/how many winning tickets there are....

The numbers are 2, 4, 23, 38, 46, Mega 23......good luck!

[As an aside, I heard today that someone stopped at the store at Hallelujah Junction driving a Lamborghini and bought $5000 worth of tickets.....I have not seen a news report on that yet, but I guess i coudl believe it. I also heard that the wait was >3.5 hours in line down there.]

How can the Mega natch another?
Does that mean you only have to have 5 correct to win?
Or is the Mega drawn and matched separately?

[schickel]

Originally Posted by petrw1

How can the Mega natch another?
Does that mean you only have to have 5 correct to win?
Or is the Mega drawn and matched separately?

Yes, the Mega Number (tm) is drawn and has to be matched separately. The jackpot is won by matching all 5 plus the Mega, while a 5/5 match wins the second tier prize (~$233,000 this draw in California.)

The first 5 numbers are drawn from a field of 56 numbers while the Mega is drawn from a field of 46.

When California switched their big game from 6/53 to SuperLotto Plus (tm) (5/47 + 1/27), the change was touted as a way to increase the number of ways a player could win, which is true: there are more prize tiers, but the odds also worsened for the jackpot, which advantages the state by increasing the chances that a jackpot will roll a couple of times....

[schickel]

Originally Posted by bcp19

you're forgetting that a little over 1/2 of that is taken away as tax.

Do you mean the difference between the announced jackpot amount (annuitized) versus the lump sum (cash value) option?

[science_man_88]

Originally Posted by schickel

Do you mean the difference between the announced jackpot amount (annuitized) versus the lump sum (cash value) option?

where I live anything over 150,000 gets taxed at 50% between federal and provincial.

[Dubslow]

Originally Posted by schickel

Do you mean the difference between the announced jackpot amount (annuitized) versus the lump sum (cash value) option?

Look at your original thumbnail: "Estimated Cash Value: $359,400,000"

Presumably that's what you can get out of lump sum or annuity (and the former is worth even less than the 359M). The US has a pretty high tax rate, and I imagine the State of California probably has a higher tax rate than the feds. (Of course, our tax rate is relatively low compared to sm88's reported Canadian tax rate, or what I'd guess European tax rates to be.)

[bcp19]

Originally Posted by schickel

Do you mean the difference between the announced jackpot amount (annuitized) versus the lump sum (cash value) option?

11. What are the payout options?
If you are a Mega Millions jackpot winner, you will have the choice of a Cash Option or an Annual Payout. Annuity option: Provides annual payments over a 26-year period. For every $1,000,000 in the jackpot, you will receive approximately $38,500 per year before taxes. Cash option: A one-time, lump-sum payment that is equal to all the cash in the Mega Millions jackpot prize pool. Prize claim parameters vary from state to state. Contact your Mega Millions state lottery for detailed information.

Hmm, take 640M now and pay ~320M in taxes or take 24.64M a year for 26 years and pay ~12.32M taxes per year. Which would you choose? Let's say you took the lump sum, invested it at 1% per year compounded monthly and withdrew and spent $16,000 a month (yearly income tax on your earnings would of course come out of that $16,000), at the end of the 26 years, you would have spent $4,992,000 and still have a balance of over $409M. Not bad, but what if we took the money as an annuity and got paid annually. We already know we'd get ~$12.32M a year after tax. If we do the same as above and invest the 12.32M each year and then withdraw and spend $16,000 a month (paying interest income tax from the $16,000), we'd still have spent almost $5M, but we'd only have $361M in then bank. Further, the lottery would only have to invest around 564M in a 1% annuity to pay your 2.1M a month. I wonder where that other $76M goes.....

Now, I may have this backward, and there is only 359.5M cash available, which is not only misleading but means the lottery's annuity earns a whopping 4.86%, in which case, taking the cash and 180M is far worse than taking the annual annuity payments, but you'd still lose 1/2 of the annuity to taxes.

[only_human]

Originally Posted by Dubslow

Look at your original thumbnail: "Estimated Cash Value: $359,400,000"

I imagine the State of California probably has a higher tax rate than the feds.

Actually in this narrow case, Californians get a break because the state does not tax lottery winnings.

3. How Does the Lottery’s Payment System Work?
By default all MEGA Millions jackpots are paid in 26 equal annual installments. A winner is given the opportunity to choose the cash value of their jackpot prize within 60 days following your approved claim. The payment option chosen will apply to all claimants in a multiple ownership claim.

Also by default, all SuperLotto Plus jackpots are paid in 26 graduated annual installments. Similarly, a winner has the opportunity to choose the cash value of their jackpot prize within 60 days following your approved claim. The payment option chosen will apply to all claimants in a multiple ownership claim.

You may select the payment option by filling out a California Lottery Jackpot Election Payment Form. You have the option to fill out this form at the District Office when you claim your prize or you can have the form sent to you. If taken home, the form must be notarized and returned to the Lottery within 60 days from the date that your claim is approved for payment. This is normally within a day or two of the date you submit your prize claim. Group winners of a jackpot prize must all choose the same payment option, otherwise the payments default to annual payments.

If you choose the cash option, the amount you receive will be less than the announced jackpot. The Lottery only has to invest about half the amount of the advertised jackpot to make up the entire amount in 26 years, the other half is made up of interest that accrues over those 26 years. In very simplified terms, if the announced jackpot was $7 million, the Lottery would only have to invest approximately $3.7 million in the beginning to make up the other half in interest over 26 years. If the cash option is chosen, the $3.7 million the Lottery would have invested becomes the cash option amount, minus the applicable federal tax withholding. This example is based on the average market costs, as of December 2006, of 26 annual payments funded by the U.S. Treasury Zero Coupon bonds. For SuperLotto Plus jackpot prizes, you will receive an amount equal to the net proceeds of the sale of bonds purchased to fund the 26 annual payments for that prize. This will be a single lump sum payment and is estimated at 45% to 55% of the estimated jackpot amount. With MEGA Millions jackpot prizes, you will receive the cash that would have been invested to provide 26 annual payments.

If you choose the annual payment option, based on a $7 million SuperLotto Plus jackpot, you would receive a first payment of $175,000 or 2.5% of the jackpot, minus federal tax. Over the course of the next 25 years, these payments will gradually increase each year until the final payment of $357,000 or 5.1% of the prize, minus federal tax, is reached. MEGA Millions jackpot prizes, on the other hand, are paid out in 26 equal payments (in thousands) with any residual amount calculated into the first payment.
Grand prize annuity winners from Scratchers® games will receive installment payments as specified in the game profile for that particular game.

4. Who Receives the Interest Earned On This Prize Money?
The Lottery currently purchases government securities to secure the future payments of your prize. Together the principal and interest earned by these bonds over a specified time make up the full amount of the prize. In effect, each year a portion of the securities mature and make up that year’s payment.

6. What Will I Pay in Taxes?
You’ll be happy to learn that Lottery prizes are exempt from California state and local personal income taxes. However, the Internal Revenue Service (IRS) requires the California Lottery to withhold federal taxes from many prizes.