In 25 years, who knows? Financial pros also point out that with a smart investment strategy, you could make more money off the lump sum than the eventual full payout of $202 million. Pros: Taxes favor taking the lump sum because rates are so low right now. In the case of the $202 million jackpot, the winner could take $142.2 million in cash.
LUMP SUM: Winners can accept a one-time cash payout. “The estate would have to pay the estate taxes, even though the installments haven't arrived,” he said. If you pass away before all installments are paid, your estate with undistributed installments would be taxed at 40% of anything above $11.58 million if you're single, or $23.16 million if you're married. There is also the issue of estate taxes, says Leon LaBrecque, chief growth officer of Sequoia Financial Group. Tax rates, which currently are the lowest in decades for the top tax brackets, also could increase over the next 30 years, and more of your winnings then would go to Uncle Sam rather than into your pocket. You also could die before enjoying all your winnings.
It’s possible that the entity making the payout over the 30 years could run out of money.
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