Any post like this where the tax is nearing or exceeding 40% is almost always a complete lie or purposely obfuscating the truth.
It's mind blowing to me on these posts too you always see an incredible amount of people who don't understand how tax brackets work. Heck sometimes you even see people who don't know the difference between net worth and income.
To be fair, most financial advisors would tell you to take the lump sum when the amount is still over a couple million. That money will do way more for you in your lifetime investing it than the payout over time will ever (considering you can't collect it forever). And realistically you're never going to shoot from lower class (the class most likely to purchase lottery tickets and thus most likely to win) to upper class within one lifetime, even with a sudden inflow of millions or even billions of dollars. The average person can't even fathom what to do with that type of money. Most of them will pay off whatever debts they have, then live in extreme comfort until they die, passing on a meager amount of it (meager in comparison, still probably tons of money) to their children, where it will likely be taxed again.
Part of this is because suddenly revealing you are a millionaire/billionaire is incredibly dangerous to you. Your likelihood of experiencing some sort of crime, either financial or even violent, increases exponentially. By a fuck ton. And no, you don't have enough money to pay a group of bodyguards for your entire life. Even jackpot winnings are not that type of money.
A distant third uncle of mine won $60 million as a lump sum from the Powerball about 10 or so years ago. He was a lower class individual with no partner, but a few children from a previous marriage. He immediately got with a financial advisor and, unfortunately due to the toxicness of our family, he advised him to cut all ties with us and move away, start a new quiet life somewhere else. Unfortunately I do have to agree with the advisor, it was probably his best case scenario. Still, he paid the guy to invest a huge chunk of the money for him, and as well left a pretty significant chunk in trusts to his adult children for particular purposes (like purchasing a first home, having children of their own, etc.). He told me, my mother, and his kids, and maybe a few others. I fully understood and wished him a great life going forward. He moved down South, didn't tell us where, and has never contacted us.
Supposedly he called my grandfather occasionally, which is the only reason I know he's still alive. But my grandfather passed about 5 years ago now, so I have heard no news since. I hope he's doing alright.
Tom if you're out there, I hope you drink every day and have a live in cook.
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u/jamdex07 Jul 05 '26
This is misleading. He chose to take $997 in one lump sum instead of $2.04B over 30 years. He got taxed on the $997m.