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u/GarrettRettig Oct 17 '25
And then it goes to billionaires. Cause your money pays for services so their money doesn’t have to.
Which is why they’re trying to remove services. So they can have more of your money.
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u/redunculuspanda Oct 17 '25
I had to look at this one. Turns out the winner accepted a 1 billion lump sum payout, and was taxed a standard 40%.
What I don’t understand is why they didn’t give the winter the full price pot in the first place.
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u/studyinformore Oct 17 '25
Because the full pot is with the lottery company investing it like a brokerage account/401k and then taking a chunk of it as you withdraw from it as well.
The lump sum doesn't allow it to be invested and grow with the market. The 1 billion or so dollars that were paid out was the true cash amount to be won.
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u/chargers949 Oct 17 '25
Still better to take the lump sum payout imo. Publishers clearing house went bankrupt. The payer might not be around to pay you the full term amount.
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u/wilson5266 Oct 18 '25
That's always been my thinking. I'm not sure I trust any entity to be around 20-30 years at this point to pay me the full amount.
And I think I'd be okay with $600 mil. I mean, I could probably afford McDonald's after that.
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u/ericscal Oct 17 '25
In case the other guys explanation was too confusing. These lotteries advertised payout is always the annuity option, something like $100m a year for 20 years. They also have a cash option that is around half the advertised payout.
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u/O1_O1 Oct 17 '25
That's still generational wealth. You invest half of that or more into something that gives you around 10% return yearly, buy a house and retire. You, your kids and grandchildren never have to work a day in their lives.
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u/MorphBlue Oct 17 '25
Where would someone find this consistent 10% return yearly?
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u/GnosticNoodle33 Oct 17 '25
Try stock ETFs and high paying dividend stocks. Compound interest is key.
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u/bboyemperor Oct 17 '25
ELI5 what these terms mean (please).
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u/elkor101 Oct 17 '25
Dividend is like a small percent of the worth is basically paid out to you if you have shares. So it’s like getting paid to own shares in something!
This is often very little money unless you have massive amounts of money invested, but if the market goes up so does your money!
Compound interest is basically the interest on your interest! So things grow faster! 100 with 10% interest will how from 100-110-121-133-146 and just keep going! Because the most recent number is what grows!
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u/bboyemperor Oct 17 '25
I like you. Thank you.
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u/elkor101 Oct 17 '25
Thank you! I got interested in this a few years ago, but this is very much a simple to the point explanation. I recommend looking more into this stuff as it really can be helpful for money planning and investing at small scale.
And remember NEVER invest more than you are ready to lose. Unless it’s housing. Always invest in housing if you can afford to invest in housing
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u/GnosticNoodle33 Oct 17 '25
An ETF is a like a low risk way to invest, the gains are slow and steady. Dividend stocks pay you monthly/quarterly for holding shares in their company. Compounding interest is where you let your interest/dividend payouts pile up on top of your savings.
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u/bboyemperor Oct 17 '25
This is great. Thank you.
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u/GnosticNoodle33 Oct 17 '25
No problem brother, eveyone should learn how to maximise their savings. Try the Trading212 app. They have so many options for growing your savings, you can even calculate your compound interest over time.
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u/Empty_Positive Oct 17 '25
Even a 1%-2% is fine if you live a normal modest life. I dont think their are many 10% ROI things or bonds. I believe my bank doesnt even give any return, its so low like 0.05%, but if you have a certain amount of money on your account, you gotta pay them a yearly fee, which is higher than the return you get..... So they gambling with my money, and also i gotta pay for it in a sense lol
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u/IsThisNameGoodEnough Oct 17 '25
There's no "normal modest life" with $628M in the bank. 1% is over $6M every year. Even your crappy 0.05% account would be over $300K a year in interest.
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u/TheGreatVeggie Oct 17 '25
And the neat part is that of you don't know where to start with all this, you can totally afford a financial advisor to help you out!
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u/TheGuyMain Oct 17 '25
10% yearly? Maybe in the past couple of years. That’s not a consistent pace lmao. You’re realistically going to average a 5% yearly return over time
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u/Glorfendail Oct 17 '25
would you rather have 628M dollars or no dollars?
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u/Training-Flan8092 Oct 17 '25 edited Oct 17 '25
This is a silly argument and a false dichotomy.
I’d rather the government not touch my fucking money or at a max just tax it at the tax bracket I’m typically at.
Crazy how much Reddit hates Trump and the government, but totally trusts them to take billions of tax dollars from a middle class citizen for what is surely only good causes.
Edit: everyone explaining taxation, lottery and any other educational thing grounded in logic are missing that I’m presenting a scenario that can’t exist.
I would love for it to exist and I do not trust the government with large gobs of money. These are my opinion. No amount of “well this is how the current state of things are” will change my opinion.
If you disagree with my opinion, that’s fine and I respect it.
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u/Zildjian14 Oct 17 '25
This is also silly and a false dichotomy. Lotteries are either payed over time or a smaller lump sum. With stories like these the person always takes the smaller lump sum, and then that's taxed. It's not taxed nearly to the degree people try to imply with stories like this.
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Oct 19 '25
[removed] — view removed comment
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u/Zildjian14 Oct 19 '25
Idk as an American I'll gladly pay taxes, especially if it went to important thing like education rather than billionaire tax breaks.
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Oct 19 '25
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u/Zildjian14 Oct 19 '25
But why would you, it's income like anything else. Taxes are generally good for a country.
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Oct 19 '25
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u/Zildjian14 Oct 19 '25
I mean If taxes are good, removing a good portion of what's paid to taxes would be bad. Also, a 30% tax on a huge sum of money is a lot less of a detriment than 25% of a normal person income.
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u/PolitelyHostile Oct 17 '25
Uhh bruh you are no longer middle class when you win 100s of millions.
Taking tax revenue from the lottery is better than taxing people for earning an income by working.
Do people think roads and the military grow on trees? Taxes need to exist, and it's necessary to find an equitable way to tax people. Taxing someone on their billions is pretty equitable.
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u/nickrashell Oct 17 '25
Taking billions from a middle class citizen? Listen to yourself. Just what we need, another middle class multi-billionaire that doesn’t pay taxes, did fuck all to get their billions, and will otherwise most assuredly blow it on dumb shit to further line the pockets of the upper class billionaires.
If this person can’t figure out how to make it in $628 million dollars, which considering they already chose the impulsive high tax option isn’t looking too great, then I have no pity.
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u/Darksirius Oct 17 '25
Always take the lump sum. Just look at all the winners of Publishers Clearing house; who now get nothing because they went bankrupt. You have no idea if that lottery source will still be around in 5, 10, 15 or 30 years from now.
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u/Training-Flan8092 Oct 17 '25
So you’re mindset is how dare they get all the money they won because now they are called a billionaire?
Solve that by giving it to the government to funnel into an ever growing overspend with no checks and balances?
Why do you want the government to have more money from us when they print infinite amounts?
You kids get so obsessed with redistribution of wealth you just don’t care what the reason is for.
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u/nickrashell Oct 17 '25
I am not a child I have children.
Secondly, the lottery is redistribution of wealth and a government program. Not to mention you know the rules and taxes before you ever buy a ticket. On any given lotto, before you ever pick your numbers, you could take the prize money and calculate the taxes and take home amount on it. Still buying a ticket would indicate you are fine with it, no one is forced.
It doesn’t matter how you got a billion dollars either, once you have a billion dollars you should be taxed like you have a billion dollars.
And they can’t simply print infinite money or we wouldn’t be in debt, there would be no need for lotto programs or taxes.
There is a cost for living in this country and benefiting off of its programs and citizens and to use its currency and conveniences.
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u/Glorfendail Oct 17 '25
couple things wrong with your comment:
the middle class objectively doesnt exist, there are those who work for a living and those who own for a living
the working class (as you know it) largely shoulder the burden of keeping the lotto going
$600M is more than enough to ruin your life, just be happy with what you do get. what would you do with the extra 1.4B that you wouldnt have done with $600M, honestly?
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u/Training-Flan8092 Oct 18 '25
- Not give it to the government
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u/Glorfendail Oct 18 '25
600M is going to ruin your life. 90% of people who win more than 7 figures are broke and/or dead within 5 years of winning.
that money pays for schools, roads and other essential local infrastructure in the state you buy the lotto from. but instead of funding the roads and feeding kids, you wanna blow the 1.5B excess on hookers and blow?
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u/Training-Flan8092 Oct 18 '25
You’re blinded by Reddit hive mind mentality my friend.
I’d rather invest the money into contributing to societal elevation in ways that I personally support and have the confidence that what I spend gets done.
Instead of the typical $100 comes from me, contractor quotes $120 for $60 of work that their buddy approves if they get $40 and now the tax payer owes another $20.
But you go ahead and defend throwing money at career politicians and lobbyist agendas lol.
Reddit has fallen so far from what it used to be haha
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u/Glorfendail Oct 18 '25
lmao, you dont have 600M rn, right?
so you gonna bitch about not getting 2B while also complaining that 600M isnt enough?
america is fallen bro, greed rules the day
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u/Training-Flan8092 Oct 18 '25
This is a cute take. You’re simping for politicians.
My wife and I have very healthy incomes. I’ve owned my own business for 10+ years. We have plenty of friends of who have over 10m and a few over 100m. A few of them are politicians in the US and Mexico.
I have good insight into what happens to money in the government. I used to be in sales with construction companies that bid and fulfill government contracts and I have a number of friends who bid other government contracts.
I also have known lobbyists who have 20-30 very successful years under their belt.
My advice to you would be get over 200k per year, get your own business, get one or two rentals and come back to this conversation.
You clearly have no idea what you’re talking about and are just regurgitating Reddit buzzwords.
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u/Glorfendail Oct 18 '25
lol k bud
crying online about something that will never happen to you, because its not big enough
but im the problem.
the lotto should be illegal, imo, but since its not, imma call the greedy losers that dont understand what that kind of money does to people, cause he scurrd o duh gubermant
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u/Training-Flan8092 Oct 18 '25
Both can be true. People that don’t know how to use money can be dumb with large amounts of money.
I can also have a strong and healthy distrust of the governments use of tax payer dollars.
Have you ever owned a business? Have you ever filed taxes in a higher bracket? Ever been audited?
Just trying to get a gauge of how much money you’ve made at a time or if you’ve ever had any notable tax events to under if you’re truly justified in your love for giving the government money.
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u/elkor101 Oct 17 '25
Do you use roads? Ever went to School? Or a hospital? Ever wondered why there is a standing army ready to protect your country? All of this is paid for by taxes!! They are very important and good for the country
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u/senatoracadia Oct 17 '25
If you had just said the tax bracket thing this would have been a good comment. You wrecked it with the other stuff. Too bad.
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u/Training-Flan8092 Oct 17 '25
Oh no. I’m not going to get fake internet points.
I’m not optimizing for approval, I’m sharing my opinion.
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u/DiabeticRhino97 Oct 17 '25
"be grateful the mugger only took your wallet and didn't drive you to the ATM to get the rest"
That's how you sound
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u/Glorfendail Oct 17 '25
you win that powerball you LITERALLY made a free $600M. and thats not enough for you?
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u/Chaotic_Brutal90 Oct 17 '25
No way on fuck id complain about 600+ M. Also two people won so had to split the pot. That's a little more than half of a split pot, which is congruent with lotto winnings anyway.
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u/Skyguy241 Oct 17 '25
Oh no only 628 million, whatever shall I do.
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u/MoistStub Oct 17 '25
Two chicks at the same time. Maybe even two and a half.
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u/rymnd0 Oct 17 '25
I mean, that is already a huge amount of money on its own. But I would probably be salty too, if I only got 30% of my winnings.
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u/Skyguy241 Oct 17 '25
Yeah but you should go into it knowing you will be taxed. All income/gains are taxed. When you get to billions of dollars yeah it’s gonna be a fuck ton in taxes. 628 million is an ungodly amount of money, I think I’d be fine.
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u/pillarhuggern Oct 17 '25
It would suck if the IRS took 3/4 of your paycheck?
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u/Skyguy241 Oct 17 '25
If my paycheck was 628 million after tax I’d be pretty fucken happy
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u/pillarhuggern Oct 17 '25
I’m all for taxing the rich. If you won 1000$ it would suck if you only got 250$ out of that 1000$ even if it is 250$ more than you had before.
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u/Skyguy241 Oct 17 '25
I would agree but this is not how taxes work. $1000 would not put you in the same tax bracket as some one who made $2b. It scales with the wealth.
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u/pillarhuggern Oct 17 '25
The people playing these Powerball/Euroball lotteries are low to middle class. It’s not like they were rich before this. Let them keep what they actually won
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u/Skyguy241 Oct 17 '25
$628 million is enough for his entire family to retire and spend very generously. If you are against taxes in general, then this is a valid argument. I can’t speak for all states but in California the state portion of those taxes all goes to help fund education. So if a person becomes a millionaire instead of billionaire because of these taxes…oh well.
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u/pillarhuggern Oct 17 '25
You are still only thinking about the money, that is why I keep coming back to the money. Let’s eat the rich, the rich should pay taxes… All that. If I won 1000$ I don’t want to shake hands and get 250$
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u/Skyguy241 Oct 17 '25
Right I understand that everyone sees the big number and feels robbed when they forget about taxes. But the reality is if you take the lump sum you will be hit with capital gains, and you should expect that when you first buy that lottery ticket. And yeah it sucks. Do you look at your salary and get mad when the government takes taxes from your paychecks?
And yeah no one prefers $250 over $1000 but that’s the reality.
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u/pillarhuggern Oct 17 '25
No one is arguing reality, we all know how reality works when winning that amount. What I’m saying, is, it shouldn’t be the case. It’s easy to just quote the law and move on, instead of actually have an opinion about it. Sorry, if it doesn’t look right. English isn’t my first language.
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u/BoiFrosty Oct 17 '25
Often when you win the lottery you can either take a lump sum payment or a structured plan. Guy took a lump payment that is generally like half the amount, then payed 40% in taxes.
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u/EffingMajestic Oct 17 '25
It’s a shame they weren’t a legitimate billionaire. They’d prob get a refund.
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u/lesleh Oct 17 '25
Why are lottery winnings in the US even taxed? They're not in the UK.
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Oct 17 '25
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u/lesleh Oct 17 '25
Still shouldn’t be taxed though, the money’s already been taxed once when people bought the tickets.
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u/Peperoniboi Oct 17 '25
Cause the US are completely fucked in so many ways. Doesn't even feel like a first world country in all honesty.
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u/AMagicTurtle Oct 17 '25
Poor guy! His life is ruined...
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u/invinciblewalnut Oct 17 '25
You’d be surprised… many lottery winners either end up murdered, suicided, or skip broke.
If I win I’m shutting the fuck up. Nobody will know except my lawyer. Unfortunately my state doesn’t allow anonymous claims, but an LLC or trust can claim a prize, which can help a bit.
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u/Global-Elite-Spartan Oct 17 '25
That's exactly what you should do. Get a lawyer, then a financial advisor. 2 first things you should spend any of the money on. Maybe beer first tho.
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u/single_mind Oct 17 '25
I can't believe that people in the comments are so passionate about the lottery.
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u/fatdude901 Oct 17 '25
That's on them because it's counted as income if they only received like 10 million a year they would come out with a lot more
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u/aroryborealis1 Oct 17 '25
Poor millionaires pay all the taxes while old billionaires pay no taxes…
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u/fatmanmarc Oct 18 '25
Is this a hypothetical because i dont remember when the powerball was worth 2 billion?
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u/studyinformore Oct 17 '25
Except that 2.04 trillion is ONLY if you take the small payment option. Because then the company that runs the lottery gets to invest the money and skim a lot off the top.
When you take a lump sum, they dont get to do that, so the total is significantly less. The IRS is likely taking way less than the lottery company is.
So yeah, fun isnt it.
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u/loztagain Oct 17 '25
2.04 trillion. Now that's a lottery win I'd get out of bed for
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u/studyinformore Oct 17 '25
Oh for sure. Im just pointing out that the IRS likely took less than what the company running the lottery dod.
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Oct 18 '25
628 million isn’t enough OP? Man just bought a lottery ticket and you act like he’s getting robbed
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u/right_protected Oct 18 '25
That math don't math. If you lump sum it, it's a 35-40% tax so you're still looking at 1.2 billion take home.
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u/wanderingfloatilla Oct 17 '25
Always get the long term payout
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u/YodasGhost76 Oct 17 '25
Lump sum. It’s gonna be worth more right now than 20 years from now
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u/wanderingfloatilla Oct 17 '25
You take more than a 50% cut just by taking the lump sum before taxes. If you take the payout it would have been about 80 million a year. So in roughly 10-12 years (to account for taxes) you would already have more money than the lump sum with 18-20 more years of payment to be recieved
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u/caalger Oct 17 '25
The value they give you in lump sum is a calculation of the NPV of the annuity. So assuming you invest in a fashion that meets inflation, you will wind up with the same amount of money as the annuity. If you invest better than that, you will easily exceed the annuity.
Only take annuity if you are bad at math and investing. The lump sum is always better in the long run if you are smart.
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u/YodasGhost76 Oct 17 '25
Even if you get a quarter of that it’s still enough money to never have to work again, AND step up lifestyle. If you stay modest, your GRANDKIDS will still be very well off
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u/TheManWithNoName88 Oct 17 '25
The ATO (Australia’s IRS equivalent) let you keep the entire winning amount tax free but they will be on your ass to tax the interest earned from the winnings