Another economic hard-luck story as a struggling family tries to get by:
Last week Ohioan David Coterel, 65, came forward to collect the $300 million he'd won in a Powerball lottery jackpot in Indiana. So why are Coterel and his co-winners - son, David Jr., and daughter, Lynn Hiles - walking away with only $145.9 million, before taxes? Because they had to choose either cash or yearly annuity for their winnings at the time of the ticket purchase - and they chose the full cash option.
That's something to think about next time you lay down money for a lottery ticket.
"Many people don't understand that if they opt for taking all the cash at once [as opposed to a yearly annuity], they are likely to lose half," said Chuck Strutt, executive director of the Multi-State Lottery Association, a non-profit organization overseeing lottery departments in 29 states, Washington, D.C. and the U.S. Virgin Islands.
So the winner was expecting $300 million but will get less than half that, and taxes will be taken out of that. These poor people will be lucky to get out of this with millions in the double digits. Can a trip to the payday-loan place be far behind?
Comments
Wow, Mr Strutt really needs to buy a clue about present value. These folks have *not* lost half their money, it's likely they'll come out ahead.
You see, they can invest the money they have now and use it to make more money. And if they're half way bright about it, they can make more then they would have otherwise.