Lump sum. Also, people should know that just because the payout is $1.6 billion doesn't mean there's $1,600,000,000.00 in an account somewhere. The reason they're calling it that much is because they would invest the money over time. The only way to get that much is to opt for the 31 payments, one now and once a year for 30 years. The actual amount in an account somewhere is less than half the $1.6 billion. I would guess, though I may be off, that going for the lump sum would mean getting, after taxes, about 25% of the total, give or take a couple percent.
25% of $1.6 billion is $400 million. Every 1% off that is $16 million. So, somewhere between $368 million and $432 million, if my estimate is correct.
Can you tell I've been thinking about this?
My sister (74) lives in a retirement home in California, and she hates it. It's all she can afford, despite careful planning. She would love to move back home to the Chicago area. So if I won, I would buy a large house which either already has an elevator or has space enough to accommodate the installation thereof, and I'd move my small family (three of us) and my sister in. It would have to include a sizable kitchen. Of course, this would be after I pay off all my debts, upgrade my ride (currently a 12 year old minivan), and fix up the place where currently live. And that wouldn't happen until after I do everything I can to protect myself from identity theft and hire a lawyer, get an ironclad will for myself and my spouse, change my home phone number and my passwords to everything.
I would still have money problems. People think winning the lottery eliminates money problems but that is false. One simply exchanges current money problems for other money problems. The best way to end up with a small fortune is to start with a large fortune, so my watchword would be to try not to live like a millionaire lest I quickly run through the money. I would take a chunk of the money and establish annuities that ensure a monthly payout, and leave the rest of the money in secure, low interest investments.
There are some charitable notions going round my brain as well.
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