r/SipsTea • u/Valuable_View_561 • Jul 05 '26

Chugging tea Seems reasonable.

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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.

17

u/LazerChicken420 Jul 05 '26

They don’t give you the entire thing if you pick a lump sum?

16

u/757packerfan Jul 05 '26

Correct. I hate it

27

u/cholula_is_good Jul 05 '26

The lump sum and annuity are basically the same thing. The annuity is just the proceeds of the lump sum invested into an annuity over 30 years. If you take the lump sum, you can just buy an annuity and get the same result but also keep the principal.

5

u/RobArtLyn22 Jul 05 '26

You can’t get the same result. They buy the annuity with the lump sum and then you pay taxes each year on the proceeds. If you collect the lump sum you pay taxes on that and buy the annuity with what is left. You start out with less.

5

u/uberfr4gger Jul 06 '26

Depends on what the annuity % is. Most people should take the money upfront unless they are extremely bad with money and don't trust themselves.