Lottery or lawsuit proceeds
I was thinking, in the event I was to win a lottery or a lawsuit of splitting my proceeds into 12 One Year Certificates of Deposit with staggered maturity dates in such a manner that it would be one maturity date in January; one in February; one in March; one in April; and so on until I were to form monthly income from the interest. The trouble is, I figured out that after the government and any legal fees were to step on such earnings, I would only come out with $100K for a 1 million settlement or proceeds, and/or 1 million dollars for a 10 million dollar winnings or settlement.
ARE MY NUMBERS CORRECT?
Terry Says
Your concept — “laddering” maturities of CDs is a good one — just in case you win the lottery!
But your numbers are WRONG! Even in a state like Illinois, the maximum combined Federal income tax and state income tax wouldn’t be over 50 percent. And you don’t need a lawyer to collect your lottery earnings or buy CDs.
BUT while you’re dreaming about winning a lottery, I have a better idea. Invest $400/month in a Roth IRA for the next 30 years, buying the S&P 500 stock index fund, and if history holds true, you’ll have your million dollars, TAXFREE, in time for your retirement! That’s not a long-shot likethe lottery!
