Go from playing the lottery
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Go from playing the lottery
to winning the lottery

Go from playing
the lottery to
winning the lottery

Cambridge professor discovers how he won the lottery 8 times

Home >> When You Win The Jackpot, How Will You Choose To Get Your Cash?

When You Win The Jackpot, How Will You Choose To Get Your Cash?

A big lump sum vs annuity payments for the foreseeable futureTo choose the lump sum or to choose the annuity payment, that is the question? For those lucky winners who happen to hit the jackpot, we can only imagine the joy and overwhelming exhilaration you must feel over your win. Whether you have are one of the lucky Ozlotto winners or maybe you got to win El Gordo, there will be something you will need to know about receiving your prize money. 

It is essential that you understand your options in receiving these funds because if not what you just won cloudlessly disappear overnight. Now, this is it to frighten you or to make you feel uneasy about your winning because to win the jackpot is something amazing and truly once in a lifetime opportunity. 

However, one must be wise with their earnings and must know how to manage their new found wealth better. So, here in this article, we have outlined a few pros and cons of both a lump sum payout and an annuity payment. What you decide is up to you, but it is always better to have that information for future use. 

 

So you just won the lottery

Millions of people around the world constantly ask How To Win The Lotto? And here you are or may be just having won the lottery. So what should you do how you should proceed in getting your earnings. Well, there are two different ways in which you will be able to retrieve your prize money, and they come in two form. 

The first way in which you will be able to get your prize money is a lump sum payout and the second way is annuity payment. So what exactly are these two payment methods? 

 

Lump Sum

As the name suggests you will receive the whole bulk of the prize money, taxes, of course, will be taken from the wins. So whatever the amount you received you will be able to have all of it right away. This decision is primarily made by those who are a little, can we say, impulsive. Although the thrill of having hundreds of millions of dollars is appealing, there is some ramification of having that kind of money.

More will be explained later on in the article. 

 

Annuity Payments

This payment method means that you will receive a certain amount of money for a year and it will be stretched out over the course of the next decade or few decades. This option is more for those who are less impulsive. Now each method of payment has its pros and cons, i.e., good and bad to them, which we will explore in the next section. 

 

The Pros and Cons

Like everything in life, there are good and bad to everything we do, gain or experience. Likewise, this applies equally to the lottery jackpot earnings. So what are the Pros to a lump sum win?

 

Pros for a lump Sum 

  • Money is handed to right away
  • You can invest in what you want given the huge amount that you have been given
  • The overall exhilaration you will experience
  • Total and absolute Fun

 

Pros for Annuity Payments

  • You will have years to decades of constant flow of money
  • The government will not take as much tax from you
  • You can invest WISELY in particular niches
  • Gain freedom to explore other avenues
  • If you spent a year's worth of prize money on a bad idea then next year you get the same money back. Giving you the chance to try something new again. Not too shabby

 

Cons of a Lump Sum 

  • You will have an enormous amount of money taken away because of taxes
  • You will be entering a whole new tax bracket. Very bad for those who may not be too good with finances
  • If you wasted all your money, and this is a thing, it's all gone

 

Cons of Annuity Payments

  • You will have to lay out your prize earning over a few years to decades
  • Not all that in control of your money 

 

Which is better?

lump sum payment when you win the jackpotThe answer, of course, would only be subjective. It depends on the person and their self-control and their vision. As you can see from above, there are both good and bad to both of these payment options. But it cannot be stressed enough that the best solution when it comes to receiving your prize money payout is entirely dependent upon the winner. 

However, we do recommend that if you are the impulsive type that you should probably go for the annuity payment. Not only will it teach you some things about finances but if you managed to blow all your prize money away, then you will have next year to do thing much differently. 

Coming from an objective vantage point, the annuity payment plan is probably the best option of the two. You will not have as much money taken from you in the long run, and you can still live a very much improved life with the new earnings. 

 

Final Thoughts

It is a dream come true for those who have won the lottery. However, that dream can bcome a nightmare if y]the person spends or loses all those earnings in such a short amount of time. The best option we believe is the annuity payment option. Finances are not that hard, but for those who have won a significant sum of money then it can become a very difficult issue in life. 

If you have no knowledge of handling that type of money, then it is best to play it small until you get a better grasp of handling that type of income.