Is it better to take the lump sum or annuity lottery?
When you decide to purchase lottery tickets, you need to start thinking positively for the results. You should always prepare yourself to become the winner of the game. Winning a lottery is impossible as you might think. You should start preparing yourself immediately you start purchasing the tickets. This question has been troubling many lottery winners, and you might find yourself in the same position soon. As soon as you luckily buy the winning ticket in a lottery, you will usually get two options of winning when you claim it. Those two options are the cash/ lump sum and the annuities/annual payments. As the lottery rules are usually different for every state, you will need to pay attention to them. For you to make the right decision, you need to understand what those two terms mean and the positives and their negatives as well.
What is annuity?
These are annual payments given over a determined period. They can be annuity certain which means that the annuity payments are given for a given number of years or a life annuity which is the amounts provided for the winner's whole life. The state lotteries usually offer the certain annuity option.
What will happen if I take the annuity option?
Because the mentioned jackpot does not mean that you will get that amount exactly when you win, you will need to see how much the accumulated money you can get in the series of annuity payments over the agreed period. The detail calculation involves the interest rates but to think it more simply: you will get the total amount of jackpot value when you wait for the period of about 20 or 26 years depending on the agreements.
What should you consider about annuities?
You don’t need to think of how to invest the money when you take the annuities. You can ensure yourself that you will get a steady income without risking it. The tax applied will also be lower. However, you will also need to consider the possible higher rate of tax in the future. You will need to factor your age as well. If you are too old, you will need to know whether the annuities will still be given after your death or automatically stop. If you are still quite young and you quit your job after winning the jackpot, you need to consider what will happen later when the annuity payments have been given completely. Will you still have money to survive without job and annuities?
What is a lump-sum?
In case you take the lump-sum option, it means that you will usually take a certain amount of the total jackpot mentioned since you will be subjected to higher tax compared to the annuity payments option. The positive side of this option is that you can have the chance to invest it with more interest. It will result in more possibilities of getting more money than what you can get in the annuities.
So, which option is better to take?
Each option has its positive and negative sides; you will need to weigh both situations before making your decision. Our company is always good at helping you make an informed decision so that you will not regret in the future. Our financial experts will advise you accordingly as well as help you invest the winnings correctly. Just call us now at + 1-877-431-0704 for more information on your lottery payment options.
Is It Better To Take Lump Sum Or Annuity Lottery