{"id":40405,"date":"2023-01-26T12:40:07","date_gmt":"2023-01-26T12:40:07","guid":{"rendered":"https:\/\/www.bonusfinder.com\/?page_id=40405"},"modified":"2024-07-04T06:09:48","modified_gmt":"2024-07-04T06:09:48","slug":"lottery","status":"publish","type":"page","link":"https:\/\/www.bonusfinder.com\/guide\/lottery","title":{"rendered":"Lottery Guide"},"content":{"rendered":"

US Lottery Winners: Should You Take the Lump Sum or the Annuity?<\/h2>\n

We have all dreamed of winning the lottery. But what if you win tomorrow? Should that happen, you will be offered a choice: a lump-sum payment or a 30-year annuity. In todays article, we will clear up the confusion around these payment options. The odds were impossibly long, but you did it \u2013 you won the lottery. But no matter which draw (Powerball, Mega Millions, or your state lottery) you took down, a fateful choice awaits. Do you take the lump sum payment… or the annuity? Most winners don not know what these terms mean, let alone their implications. But by learning about them now, you will make a more informed choice when you win.<\/p>\n

What are Lump Sum Payments?<\/h3>\n

When you opt for a lump sum payment, you get ALL the money upfront. Unsurprisingly, it’s the option that most lottery winners choose, but it has drawbacks.<\/p>\n

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You get ALL your prize money (after taxes):<\/strong> You get most of your money upfront when you accept a lump sum. By doing this, your cash is sheltered from circumstances outside your control. Also, in the latter stages of life, getting immediate access to funds is preferable, as you cannot enjoy your money when you are dead.<\/div>\n<\/p>\n<\/div>\n
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You could earn MORE than your original prize:<\/strong> After receiving your lump sum, you don not have to put it into a checking account. In fact, many financial advisors recommend storing your lottery capital in a fixed-income fund. But if you are bold, you could stick some into growth-oriented investments. Over time, the gains could overcome tax losses and exceed the lifetime payout of a lottery annuity.<\/div>\n<\/p>\n<\/div>\n
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The tax hit upfront will be significant:<\/strong> In September 2014, Vinh Nguyen won the Powerball, taking down a jackpot of $228 million. However, Vinh calls California home, a state notorious for its high taxes. His prize would have taken a 41% haircut if he had taken the lump sum, leaving him with just $134 million. Vinh opted for the annuity. Because of that choice, he'll receive the full $228 million over 30 annual payments.<\/div>\n<\/p>\n<\/div>\n
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You could spend\/lose it all:<\/strong> Some winners lack impulse control. Between unsustainable spending and bad investments, many end up broke within a few short years. Adding more money does not curb spending habits - it makes them worse. So if you have these tendencies, taking an annuity may be the better option.<\/div>\n<\/p>\n<\/div>\n

Also read our gambling tax guide<\/a> for more details. <\/p>\n

What is an Annuity?<\/h2>\n

But what happens if you opt for the annuity? Choose this option, and you’ll get your prize in annual installments. Now, this period varies by lottery, but Powerball and Mega Millions follow the 30-year model: you get your first installment upfront, then once per year for the next 29 years.<\/p>\n

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You are set for the next 30 years:<\/strong> Imagine getting a job with a multi-million dollar salary. Now, subtract 100% of the work. That is what it is like having an annuity. Sure, it is not as sexy as having nine figures in your bank account, but being constrained by an allowance curbs the worst excesses of new lottery winners. If you have a nasty spending habit but crave security, an annuity may be the best choice.<\/div>\n<\/p>\n<\/div>\n
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Leave behind a legacy:<\/strong> But what if you die before collecting your full annuity? Despite what some think, annuities are NOT transferred back to the government upon death. Instead, they become part of your estate. If you want your spouse and kids to be okay after your passing, an annuity can make that happen.<\/div>\n<\/p>\n<\/div>\n
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You give up control over your money:<\/strong> Who knows what the future holds? A decade from now, the Feds might raise taxes significantly. Inflation might escalate, eroding the value of your annuity. And what if the government goes bankrupt? If you won a state lottery, they might be tempted to 'suspend' future lottery payments. With an annuity, you are just a helpless bystander. You can't shelter your cash through legal tax avoidance structures, nor can you invest it in inflation hedges. And at any time, a government can turn off your income.<\/div>\n<\/p>\n<\/div>\n
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Initial payouts are small:<\/strong> Think that an annuity is divided into 30 equal installments? Think again - in most cases, the payouts start small and increase in size by five percent each year. Lotteries backload their annuities in an attempt to combat inflation, but this measure makes less sense if you're an older adult. In short, inflation protection doesn't matter if you might not be alive to enjoy your money. So if you're 40+, you're probably better off taking the lump sum, investing it in an income fund (or some other stable investment), and living off the interest.<\/div>\n<\/p>\n<\/div>\n

Make the Most of Your Lottery Windfall<\/h2>\n

Many financial advisors recommend taking the lump sum. But it’s not “one-size-fits-all” advice \u2013 after all, some people like the security of an annuity payment, nor are they comfortable investing multi-millions. So when you hit the “big one,” we hope this article will make your decision easier.<\/p>\n

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So You Just Won the Lottery: What Now?<\/h3>\n

You never think it’ll happen to you – but it happens to people around the world, every single day. What you would do if you won the lottery? In this blog post, we’ll share our most important tips for lottery winners.<\/p>\n

It’s a morning like any other. You wake up, take a shower, get dressed, and turn on your coffeemaker. Then, as your dark roast percolates, you bring up the numbers from last night’s lottery draw. But unlike countless times before, the unthinkable happens. After comparing the draw numbers with yours several times, it hits you \u2013 they match. A rush of blood flows to your head, and you begin to feel dizzy. You think, ‘What in the world is happening? What do I do now?’<\/p>\n

First of all, if you’re standing, sit down. Then breathe \u2013 your brain needs oxygen to process what just happened… and, more importantly, what you need to do next.<\/p>\n

What to Do After a Big Win<\/h2>\n

There are several things you should ALWAYS do after a big win. Unfortunately, some winners fail to do them and end up in a sticky situation later.<\/p>\n

So what are they? Let’s run through them, step-by-step:<\/p>\n

Sign the back of your ticket<\/h3>\n

Fact: a lottery ticket isn’t legally your property unless you’ve signed it. So if you misplace your ticket and someone else finds it, they could claim YOUR prize \u2013 and you would have no legal recourse. <\/p>\n

So if you didn’t sign your ticket (and let’s be real, few people do), flip it over and slap your signature on it… RIGHT NOW. Then, to protect yourself from accidental loss, make digital copies of your ticket and store them away from prying eyes.<\/p>\n

Remain anonymous<\/h3>\n

You might think most people would be happy for your good fortune. Wrong \u2013 on the surface, they’re all smiles. But underneath, envy may be pushing them to sponge as much wealth off you as possible.<\/p>\n

Put your name out there, and people will come to you with every sob story under the sun. Many will be exaggerated \u2013 a few will be outright fabrications.
\nOnly a handful of people need to know about your win \u2013 your partner, your immediate family, close friends… and that’s it. To everyone else, you should be another random person on the street.<\/p>\n

Get an accountant and a lawyer<\/h3>\n

For years, you managed thousands of dollars. Now, you suddenly have to manage millions. It’s not easy, so don’t try to do it alone.<\/p>\n

So start by hiring an accountant with experience managing high net worth accounts. They’ll start by assessing whether you should take the lump sum or go with an annuity. Then, they’ll advise you on taxes, succession planning, and day-to-day financial management. <\/p>\n

Also, even if you take our advice in point #2, some people\/entities may still try to get their hands on your money. By retaining the services of a lawyer, you’ll gain protection from these vultures.<\/p>\n

What to Do After Collecting Your Winnings<\/h2>\n

But these tips are just the essentials. After posing with your novelty check, partying with family and friends, and taking time off, consider these additional pointers:<\/p>\n

Pay off your debt<\/h3>\n

For years, you struggled. Now you have more money than you know what to do with. So have fun making your debt obligations vanish with a single mouse click. Goodbye, student loan! Goodbye, mortgage!<\/p>\n

Set up a passive income system<\/h3>\n

True financial independence isn’t won by amassing millions of dollars \u2013 it’s won by spending less than your passive income streams. <\/p>\n

Think about it: many lottery winners go broke in a few years by blowing through their principal. But if you get your accountant to set up an income fund that pays you regularly, AND you build your lifestyle around it, you’ll never worry about money again.<\/p>\n

Live your life<\/h3>\n

You no longer have to work for money \u2013 hurray! But, don’t spend all your time on the couch \u2013 get out there and explore your passions. Travel. Learn a skill you never had time for before. Find a charity to support. <\/p>\n

Your new life starts now \u2013 so make it a good one.<\/p>\n

Recent Results for Top US Lotteries<\/h2>\n

The Powerball and Mega Millions offer some of the biggest lottery wins in the US. In this guide, we’ll break down the most recent wins in these draws.<\/p>\n

Want to take a shot at multi-millions? US lotteries like Powerball and Mega Millions routinely offer eight and even nine-figure prizes. On this page, we’ll share recent results for these draws. Who knows \u2013 soon, you might be the newest addition to this list!<\/p>\n

Powerball<\/h3>\n

The Powerball is a multi-state lottery that has crowned new millionaires since 1992. But how does it work? Players pick five numbers from 1 to 69, plus a Powerball number from 1 to 26. To win, you must match all five drawn numbers in sequence, plus the Powerball.<\/p>\n

Currently, the Powerball lottery has draws every Monday, Wednesday, and Saturday at 10:59 pm Eastern Time. Below, we’ve listed the ten most recent wins:<\/p>\n