You ever won a lottery before? If so, you’ve certainly heard about the Lump Sum vs Annuity payment options. That’s right, you can choose to between the two different options for claiming your prize. Within this article, we look at the pros and cons for each type.
Lump Sum vs Annuity Payment
Let’s say that you’ve used our jackpot winning tips and tricks and actually claimed a lottery jackpot. Well, after coming down to reality, you’ve got 60 days to make a decision of whether you’d like to get the lump sum or the annual payment.
Lump Sum Payment
Both payment methods have got their own ups and downs. For instance, you’ll need to pay taxes on both forms. In the long run, you’ll be making a little less than the jackpot amount should you opt for the lump sum.
The benefit of having the lump sum is that you avoid unnecessary tax obligations to pay in the future. You just collect the cash all in one go and you’re on your own.
The lump sum will ensure that you collect your winnings in one go and can choose how to spend it. We would recommend you think very hard before blowing all the cash. After all, many lump sum players end up bankrupt after a year or so.
If you opt for the annual payment system, you’ll be able to claim the cash over the course of the next 29 years. The yearly payments have got tax strings attached to them each and every year, but the amount also increases by 5% every year.
Moreover, if you do opt for the annuity instalments, you’ll not have to live in fear. So long as you’re playing at a popular lotto site, such as Powerball or EuroMillions, you can rest assured that you’ll be paid over the next 30 years for sure.
There’s a massive number of players who’ve won the jackpot and actually gone no to become bankrupt. Well, if you opt for the annual payments, you’ll certainly avoid going down that nasty route.
To conclude this article on choosing a jackpot payment of Lump Sum vs Annuity, you’re best off going with what you feel is right. We would recommend you speak to the professionals and get a better idea of what you’d like to invest in and why you’d rather take a lump sum over the annual payment or vice-versa.