It?s easy to believe that once you?ve won the lottery, your life instantly becomes better and easier. However, this isn?t necessarily the case ? because the lottery isn?t exactly the simple payout that everyone thinks it is. In fact, the lottery isn?t one major payment, but many over a certain amount of months, dependent on the original amount. That?s not taking into account taxes involved. Many Americans are turning to selling lottery payments for lump sums; and once you consider everything involved, it?s easy to understand why.
Lottery Payments: The Difference Between Lump Sum And Annuity
One major reason why people choose selling lottery payments is that the lottery isn?t everything they envision it to be. Right from the beginning, the lottery keeps 25% for federal taxes; depending on your location and tax bracket, another 6 to 9% is added for state taxes. As for what you face with an annuity, it depends on what you win. The Mega Millions annuity, for example, gives one immediate payment followed by 29 yearly payments. Each payment grows by 5%. The Powerball annuity has a different payout schedule. It consists of 30 total payments, gradually increasing over time.
Cash For Annuity Now: Immediate Answers To Pressing Concerns
But what are the more immediate reasons for choosing a lump sum over an annuity? You?d be surprised by how many there are. While monthly payments give the total amount minus taxes over the course of years, many need or want their total amount immediately. For some, getting that lump sum not only means less worrying about taxes, but tending to immediate issues. Even if you don?t have immediate issues to take care of, you still deserve to have your money when you want it. For some, selling lottery payments is worth it simply because it lets them have immediate total control of their changed financial situation.
A Lottery Lump Sum Payout: What Will You Do With It?
Let?s answer this question: how can a lottery lump sum payout change your life? Many have taken lump sums and settled all or virtually all of their debts. In some situations, this would not be immediately possible with monthly annuity payments. Others invest their money in everything from real estate to luxury cars, hoping to make their investments back in the future. Finally ? remember, it?s your money! If you wish to go on an exotic vacation after receiving it, that?s your right.
There are little to no drawbacks to choosing a lump sum over an annuity. You can get your money when you need it, and needn?t worry about monthly payments for potentially decades to come. And most importantly, it will be in your hands.