31 Jul Lottery Payments: Hey, You Never Know…When You Will Get Paid
Won the lottery? Congratulations!
Sorry to say, though, but even today may not be your lucky day.
Why? Because 48% of lottery winners work even after winning. This may seem unbelievable, but it’s true. Sadly, winning the lottery isn’t all that it’s cracked up to be. This is, in part, due to how Americans spend and budget their winnings. Lump sum lottery payouts are just one option, and an option that many advise against most of the time. The other option is what’s known as a structured annuity. When winners choose the annuity option, the Mega Millions jackpot, for example, makes one initial payment followed by 29 annual payments with each payment 5% larger than the one before it. And to top that off, the government often withholds close to a quarter of your lottery payment!
So, given that most payments are allocated over long periods of time, many lottery winners still have to work for the time being before being financially secure enough to retire. It’s a lofty goal to retire in the Bahamas before you’re 50 — but even if you win the lottery it’s still pretty hard!
Fortunately, there are ways to get around the rather stringent timetable for lottery payments. Selling lottery payments is a unique option for people who want their money now — or at least very close to it. For a nominal fee, lottery winners can sell their payments to a financial company which uses the money for investment. In turn, the company pays out the lottery winnings immediately or on a more favorable timetable. With an immediate annuity, for example, you can receive lottery payments as soon as 30 days. With a structured settlement annuity, on the other hand, you can get paid every year, two years, or however you want to arrange it.
For more information about these kinds of payments, feel free to leave a comment or question at the bottom.