Lottery Jackpot Winners – Annuity Or Lump Sum?

Lottery jackpot

A single ticket sold in California has won the second-largest prize ever won in a U.S. lottery, worth $774.1 million before taxes. The winning ticket was purchased at Midway Market & Liquor in the rural town of Frazier Park, north of Los Angeles. The winner has the option to take a lump sum or an annuity, which would pay out the prize in 29 annual payments over 30 years.

The choice is a significant one, because annuity winners come closer to earning the advertised jackpots than those who choose a cash payout. That’s because the money is taxed differently depending on how you decide to take it. In the United States, most winners prefer a lump-sum payout because they want to control their money.

Whether you choose annuity or cash, it’s important to consider your ability to manage hundreds of millions of dollars. If you don’t think you can, it might be better to pass on the jackpot and try another time.

But even if you’re confident that you can handle it, it might be wise to discuss it with a financial adviser before making the decision. A financial professional can help you understand the impact of different payout options and make recommendations based on your personal situation. This is especially true if you’re considering investing your winnings. You can find a qualified financial adviser through the American Financial Association’s Find a Pro tool. You can also look for someone who specializes in helping lottery winners and their families.