Why Many Lottery Winners Are Selling Their Annuities
There are only a few specific moments in your life in which you might gain access to a large amount of money at once. While you may have time to prepare for a large inheritance, you’ll probably be more surprised when you become the recipient of settlement money; and chances are that you’ll be positively shocked should you win the lottery. However, these kinds of occurrences happen more than you’d think. Should you end up with lottery or settlement payments, it may be difficult to figure out what to do next. As much as we’d like to fantasize about winning money through a lottery or even a settlement, the fact is that these payments don’t usually work out the way we imagine. You don’t automatically get a lump sum of cash. With that being said, there are ways that you can get that lump sum of cash. This is especially important at certain points of your life — we all have moments in life when we need money right in that moment, rather than waiting for money to pay out. You deserve to have your money when you want it, or at least have options. Let’s look into what those options are, and how this system works in the first place.
Lottery And Settlement Payments: How They Work
The fact is that often, when you “win” a lot of money at once, that money is not disbursed at once. Rather, the money is disbursed in structured payments — hence the term structured settlement. Many people find themselves with structured settlements. Rarely will you automatically get cash now from settlements, especially if those settlements involve a large amount of money. Indeed, the average structured settlement is $324,000. But it’s not as if this money is going to come with no strings attached, and the same issue goes for lottery payments. For example, if you win the Mega Millions lottery jackpot, you’ll receive your money through one immediate payment followed by 29 annual payments. Though each annual payment is 5% bigger than the last, it’s not as if you’re getting your money all at once. Similarly, the Powerball annuity consists of 30 annual payments that increase over time. In addition to all of these initial roadblocks, 25% of your lottery winnings are automatically withheld for federal tax. Depending on where you live and your tax bracket, you’ll have another six to 9% withheld for state taxes. That is a lot of money lost automatically, and then you have to wait years for the rest. This is why many people are choosing to get cash now from settlements and lottery winnings. This done through selling your annuity. Below, we’ll discuss the many reasons why you would choose this option.
Why You Should Get Cash Now From Settlements And Lottery Payouts
There are many reasons why people choose to get cash now from settlements and lottery payouts rather than waiting for their money to be paid out over the course of years. For one thing, this simply makes life a lot easier. People can easily get overwhelmed by the idea of waiting for their money for — potentially — decades. These payouts can also complicate tax issues, meaning that ultimately you’re losing money as you gain. People rightfully want control over their finances, and it can be difficult to feel as if you have control when your money is essentially being held from you. Another reason why people choose lump sums over payments is that often, they have debt to worry about. It is easier to pay off your debt quickly and efficiently if you have a lump sum. Any money left over after you pay off your debt can be invested or saved. Some people also find themselves in an immediate need of money due to things like medical emergencies. No matter why you need your money, you deserve to have access whenever you want, to however much you want. In many cases, the best way to do this is through selling your annuity.