Do you ever wonder what happens to the people that win the lottery? I’m sure lots of us imagine that they are somewhere far away living the dream life on a beach or mountain top somewhere beautiful. Unfortunately this typically isn’t the case. In fact, 48% of lottery winners still have to work after winning the lottery. A big reason for this is the way that the winnings are paid. People who win the lottery are paid through a process called lottery annuity which, put simply, means that they are paid a certain small amount each year for several years or even decades. To put this in perspective, at the end of 2013, there were nearly 35 million individual deferred annuity contracts in place.As you can probably tell, that isn’t quite as great as getting a lump sum check for your lottery winnings. The good news is that you can actually get cash for annuity payments! Here are some benefits of choosing a lump sum versus annuity payments:
1. Get rid of debt immediately – With a lottery annuity payment system you will only get a little payout each month for several years or decades. In some cases the amount could be so small that it wouldn’t even be comparable to one of your paychecks. In some cases, with variable annuities, you may even be subject to maintenance fees of $20 to $30 per year. If you choose to sell your lottery annuity it would be as if you received a lump sum lottery payout. With this option you would be able to immediately use those funds to improve your life. For many this includes paying off their largest debts like their home, auto, and student loans.
2. Start your new life right away – 92% percent of lottery winners who sell their structured settlement are glad that they made that decision. This is partly because it relieves quite a bit of initial stress and they were able to move on with their life in whatever way they choose. Some winners choose to use the money to vacation for a few months before settling back into real life and figuring out the best way to spend or invest their new found winnings. Others are quick to meet with financial planners and other financial officers to make sure they can make the most of their lucky winnings.
3. Avoid the waiting – Can you imagine winning the lottery only to be told that you have to wait 10 years to really see all of the money? That sounds ludicrous, but it’s happening to lottery winners every day. One of the country’s most popular lottery game, The Mega Millions, has a lottery annuity system that is paid out as one immediate payment followed by 29 annual payments with each payment being 5% larger than the previous one. Don’t spend the next few years of your life waiting on your lottery check every month. Sell your structured settlements and begin reaping the benefits of being a lottery winner immediately!
If you won the lottery and don’t want to wait years to see the money come in consider the option of selling your annuity. You can get rid of debt immediately, start your new life right away, and avoid waiting for years and years to get your money. You won’t regret it!
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