Having the good fortune to win the jackpot will leave you with the enviable decision of either taking it as a lump sum, or an annuity spread out over 29 years.
In these situations, you need plenty of breathing space to take stock of everything. No decisions should ever be made immediately after such a life-changing event. Choosing a lump sum may be in your best interests, but you’d need to get plenty of financial advice first.
Having got the winning Mega Millions Numbers your first reaction may be to broadcast your good fortune to all your friends and colleagues. This is a really bad idea, though, as once word gets out, it can spread fast!
Advantages of a Lump Sum
The main advantage of a lump sum is it gives you so many more options. You get the freedom to invest money wherever you want. Also, taxes are paid all in one go which is a huge advantage.
Providing you make sound investment choices you could potentially earn far more money. You may feel happier with a lump sum if you foresee situations where you’d need access to large amounts of cash.
Disadvantages of a Lump Sum
The sheer size of a Mega Millions jackpot can be unthinkable to many lottery winners. One minute they’re working in Walmart on a minimum wage and the next, find themselves with 40 million dollars in the bank. Family and friends not seen for years suddenly appear at their door!
Begging letters arrive daily from complete strangers. In this situation, a kind-hearted winner could soon find their millions dwindling away. This is why keeping quiet about it for a while is so important. If you’re new to the world of investing, you could be an easy target for scams. This is why financial advice is crucial to your success. However, despite that, a jackpot lump sum is probably your best option.