Imagine the thrill of winning the mega millions jackpot. After you’ve settled down from all the excitement, you’ll have some major decisions to make. The most important one is deciding which payout option to choose.
As a lucky winner, you’re given the option of either taking your prize in one lump sum or as an annuity spread over 29 years. With all the excitement of winning, your first thought may be to take take the lump sum. Winning such a life-changing amount of money can be overwhelming, especially if you’ve spent all your life worrying about your finances.
Taking Jackpot Winnings as a Lump Sum
Taking all the winnings in one lump sum means you pay taxes only once. The remaining funds you can do whatever you want with. Whether you want to spend it all buying property or treating all your family to luxury holidays is entirely up to you. Unless you’re very controlled with spending, even huge jackpot winnings can be frittered away.
Taking an Annuity
Taking an annuity provides you with one initial payout and the rest spread out over the next 2 decades. Both options have their advantages and disadvantages, and you’d need to weigh up the pros and cons of each. Take your time and avoid making hasty decisions.
It’s always best to get financial advice before making deciding on what to do. You’ll have so many options available that taking your time is essential.
There are plenty of ways to invest your winnings, but if investment is new to you, wrong decisions can easily be made. Banks like scotiabank offer the opportunity of long term savings accounts and guaranteed investment certificates
The amount you’ll get of course depends on the number of winners. With smaller payouts taking it all in one go may seem the better option, but even 40 million dollars can disappear very fast.