You have just Won the lottery, Now what?
Congratulation on winning the lottery. How much did you win?
Suppose you have just won $ 1.6 billion . Now you have to decide payout. Which option are you going to take.
There are 2 options to take . One is Annuity and the other is Lumpsum. Both has their pros and cons
The positive side of the Lumpsum option is that you get your winnings all at once and are not at the whim of the state’s financial future. Because the state can go bankrupt any time and won’t make the pay out during those times. You will be just an creditor that time.
The positive of Annuity is historically people blow up cashes. You at least have 30 years to get paid.
If you decide to take annuity , you will receive around $50 Million every year for 30 years. If you take lumpsum. it will be a one time payment of around $775 Million
You also have to pay uncle Sam . There is a 24% tax you need to pay to IRS immediately. The story doesn’t end here , you also have to pay an additional 13% while you file your taxes. So that makes your payout for annuity to be around $35 Million. If you take lumpsum , you will get a payout of $490 Million.
Now time for more donation because you are lucky. You also need to pay your state. The state tax also works in the similar…
