Why Lottery Winners Should Choose Annuity

More US Powerball jackpot winners have failed to claim their prizes over the past five years than have chosen the annuity option. Two prizes — a $50 million prize in 2013 and a $77 million prize in 2011 — have gone unclaimed, whilst only Vinh Nguyen opted for annuity payments in September 2014. Why do so many people prefer the lump sum cash option? And why should smart lottery winners go against the crowd and choose annuity?

I need $500 million right away!

Join the ranks of the biggest Powerball winners of all timesThis seems to be the sentiment from all the Powerball winners who have chosen the lump sum option. Who really needs all those millions all at once? We here at us-powerball.com understand how compelling a huge jackpot is and the idea of having millions at your disposal is intoxicating, but that’s the whole problem. Having the whole prize amount at your disposal is a recipe for disaster. If you don’t have $100 million on your hands to buy ten yachts, then you won’t spend $100 million on ten yachts. Lottery winners have gone from wealthy to penniless in short order because of out of control spending on unnecessary and, often silly, luxury items. When you spread the money out in annual payments, then you’re guaranteed to always have money coming in instead of going out. That’s a good deal.

Annuity and anonymity are lottery winners’ best friends

How well can lottery winners keep it cool!Claiming your jackpot win anonymously is the smartest thing a lottery winner can do. Public disclosure of a huge jackpot leads to so-called friends and family members crawling out and begging for your cash. This nasty behaviour has led to heartbreak, financial ruin, and even murder for past lottery winners. Unfortunately, most US states do not allow people to claim winnings anonymously. In this case, the second best option to protect yourself against lottery vultures is to take the lottery annuity payment option. If you don’t have physical access to your entire jackpot, then people will be less likely to hound you for that money.

Annuity is still a TON of money

US powerball jackpot hasn't been below $100 million this yearPeople get so crazed by the idea of having hundreds of millions that they don’t take the time to think about how much money the annuity option actually gives them. In reality, annuity gives the winner way more money than the lump sum option. If a winner claims the lump sum, then not only are taxes withheld, but a significant portion of the jackpot amount is also deducted. If the annuity is chosen, then only taxes are deducted. How significant? The lump sum penalty is actually MORE than taxes. For example, the last winner won a $291.4 million jackpot (before taxes), but opted for cash. His payout was $191.4 million (before taxes). That’s a $100 million penalty! Sure it’s still more money than one person would reasonably need, but so is the annuity payments if you do the calculations. A $291.4 million jackpot spread over 29 years in 30 payments would give the winner $971,333 per payment before taxes. US Powerball also increases the annual payments by 5% for cost of living adjustment. This is a comfortable sum of money and almost guarantees that the lottery winner is worry-free financially for the rest of their lives.

Whichever option you prefer, the most important decision you can make is to play! If you’re located outside the US, you can always play Powerball online through a reputable lottery ticket messenger service by clicking Play Now on our site. Good luck!

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