Want to Win the Lottery? 3 Hard Truths About the Great Game and Its Payout
The big win can be very, very exciting; what are the chances, after all? Before you get excited, though, there are a few things you should hear:
1. The Taxes
Right off the bat, 25% of lottery winnings are withheld for federal taxes, and up to 9% are withheld for state taxes. There’s no escaping taxes on your winnings, but luckily you’ll still have tons to spare.
2. Varied Payouts
Different types of lotteries have different payout structures. For example, the Mega Millions annuity is usually paid out as one immediate followed by 29 annual payments — with each payment increasing five percent more than the subsequent one. The Powerball lottery annuity also consist of 30 annual payments that increase over time. However, most lotteries will allow you to customize the payout period to your needs.
3. Now what? What to do when you win the lottery
If you’ve won the lottery, you have options. You can choose to receive the winnings over many years, which can be good for people who lack restraint in spending. But for those of you who have grand ideas about how to spend those millions, you can also sell your lotto win for a lump sum, which offers you all the freedom you’ve always imagined to buy luxury cars, homes, or investing in your future by going to college. If at any point during the traditional payout period you want to sell your lotto win for a lump sum (whether it be to buy property, start a business, or take a dream vacation), there are many companies that specialize in buying structured settlements, allowing you to get cash for your settlement.
Before you let it go to your head, take careful stock of your options when you win the lottery. Whether or not you decide to take the the structured payments or lump sum when you win the lottery, there is no doubt that with careful planning and consideration, you can have anything you’ve ever dreamed of.