Sponsored Post: Why Should You Take the Annuity instead of One-time cash?

November 4, 2019

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Sponsored Post: Why Should You Take the Annuity instead of One-time cash?



Have you ever thought, what would $1 billion actually look like? This amount seems too good to be true, particularly as a lottery prize. But a lawyer actually won a lottery of $1.5 billion in South California and decided to receive the lottery prize in the form of Annuity, which will be paid to him in a period of 30 years instead of a onetime cash of $1.5 billion.

 

Now you may be thinking why someone would do this, but this was actually the right decision, and most of the lottery winners make this blunder and end up succumbing everything.

 

Let’s suppose you won a lottery of $1 billion, what would be your first few decisiveness that you are going to make? Most presumably, your most waited for wishes that you have kept on hold for years. And for that, you have to take the one time cash.

 

But hold on, you are not going to get them all of $1 billion. Now you may be guessing that there would be some taxes, and you can solicit the remaining, but the game is going to be offbeat here too.

Let’s do some math

 

You won a lottery of $1.5 billion, and now you know what would $1 billion actually look like. If you want to take the prize as a one-time cash amount, then you will get only $930 million, and that is before taxes. But if you’re going to take all the $1.5 billion, then you have to take it in Annuity of 30 years.

What advantages do you get with Annuity?

 

  • There is a general delusion that Annuity ends when you die. Still, in the case of the lottery annuity, the actuaries call it a certain annuity, which means that they are competent to give you the annual income for the next 30 years, despite what happens to you. And if you die before that, the payments after that will become your assets and can be claimed by your heir.

 

  • If you take the whole sum at once, you have to pay the tax for two times, first for the prize, and 2nd time for the income you generate by investing it. You have to spend it somewhere, right? The question you may have before winning the lottery was, what would $1 billion actually look like? But now, when you have it, preclude change, you have to invest it somewhere at once.

 

There is another option that you can ratify to get 20% more tabulations in the next 30 years as compared to the Annuity that you will receive, and that is investing in the Government debentures.

You can also delve down on some other investment opportunities with your total sum without paying heavy taxes, but it is all up to you.

 

You also get a miraculous advantage when you ask for Annuity, and that is protection from yourself. Sounds odd? But haven’t you seen the lottery winners? They just took the whole lump sum and ended up wasting all in non-healthy investment.

 

Okay, I am not judging you, but what I know about you is that you buy lottery tickets, and you want to know what would $1 billion actually look like. And it is unambiguous that you are not good at enduring that amount of money, if you could, you would have that already. The good part of the Annuity is that, if you make wrong investment choices this year, you still have an ample check waiting for you next year, the year after that -for the next 30 years.

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