Despite the fact that the economy is “improving” according to many politicians and pundits, the hard reality of today is that most Americans are struggling to remain afloat financially. With historically-low wages, massive student loans, and a convoluted economic recovery plan, Americans across the country fail to see the light at the end of the tunnel. The state of affairs are so bleak, in fact, that some Americans think that winning the lottery is the only foreseeable light at the end of the tunnel.
However, as with so many “quick fix” financial solutions, winning the lottery is not that simple. Did you know that 48% of lottery winners still have to work after winning? The reason for this varies — bad financial management, careless spending, fraud, etc. — but the most common reason is that lotteries typically do not pay the winners all at once. Contrary to popular belief, lotteries tend to spread out the winnings over a long period of time (often years). The Mega Millions lottery, for example, makes an astounding 30 annuity payments: one initial payment and 29 annual payments, each payment 5% larger than the one before it. On top of the steep taxes the federal, state, and local governments levy (up to 25% of winnings are withheld by our good friends at the Internal Revenue Service), lottery winners often find themselves flabbergasted at the lack of available money.
As a result, many lotto winners continue to work well after winning.
However, some lottery winners get out of this vicious cycle by selling their winnings and structured settlement annuity benefits to financial companies that invest the money. In return, the companies give the winnings back to their clients (after taking out a management fee) at a much faster rate than the lottery organization would. This option equates to quick, cold cash for structured settlement payments, either by accelerated structured settlement annuities or lump sum lottery payouts. Lump sum lottery payouts are popular with clients who want all their money now.
For more information about this financial option, feel free to leave a comment or question at the bottom.