Whether you’ve won the lottery or won a court case, the money owed to you will be in your pockets… eventually. Over 37,000 Americans receive some kind of annuity or settlement payment each year, but that money is only a fraction of the total payment. Some people can’t afford to wait 20 or 30 years for their money; what should I do if I want to sell my annuity payments lump sum?
Taxation Deprivation
Right off the bat, lottery winners are subject to pay around 25% of their winnings as a federal tax with an additional 6-9% withheld by state taxes. Suddenly, that jackpot is looking a little thin! Those who won a structured settlement in court have to pay for court costs, attorney fees, and other costs that will be deducted from their figures.
Waiting for Your Money
Now that you’ve won the lotto, you receive lottery payments each year as an annuity. This annuity starts out small but typically increases by a rate of around 5% per year depending on the type of annuity. The Mega Millions and Powerball annuities each take 30 annual payments to complete. On the legal side, what is inaccurately known as an “immediate” annuity can take up to 30 days to process before you start receiving any payment.
Get the Most Money as Soon as Possible
Making the decision to get as much of your money as you can does come with risks. Selling your annuity can cost up to 10% in surrender charges. So why would I want to sell my annuity payments lump sum? While you won’t get 100% of your winnings back, you will have the guarantee of most of in your pocket. The average structured settlement payout is around $324,000 dollars; that’s a lot of money to wait around for. Gladly, 92% of those who sold off their structured or annuity settlement are satisfied with the cash in their wallets!
