What Is a Lottery Annuity?
If you’re one of the lucky few who has won the lottery, one of the most important decisions you can make is how to receive your winnings. A lottery annuity is one of two payout options lottery winners receive.
A lump sum payment is the second payout option. While a lump sum provides the most flexibility and immediate access to winnings, receiving a large amount of money all at once can cause poor financial decisions and bad investment opportunities. For this reason, many winners choose long-term lottery annuities that provide a consistent stream of income and limited access to large increments of cash.
Lottery annuities contracts can be highly customizable to suit the winner’s needs. For example, if you wanted to access some of your money now while simultaneously investing the remainder, you can purchase an immediate variable annuity with your winnings. Contracts can customize the amount you receive in each disbursement and how frequently disbursements occur.