If you’ve won the lottery and you chose to receive your lottery winnings through an annuity settlement, you’re probably regretting that decision like most people do. A lottery annuity can be a great way to control finances for some people, but for the majority of people, it just gets frustrating and annoying not to have complete control over the money they’ve won.
So why exactly should you think about selling your annuity to a service that purchases lottery annuity payments? Here are a few reasons:
- A lottery annuity isn’t taxed as much as a lump sum lottery payout, but make no mistake, there are still plenty of taxes and fees. And when you don’t even have the ability to choose how much money to spend and when you want to spend it, the extra taxes actually seem like they might be worth it.
- Speaking of not being able to spend your money, that’s pretty much the biggest problem with nearly any annuity settlement, including lottery annuity payments. Maybe you’ve decided that you want to go back to school, or you want to open a business, or you just need to pay down your credit card debt. Whatever you want to do with your money, you should have the ability to do it.
- Because annuities are paid out over an extended period of time, there are a couple drawbacks that might be frustrating even if you don’t mind getting your payments in small increments. Annuities often don’t factor in inflation rates, or if they do, the extra amount added to your regular payments will get slightly bigger each year but won’t actually be worth more than the previous year. Maintenance fees are also added onto annuities, making the sum of money decrease rather than increase. Sounds like the opposite of a good investment, doesn’t it?