The odds of winning a million-dollar jackpot in the lottery are less than one in 18 million. To put things in perspective, you have a better chance of being struck by lightning (one in three million) than drawing winning numbers. However, Friday the 13th was one 7-Eleven customer’s lucky day.
The suspense must have been nerve-wracking for the shopper when their ticket matched the five numbers that were drawn in the lotterythat lucky day. Their million dollar ticket was all thanks to these five, personally picked numbers: 7, 38, 46, 49, 56. According to the VirginiaLottery news release, the winner has yet to claim their prize — and they have 180 days to do so.
Winning the lottery can often be compared to someone receiving a lump sum payment after selling their annuity or structured settlement. However, unlike selling a structured settlement, an annuity does not require a court order. To sell, you simply sign a contract and record the change of ownership with the insurance company that sold you the annuity in the first place. Then, once the ownership change is complete and the papers are signed, you receive your lump sum payment.
An annuity is a contract created when an individual pays a life insurance company a set amount of money, which will later be rationed back to that individual over time. People typically buy annuities to help manage their income during their retirement years, yet sometimes financial difficulties can arise before your annuity has reached the payout period. If this happens, people will often sell part or all of their annuity to other insurance companies.
For the lucky Friday the 13th lottery winner, they have a major decision to make: Take the cash option or the annual payout option?
Those who are unfamiliar with how taxes work on large lottery winnings, it is best not to choose the immediate Cash Option — yet everyone thinks this is the best way to go in order to receive the most money. Let’s say you have just won the $100 million lottery. Going with the cash option means you will likely receive half of the advertised amount, which would be $50 million, from which taxes will then be taken from, leaving you with around $30 million.
The Annuity Option, instead, would leave you with twice the amount of cash at the end of the day than the Cash Option. The annuity will pay you a set amount each month (so $100 million would pay $4 million per year) for 25 years. After taxes, you will receive roughly $67 million in total — a much more satisfying chunk of change than the Cash Option.
So hopefully Sterling, Virginia resident will be wise and go for the Annuity Option, but he does have 180 days to think about it.
