A year long family pass to both Disney World and Disneyland, including meals and lodging for the days you visit the park.
A mountain lodge near Breckinridge so that you can visit whenever you want for skiing, viewing the fall colors, and summer vacation days away from the city.
A Mediterranean cruise with unlimited stops at all of your dream locations.
A backyard pool with a rock climbing wall that doubles as a diving platform into the 20 foot dive tank end of the water.
Send your youngest daughter to medical school.
Big dreams, big money, or small wishes after a big lottery payout? No matter how you look at, the decision about what to do when you win the lottery might start as a list of wishes. In reality, however, the real decision is not how you will spend the money, but when you should decide to take the money.
If you really find yourself trying to decide what to do when you win the lottery, the very first decision will be making the choice between a lump sum or annuity payout. The lump sum will obviously get you the entire amount, after taxes and fees, the fastest. The annuity option will allow you to get more of your money, but the payouts will be stretched out over as many as 30 years.
If you have a lot of high interest debt, it is likely a better decision to take the lump sum. It does not make sense to continue paying high interest rates on current debt if you have money that is owed you. If, however, you are in a good financial situation, the annuity decision could be the better choice.
Before a winner can make any decision about what to do with the money, the initial finance decision is one that is made by the government. The lottery withholds 25% for federal taxes from the total award amount. Depending on the state where the winner lives and the winner’s tax bracket, another 6% to 9% could also be deducted.
While some people are tempted to take a lump sum, at least 37,000 Americans use structured settlement money a year, and are confident in knowing that they have many more years of payments to come. If you ever have the chance to decide what to do when you win the lottery, at least you know that you will be deciding between two profitable choices. One, to take the lump sum payment and pay off all of your current debt. Two, to take the Mega Millions annuity, or other lottery payment, by receiving one immediate payment followed by 29 other annual annuity payments. As the years progress, each following payment will be 5% bigger than the previous one. Lump sum and annuity decisions are an opportunity to decide between great and even better.