A GRANDMA won millions after winning the lottery but lost half her money after making the difficult decision all lottery winners have to make.
Rachel Sadler of Lincolnton, North Carolina, won the $4 million jackpot prize on a $30 scratch-off ticket.
2
2
Sadler bought her winning ticket at the Save Mart near her on Tuesday.
“I think I’m still in shock,” she said Queen City News.
She plans to spoil her grandchildren with the money she earns.
“I have a lot of grandchildren,” she told lottery officials after receiving her prize.
“I want to make sure they have a good future.”
Although Sadler won the $4 million prize, she only walked away with $1,716,009 after taxes.
The big cut comes after the winner had to decide whether she wanted to receive her payout as a lump sum payment or in multiple installments over the years.
Accepting the money as a one-time payment would result in her keeping only half of the $2 million and a little less after taxes.
Sadler opted for the one-time payment, leaving her with less than half of her original fortune.
DIFFICULT CHOICES
The North Carolina grandmother isn’t alone in choosing a lump-sum payment over an annuity payment plan.
In July, a Massachusetts woman who won $1 million playing a Jaws scratch card ended up with $650,000 before taxes.
“This is life changing,” said lottery winner Erin Cobb Live Mass.
“Let’s make the most of it and have fun,” she said, adding that she wants to use some of the winnings to go on vacation with her family.
A similar situation happened in June, when an Ohio woman won $15 million on a $50 scratch-off ticket purchased at her local gas station.
Lottery winnings: lump sum or annual fee?
Players who win big on lottery tickets typically have a choice to make: lump sum or annual fee?
Both payment methods can affect how much money you receive from your prize.
Annuities are paid slowly in increments, usually over 30 years.
Lump sums are paid all at once, but in smaller amounts since taxes are withheld all at once. This means 24% of your prize goes to Uncle Sam immediately. Many states also tax earnings.
Annuities can give winners time to establish the financial infrastructure necessary to receive a life-changing amount of money, but lump sums have the advantage of being taxed only once.
It’s also worth considering inflation when making a choice, as payments don’t adjust to the value of a dollar. This means you will likely receive less valuable money at the end of an annuity.
Each state and game pays prizes differently, so it’s best to check with your state’s lottery to confirm payment policies. A financial advisor can also help you weigh the pros and cons of each option.
Experts have differing opinions on the possibility of take the fixed amount or take the annual fee.
“I crossed it out and none of the numbers matched because I didn’t cross out all the numbers,” said the lottery winner who goes by Jeanne.
“I’ve scratched maybe 10 or 12 and I usually know if it’s a winner or not. So nothing matched, and I scanned it and said, ‘Winner, see the clerk.'”
When she saw her winnings, she was shocked.
With her $50 ticket, she earned $600,000 a year for 25 years, totaling $15 million.
“I was speechless,” Jeanne said.
“What I kept thinking is that I’m just going to wake up. It’s not real.
Instead of walking away with annual payments, she opted to receive a one-time award of $7.5 million, after taxes she took home $5.4 million.
This story originally appeared on The-sun.com read the full story
