TWO million-dollar prizes remain after a woman won the jackpot on a scratch card but she only walked away with half the prize.
Mom won the golden ticket when she bought a Jaws scratch-off at a Stop & Shop in Pembroke, Massachusetts.
“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.
Cobb won $1 million on a Jaws scratch-off. Shortly after discovering her prize, she faced the crossroads that every lottery winner faces: She could choose to receive half of the winnings at once or receive the full $1 million in several installments.
She chose the first option, receiving a one-time payment of $650,000 before taxes.
Cobb isn’t the only lottery winner to choose to forfeit half of his winnings; in fact, it is quite common.
In June, an Ohio woman received $15 million from a $50 scratch-off ticket she purchased at her local gas station.
“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 Jeanne went to the clerk, the clerk couldn’t believe his eyes.
Jeanne earned $600,000 a year for 25 years.
“I was speechless,” Jeanne said.
“What I kept thinking is that I’m just going to wake up. Is not real.”
Instead of opting to receive the $600,000 over 25 years, the shocked woman decided to receive a one-time payment of $7.5 million.
After state taxes, she took home $5.4 million.
Taking home the one-time payment may seem tempting, but lawyers and financial advisors argue that lottery winners should think twice before taking the money.
“Virtually everyone who wins the lottery chooses the lump sum distribution,” said Andrew Stoltmann, a Chicago-based attorney who has represented several lottery winners. CNBC.
“And I think that’s a mistake.”
Stoltmann said that “the typical lottery winner does not have the necessary infrastructure to manage such a large amount so quickly.”
Lack of planning to receive such a large amount of money at once can lead to reckless spending and other mishaps.
Those who want to win the lottery still have a chance with the Jaws scratch card.
Two other million-dollar tickets are still on sale, along with two tickets whose winners will receive a paid trip to Martha’s Vineyard.
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 create the financial infrastructure needed 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 get the lump sum or take the annual fee.
This story originally appeared on The-sun.com read the full story
