In Lansing, Michigan, an unnamed lottery winner recently won a $42 million dollar Mega Millions jackpot. Lottery officials in the state are surprised to say that this lottery winner is doing something that is virtually unheard of in the history of Michigan’s involvement in the Mega Millions jackpot lottery: The winner intends on accepting the option that pays the jackpot out in yearly installments rather than requesting a smaller, single time cash payment.
The Mega Millions jackpot lottery is not solely a Michigan based lottery, but rather collects ticket sales from twelve different states - California, Georgia, Illinois, Maryland, Massachusetts, Michigan, New Jersey, New York, Ohio, Texas, Virginia and Washington. This allows the jackpot to climb much higher in a much shorter period of time, which is how the unnamed winner of the recent October 3 Mega Millions jackpot was able to score a cool $42,000,000. Although selecting the option that grants annual payments in place of a single lump sum payment is not completely unheard of among the twelve states included in this specialized lottery, it is very rare for anyone to opt for twenty six annual payments over a quick lump sum payment of the jackpot.
According to a spokeswoman who works for the state lottery in Michigan, Andi Brancato, she cannot remember a single Mega Millions lottery jackpot winner in Michigan ever opting for the annual cash payments option, even though Michigan has been involved in the Mega Millions drawing for six years so far. The winner of this jackpot has not been officially named yet, however the name of the winner is intended to be announced on Friday during a news conference in Michigan.
Lottery winners typically choose the option that pays out one single lump sum payment, because most lottery jackpot winners intend on investing their winnings. The winner of the October 3 Mega Millions jackpot, however, has indicated a preference for taking the annuity payments instead. This decision is being attributed to a drop in confidence in the market because of the current financial crisis and uncertainty regarding how the market will grow or further falter in future months. Since closing at its all time high just about a year ago, for example, the Dow has dropped by nearly 40 percent since the housing crisis began, and shows absolutely no sign of letting up anytime in the near future as certainty continues to drop in popular markets throughout the company.
By choosing the annuity payments, the lottery winner is likely expecting that their money will be protected, because more of their investment will not be lost while the market rights itself over the span of the next few months or years.
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3 comments ↓
This is interesting, but do we know for sure that that’s why the winner is choosing the annuity? Maybe they don’t trust themselves with that kind of money? Maybe they see it as a way to avoid all the hassles (family asking for money, “friends” asking for loans, etc) that come with having millions of dollars in the bank.
Either way, it’s interesting how things are changing.
The annuity may be the way to go for someone who does not trust anyone to give them good advice. I personally will take it all now. What a time to start investing!
Smart idea. Taking lottery winnings in payments allows the newly megarich a chance to learn how to handle large amounts of money for the first time. Considering that about one in three winners absolutely blows it within five years, it’s only in one’s own best interest to take it one year at a time and have the security of the guaranteed, life time income. It also backs off the notorious “friends” who feel they deserve a chunk of the winnings. The saddest stories are of those who give generously to loved ones, only to watch them spread it around and get nothing but ingratitude as thanks. “There oughta be a law.” It’s outrageous that they don’t get more help with financial counseling.
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