# Lump Sums Versus Annuities How They Can Affect Your Life

There are very few moments in life when a person can get a large windfall of money with — seemingly — no major strings attached. This happens only when, in a once in a lifetime moment, a person wins the lottery; or when a person received a settlement to put to rest a lawsuit. Lottery winners and recipients of settlements often feel as if their lives have been changed forever. However, the fact is that oftentimes, there are quite a few strings attached for these “wins”. This is especially true in the case of settlements, which are hard-won in the first place, and often end up being given in the form of structured settlements. What are structured settlements? Rather than receiving your money in a lump sum, recipients of structured settlements receive their money in the form of payments over the course of a long period of time. Lottery winnings can also be awarded in the form of annuities, with some stretching their payment period over the course of decades, as you’ll read below. However, even if you’ve already agreed to a structured settlement or lottery annuity, you don’t have to accept it for years to come. You can sell your annuity or sell your structured settlements for a lump sum — and this can change your life for the better. So, let’s look into what’s behind structured settlements and lottery annuities, and how calculating a structured settlement or lottery annuity for its worth and having it sold could be the best choice you’ll every make.

**Lottery Annuities And Structured Settlements: How They Work**

Lottery payouts and structured settlements may seem very different on a superficial level — what could they possibly have to do with each other? As it turns out, quite a bit. If you should win the Mega Millions, for example, you will have one immediate payment followed by 29 more payments. These payments are annual, and each one will be 5% larger than the last. Similarly, the Powerball annuity schedules 30 annual payments that all increase over a period of time. An immediate annuity, on the other hand, gives payments starting within 30 days. In the case of the lottery, the lottery automatically withholds 25% for federal taxes, and another six to 9% for state taxes, depending on where you live and your tax bracket. Structured settlements work in a similar way. Typically — though not always — a structured settlement offers less money than a lottery payment, though still quite a bit of money. In fact, the average structured settlement payout is $324,000; and yes, the recipients of structured settlements also have taxes to think about.

**Selling Your Lottery Annuity Or Structured Settlement: What It Can Mean**

If you’ve tired of your annuity or structured settlement, you may want to think about selling it for a lump sum. In the cases involving settlements, calculating a structured settlement is an important factor. Calculating a structured settlement involves calculating the worth of your structured settlement in the terms of lump sums. By calculating a structured settlement in advance of selling your structured settlement, you can be sure that you’re getting the right amount of money for your settlement — you’re getting what you’re owed. You can also get calculations regarding what your lottery payments are worth. There are many reasons why you might want a lump sum rather than an annuity. We’ll look at those below.

**How Lump Sums Can Benefit You In The Long Term**

There are many ways in which a lump sum can benefit people in the long run. Many find a lump sum more manageable than annuities — lump sums can actually be simpler to control ad understand than annuities. Dealing with your taxes can be much simpler. Furthermore, with a lump sum you can immediately begin working to pay off your debt. This is particularly relevant to Americans today, so often dealing with debt. If this is relevant to you, think about selling your annuity for a lump sum.

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