Take the lump sum or the annual payments?

Charles W. Jackson Jr. celebrates as the winner of a $344.6 million Powerball jackpot Tuesday, June 4, 2019, at the N.C. Education Lottery headquarters in Raleigh, N.C.

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Charles W. Jackson Jr. celebrates as the winner of a $344.6 million Powerball jackpot Tuesday, June 4, 2019, at the N.C. Education Lottery headquarters in Raleigh, N.C.

Hitting the winning numbers in a lottery can be a life-changing experience.

On Tuesday night, one lucky ticket sold in New Jersey that matched all six numbers in the $202 million Mega Millions drawing.

The jackpot will reset to $40 million for Friday night’s drawing with a cash option of $28.1 million.

One of the immediate questions, whenever someone wins a giant jackpot, is whether that lucky person should take their winnings in annual payments or accept a lump sum.

Is one better than the other financially? Let’s break it down.

ANNUITY: The installments are paid out as one immediate payment followed by 29 annual payments, according to the Mega Millions website.

Pros: The biggest allure of the annuity for any winning or windfall is having a guaranteed income stream for the next 30 years, which largely ensures you never run out of money. For conservative types or those who can’t suppress their spending urges, this may offer some peace of mind.

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