The post “I Would Never, Ever, Ever Take a 30-Year Payout,” Says Former Exec of Bankrupt Lottery Firm appeared first on Vegas Slots Online News.
Powerball won
Two Americans won the $1.7bn jackpot after the draw on Saturday. It’s the third-largest jackpot in US history and had Nevada residents queuing up on the California border last week with the hope of bagging the prize.
lump sums of $258.5m after federal taxes and other deductions
The winners are able to choose whether to take the lump sums of $258.5m after federal taxes and other deductions. Or they can take the annuity option, reducing the percentage of tax taken from the overall total, but spreading the payments out over 30 years, growing 5% each year.
Although this second option might sound appealing, a recent situation highlights the dangers of such a deal. As reported by The Daily Mail, Publishers Clearing House (PCH) has filed for bankruptcy, leaving customers who it promised ‘money for life’ in the lurch, which includes ten former lottery winners.
No more checks
The 72-year-old American lottery company has had to stop dolling out its lifetime checks to sweepstakes winners due to lack of funds. Former company execs told the Mail, lottery winners should learn from the situation and take the guarantee of an up-front lump-sum payment.
John Wyllie, a former jackpot winner who has received $260,000 in checks since 2013, described the bankruptcy as “a nightmare.” Wyllie told local Oregon news that he is struggling to find a job and had to sell his jet ski and trailer to make ends meet.
never, ever, ever take a 30-year payout.”
As explained by one PCH exec, the firm used to invest funds to ensure it had money to pay its winners. That process ended several years ago though, and the company’s debt spiked to $40m. Former Senior Vice President of PCH Darrell Lester said for this reason he would “never, ever, ever take a 30-year payout.”
More tax less risk
Of course, taking the lump sum means an increase in tax, but Lester believes this is a small price to pay for the security of guaranteed cash. The mandatory federal tax on lottery wins is 37%, which is why the $1.7bn jackpot winners take home only $258.5m each.
The Missouri and Texas residents aren’t the only winners though. At least 18 players matched all five white balls during the draw on Saturday. At least two selected the Power Play option, which would make their total winnings $2m each. In addition, 232 other players matched four or five white balls. This means if they selected Power Ball they won $100,000 each.
The post “I Would Never, Ever, Ever Take a 30-Year Payout,” Says Former Exec of Bankrupt Lottery Firm appeared first on Vegas Slots Online News.
