19 Feb Tips for Selling Your Lottery Payments
Many people dream of winning the lottery — that’s why the Powerball jackpot climbs so high — but what a lot of people do not realize is that most lottery winnings are paid over long periods of time. The Mega Millions lottery is paid out in one large payment, followed by 29 annual payments afterwards. Each yearly payment is about 5% greater than the one before it. In other words, if the payout is $50 million, a winner would get a payment of about $500,000 at first. The largest payment that person would receive would be about $3.1 million.
As great as this is, it’s not the best solution in most financial situations. Here’s what you should know about making your lottery payments work for you.
Can I Sell My Annuity?
Yes, you can. Many people actually sell their lottery payments to deal with their financial problems. The first thing you need to do is determine why you want to sell it. You will have to have the sale approved by a judge, who will ask about your reasons.
What Are Some Commonly Accepted Reasons for Selling Lottery Payments?
- Avoid bankruptcy.
In 2015, approximately 3,422 people filed for bankruptcy every day. At the same time, about 64 million people in the United States have trouble paying their bills. That’s nearly 35% of the entire country. If you are facing bankruptcy, selling your lottery payments may be the best thing for you and your credit score.
- Pay medical bills
Nearly 50% of bankruptcy filings in the United States are caused by medical debt. This means that most Americans are always one medical crisis away from filing for bankruptcy. If you or a loved one is facing a tough medical problem, selling your lottery winnings can help pay those bills, so that you can focus on getting better not paying medical bills.
- Pay for an education
Completing college is a great way to increase your earning potential, but getting a higher education is expensive. From 2014 to 2015, the amount of outstanding student loan debt grew from $1.21 trillion to $1.3 trillion. Most people owe an average of more than $11,000 in student loans. If you want go to college or want to finance a college education for your children, one of the best gifts you can give is paying their college tuition. Remember, if you keep your lottery annuity, it will be difficult to you get financial assistance to pay for college, as it’s viewed as an asset that can prevent you from being eligible for loans or grants. The average tuition for the 2014-15 academic year was more than $31,000 at private schools and more than $9,000 at public universities.
- Start a business
Many new businesses do not succeed, because they cannot get access to start up capital. Experts say that the average cost of starting a new business is $30,000 or more. If you have always wanted to start a business, selling your lottery payments can be just the way to do that. Having a lot of money to invest in a new company will not guarantee it does well, but it will go a long way.
- Pay off your mortgage or buy a dream home
If you owe a lot on your home or want to buy a house, selling a lottery annuity can help you get the cash you need to make that purchase. You may also be able to get a better deal on your new home if you can buy it outright. At the very least, you will save a lot of money by not having to pay interest on a loan over a number of years or decades.
If you have lottery payments that you think you might want to sell, you have a big decision to make. The vast majority of people who sell their lottery annuity or structured settlement are happy with their decision, as more than 90% of respondents said in a survey. At the same time, every situation is different. Talk to your family and seek out the advice of a trusted and experienced financial advisor. Take an honest look at your financial situation and decide what the best thing is for you, your family, and your situation.