Lump sum or weekly? Depends on how you can structure the write-offs.
Posted on 12/20/2025 9:50:46 AM PST by where's_the_Outrage?
Would you rather be a millionaire or have safe, reliable passive income for life? That’s the difficult choice that many lucky lottery winners are frequently faced with. While the prospect of a seven-figure payout is tempting, 20-year-old Brenda Aubin-Vega from Quebec, Canada recently decided to take the recurring payment option instead.
After scratching off three piggy bank symbols on her Gagnant à Vie ticket, Aubin-Vega was stunned to discover she had just bagged the game’s top prize. “I couldn’t believe my eyes! I checked my ticket over and over again,” she told Yahoo News Canada (1).
After calling her dad and taking time off work, Aubin-Vega reached out to Loto-Québec to let them know she would be claiming her prize in the form of a $1,000 weekly annuity instead of the $1 million lump sum that was also available.
The decision prompted ridicule across social media, with Reddit commenters insisting the upfront payout was the rational move. The reaction underscores a broader debate about whether large windfalls are superior to guaranteed income.
Here are some of the pros and cons of Aubin-Vega’s annuity approach.
Pros
Taxes are, perhaps, the most important factor to consider if you’re ever faced with a choice between a sizable windfall or annuity. Income from gambling is fully taxable, according to the Internal Revenue Service (IRS) (2). Many American winners also face state and local taxes on lottery winnings.....
Cons
One of the downsides of picking a weekly payment instead of an upfront jackpot is the lack of flexibility. An annuity is permanent, but $1 million in cash can be freely invested in a wide range of asset classes, some of which could have delivered better growth opportunities.
(Excerpt) Read more at msn.com ...
I’d take the lump sum as well. Wifey knows someone who won Publisher’s Clearing House many moons ago. $23M. She chose the lifetime annuity. PCH is now out of business, and she is out of luck.
It’s $1000 in Canadian dollars so maybe $700 in US dollars. Who knows how much $1000 Canadian will buy in 20 years? But she probably made the right choice for a 20-year-old.
She already is retired. She could travel the world.
Most winners lose it all in a short time. This women may very likely live another 60 years. That is $52 thousand minus taxes every year. And she gets it through divorce and market up swings and down. She is not paying a broker to manage it. For most people who know nothing about money her choice is just fine. Its a very safe bet. And who knows what the market will do. And how much the government will bite her lump some with taxes through out the years. And frankly, she might understand her own limitations. This is a steady dependable annuity. Nothing wrong with that.
True, but back in the 70’s I remember times the Canadian Dollar was worth more than a USD. Living in Detroit we used to go to Windsor for lunch.
Lump sum or weekly? Depends on how you can structure the write-offs.
52 grand a year isn’t that great. And will get worse over time. But she can do good stuff with it.
Maybe the BEST reason to take One K per month, no money grubbing cousins are gonna look for a hundred bucks a month, nor a trip to the islands not even a case of Molsons.
If she took the million, which after taxes is maybe, 500 K that is only 10 years of her pay off.
If she lives into her thirties, she is ahead of the game.
Good move.
I would have thought that PCH would have been required to buy an insurance annuity for that. But maybe a smart bankruptcy lawyer was able to grab the money from the winners and give it to bond holders instead.
Most people would blow it taking it upfront.
Good move on her part
Yeah, but I got a lot of free magazines, record albums, 8-tracks, and cassettes from them!
She greatly increased her odds of avoiding being bankrupt and wretched like most lottery winners 2-3 years post-win.
If she lives to be 80, she will have gotten over 3 million dollars.
Tough choice? Sure, if you trust other people to do what they say, for the rest of your life.
Take the lump sum. You never know if promises will be kept or if you’ll be around to collect.
“Most winners lose it all in a short time.”
Yup—that is the biggest downside risk.
The thread notes many other risks with the annuity approach—and those are very real.
My wife had that issue with a former employer where she had a modest pension plan. We weighed the pros and cons—made a long list of each.
We decided on the annuity approach—but it was not a slam dunk. It was a close call.
“I would have thought that PCH would have been required to buy an insurance annuity for that.”
I thought that as well, but this is what I was told.
If you’re 20 something the weekly amount makes complete sense... You get all of the money. If you’re old and about to die, or you’re even somewhat close to being in that category, then taking the payout makes more sense.
It’s not rocket science.
Important to note: Lotto-Quebec winnings are not taxable as income in Canada.
Income tax on 51,780 in Quebec is 14%. She would need an investment return of 5.9% on 1 million to equal the tax-free income of 52,000 per year. However, an investment in a stock index fund would probably do better than that, and keep up with inflation.
The cash out and annuities are carefully calculated so they have about the same current present value.
“”””Fortunately for Aubin-Vega, she’s Canadian and faces no taxes on lottery winnings (4). In other words, she could have claimed $1 million without any taxes or penalties.””””
This is what surprised me. From my visits to Canada, that country likes to tax everything.
If she lives until 70 she will receive $2.5M instead of $1M.
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