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 ...
Clickbait.
at her age I would take the 1k per week and dollar cost average it every week into QQQ ... put it on autopilot ... and forget about it ...
Given the inflation in hand it is better to get the big chunk up front and buy gold with it.
The government has it about right. The after tax NPV at an 8% discount (opportunity cost) rate is roughly equal.
Grok:
“ Conclusion: Which Should You Take?
The $1,000 a week for 60 years annuity is still the better choice after taxes. Its after-tax present value (~$620,000+) exceeds the likely net from a $1,000,000 lump sum (~$640,000 max).
Additional factors:
• The annuity spreads tax liability over time, keeping you in lower brackets.
• If you have other income, live in a high-tax state, or the lump sum pushes more into the 37% bracket, the gap widens in favor of the annuity.
• Investing the lump sum could change this if you earn >8% after-tax returns consistently — but that’s risky compared to guaranteed payments.
• State taxes (0% in some states like FL/TX, up to ~8-10% in others) apply similarly to both but may hit the lump sum harder upfront.
Taxes are highly individual — consult a tax professional for your specific situation.”
This 20-year-old lotto winner refused $1M in cash and chose $1,000/week for life. Now she’s getting slammed for it. Which option would you pick?
Lotto winners who take the lump sum typically end up filing for bankruptcy. So as long as winner is happy with $1000/week, it was the better choice imo.
If she invested ALL of the $673,000 in the Nasdaq 100, she would probably come out best.
However, if she needs the $1,000 a week for living expenses, that would be a reasonable short term solution.
Her $52,000 per year annuity would have a much lower tax rate.
But - long term - no one knows what the inflation "tax" will be after 50 years.
To me, the larger the grand prize the greater the reason to take the lump sum because, additionally, I am not sure we can trust a particular lottery’s handling of its investments, to be sure the money for the 30 year payout will be there for the full 30 years. Take as much of the grand prize you can get in cash and invest it yourself if what you want is just so much every year for 30 years.
Recently Publishers Clearinghouse had to admit that some of its prize winners will not get their long term payouts due to its mishandling of its investments.
State lotteries, and the multi-state lotteries, like Powerball and Megamillions should be required by law to buy outside annuities from large highly reputable insurers to pay the long term 30 year payouts and not rely on their own handling of investments for that purpose.
100% agreed, only took 60+ replies to get here!
On the precipice of a fiat to PM financial system RESET, anything she'd buy with $1000/week, or a lump sum converted to stocks or bonds or whatever, the best thing would be converting a lump sum immediately to gold (or gold/silver mix), with a plan to keep the stack safe over the years. The stack would never be sold for fiat dollars, but retained for the following system when it emerges.
I’d take the lump sum and divide it among a range of low-cost Index Funds with half of it left over. Take small amounts from the some of the best performing funds every other month or each quarter and use that to pay my bills...Move the balance of cash winnings into reasonable interest-bearing accounts for whatever I want, including real estate and small private businesses to invest in. After the first 3 years, I might want to reconfigure my portfolio(s) according to whatever the situation calls for. I might even want to get a real job or just forget about the rat race altogether if I’m lucky enough to be in line for an inheritance.
“Her $1 million is $673,000 after federal tax. State and local taxes might also apply.”
She’s in Canada and pays no taxes whatsoever on the win. Taking the money that way is nuts. Spend a little on a finance degree and get rich.
Always wondered about PCH; it never seemed to go anywhere. I always wondered if anyone actually won anything from them. They sure wasted a lot of postage on me.
Always wondered about PCH; it never seemed to go anywhere. I always wondered if anyone actually won anything from them. They sure wasted a lot of postage on me.
If the lump sum is based on the cost of the annuity to purchase the $1 million, then the lumpsum will be around $400-$500,000, then you still have to subtract taxes, at least here in the USA, not sure about Canada. She’ll make that up in 10 years of monthly payments. Being 20, she probably did the right thing. A person can blow through $500,000 pretty quick and then its gone, but if she took the first 10 years and invested each weekly check she will be far better off and wiser at 30 years old.
1 mill - 400k taxes= 600k
600k x 4% (good income an growth fund) = $2000/ month.
That would be a coin toss, actually.
Between 1981-2006, gold actually lost value in US Dollars.
Between 2006 and 2025 - gold up almost 9X.
Between 2006 and 2025 - Nasdaq 100 up 15X.
Plus, it's just not that hard to earn over 5% with the million dollars if you can bear some amount of risk.
Where’s the fun in having $25 million at 85 years old?
Since she is 20, for the first 10 years let the weekly payment fund an annuity and remain untouched. Between 30 - 40 take weekly payment and do not touch annuity.
After 40, do what ya want.
She’s in Canada, they don’t tax the winnings at all.
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