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The US Sun
I won a $4m lottery jackpot but walked away with less than half – after my grandkids’ share there’s not much left for me
By Charlotte Maracina,
3 hours ago
A GRANDMOTHER won millions after winning the lottery but lost half her money after she made a tough decision all lottery winners need to make.
Rachel Sadler from Lincolnton, North Carolina, won the jackpot $4 million prize on a $30 scratch-off.
North Carolina woman Rachel Sadler won $4 million on a scratch-off ticket Credit: North Carolina LotteryThe woman had to decide whether to take her money as a one-time lump-sum payment, which would cut her winnings in half, or an annuity payment Credit: Getty
Sadler bought her winning ticket from the Save Mart near her on Tuesday.
“I think I’m still in a state of shock,” she told Queen City News.
She plans to spoil her grandchildren with the winning money.
“I’ve got a bunch of grandkids,” she told lottery officials after picking up her prize.
“I want to make sure they have a nice future.”
Although Sadler won the $4 million prize, she’s only walking away with $1,716,009 after taxes.
The massive cut comes after the winner had to decide whether she wanted to receive her payout as a one-time lump-sum payment or in several installments over the years.
Taking the money as a one-time lump-sum payment would result in her only walking away with half of the $2 million and a little less after taxes.
Sadler opted for the lump-sum payment, leaving her with less than half of her original fortune.
TOUGH CHOICES
The North Carolina grandmother isn’t alone in picking the lump-sum payout over the annuity payment plan.
In July, a Massachusetts woman who won $1 million playing a Jaws scratch-off ticket only ended up walking away with $650,000 before taxes.
“This is life-changing,” lottery winner Erin Cobb told Mass Live.
“We will make the most of it, and will have some fun,” she said, adding that she wants to use part of her winnings to go on a family vacation.
A similar situation happened in June when an Ohio woman won $15 million on a $50 scratch-off ticket purchased at her local gas station.
Lottery winnings: lump sum or annuity?
Players who win big on lottery tickets typically have a choice to make: lump sum or annuity?
The two payout methods can impact how much money you get from your prize.
Annuities pay out slowly in increments, often over 30 years.
Lump sums pay all at once but in a smaller amount, as taxes are withheld in one go. That means 24% of your prize goes to Uncle Sam right away. Many states tax winnings as well.
Annuities can provide winners time to set up the financial infrastructure required to take in a life-changing amount of money, but lump sums have the benefit of being taxed only once.
Inflation is also worth considering when making a choice, as payouts do not adjust with the value of a dollar. That means that you'll likely be getting less valuable money towards the end of an annuity.
Each state and game pays out prizes differently, so it’s best to check with your state’s lottery to confirm payment policies. A financial advisor can also help you weigh the pros and cons of each option.
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