Lottery
A competition based on chance in which numbered tickets are sold and prizes are awarded to the holders of numbers drawn at random. A lottery can also refer to:
When someone wins the lottery, they’re often presented with the choice of receiving a lump sum payout or annual installments over several years, called an annuity. The latter option can make more sense, as it helps winners avoid spending their entire prize too quickly. In addition, it may help them to keep more of their winnings over the long term by allowing them to invest a portion immediately.
While many financial lotteries are considered addictive forms of gambling, there are some public sector lotteries that help provide access to goods and services. For example, a lottery might be used to determine the recipients of subsidized housing units or kindergarten placements.
During the Revolutionary War, Benjamin Franklin organized lotteries to raise money for the militia of Philadelphia. George Washington also managed a lottery, which advertised land and slaves as prizes in The Virginia Gazette.
Whether you’re buying a ticket or simply dreaming about hitting the jackpot, it’s important to consider your personal and financial goals before jumping in head first. Especially in the case of a large jackpot, it’s a good idea to consult a team of professionals, including a financial planner and certified public accountant. These experts can help you to decide whether an annuity or lump sum payout is the best option for you.