A fortunate player has experienced a life-altering win from the lottery, but a crucial decision has resulted in them walking away with only half of the prize pot. The winner, a beekeeper by profession, secured a $1 million prize from a state’s highly lucrative scratch-off game.
North Dakota resident Mason Maxwell, 47, was in Florida — where he resides during the summertime — when he decided to purchase a Diamond Mine 20X ticket from a SunStop gas station, as per a press release from Florida Lottery officials. The gas station was situated near Highway 441 in Lake City, approximately 61 miles west of Jacksonville.
After scratching off the ticket in his car last June, the part-time resident discovered his incredible fortune. The ticket revealed a $1 million prize in what officials dubbed an “un-BEE-lievable” win. At a price of only $10 per ticket, Mason made quite the return on his investment.
Mason subsequently traveled to the Florida Lottery headquarters in Tallahassee to collect his winnings, as is required for amounts totaling $1 million or more. The beekeeper was then confronted with a decision that would significantly impact the money he’d won. He could choose to receive the funds through a one-time lump sum distribution, or annuity payments spread out over what was likely 20 years or more.
Annuity payments offer a viable option for many lottery winners due to the consistent and dependable cash flow they provide each year, while also potentially avoiding significant tax implications. However, Mason opted to receive the money all at once through a lump sum instead, which meant he had nearly half his winnings immediately taken away due to taxes.
The federal government consistently imposes a 24% tax on lottery winnings that exceed $5,000. Individual states, however, determine their own taxable rates on these funds, and fortunately for Mason, Florida does not levy taxes on lottery winnings. Nevertheless, the 24% federal fee still constituted a substantial deduction.
Consequently, the beekeeper walked away with approximately $695,000, having $305,000 deducted. While it could be argued that Mason was still elated with the win, this scenario underscores the need for lottery winners to carefully consider what aligns best with their individual circumstances — whether lump sum or annuity payments.
Both options offer advantages. In the case of a lump sum, winners have the freedom to invest, save, or allocate the money as they see fit, rather than being restricted by annuity payments. Moreover, given the uncertainty of life, some may prefer to have immediate access to their winnings, ensuring they can enjoy their fortune while they have the opportunity.
Conversely, annuity payments provide a steady stream of income over time, potentially reducing the risk of financial mismanagement. Additionally, these payments may be subject to lower tax rates, depending on the specific circumstances. It’s crucial for lottery winners to seek professional guidance and carefully weigh their options before making this important decision.
