- - 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?

Vishesh RaisinghaniDecember 19, 2025 at 7:00 PM

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Let’s go over the pros and cons of each option.

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.

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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.

The person who won the $1.5 billion Powerball jackpot on December 17 would take away just $516.7 million after federal taxes and perhaps even less depending on their home state (3).

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. However, she would then be faced with a difficult decision about investing that lump sum.

By taking the $1,000 weekly payments, Aubin-Vega has effectively locked in a 5.2% annual yield on her jackpot. Since the payments are provided by the Canadian province of Quebec, this annual yield is nearly as safe as the yield on a government treasury bond. Canada’s 10-year bond currently offers a 3.4% yield, which makes Aubin-Vega’s move seem more financially savvy (5).

Simply put, by taking the weekly payouts, she has secured an asset that is safer than the stock market and more lucrative than the bond market.

Aubin-Vega’s age is another factor that makes the weekly payouts more attractive. By collecting $1,000 a week, she will reach the $1 million milestone at age 39 and eventually hit $3.1 million in total payout by age 80. If she invests the weekly payouts instead of spending it, she could hit both milestones years earlier.

Finally, taking a modest weekly payment instead of an eye-catching million-dollar jackpot could make Aubin-Vega less vulnerable to bad actors. As one Redditor put it: “The advantage of not taking the lump sum is that the vultures don’t start circling for a payout. It’s the only way you can win a million and tell people.”

However, there are some downsides to turning down a million dollars.

Read More: Many Americans overpay for these 5 ‘must-have’ items — how many are on your list?

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.

For instance, investing $1 million in a low cost index fund and assuming a 7% annual growth rate could have turned Aubin-Vega into a multimillionaire in roughly 10 years. At that point, a 4% annual withdrawal would deliver more cash flows.

Inflation is another downside risk for her. The purchasing power of her weekly payments is gradually eroded over time. Assuming annual inflation of 2%, a weekly $1,000 payment could be worth less than half today’s value by the time Aubin-Vega is 56 years old.

Finally, Aubin-Vega’s decision also eliminates her bragging rights. Being a millionaire in your late-30s simply isn’t as impressive as being a 20-year-old millionaire. For some lucky lottery winners, that’s enough of a reason to take the money upfront.

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Article sources

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

Yahoo! News (1); IRS (2); Yahoo! Finance (3); Government of Canada (4); CNBC (5)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Original Article on Source

Source: “AOL Money”