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Would you rather be a millionaire or have safe, reliable passive income for life? That’s the difficult choice that some lucky lottery winners can face.
While the prospect of a seven-figure payout is tempting, 20-year-old Brenda Aubin-Vega from Quebec, Canada, decided to take the recurring payment option instead.
After scratching off three piggy bank symbols on her Gagnant à vie (Winner for Life) ticket, Aubin-Vega was stunned to discover she had just bagged the game’s top prize.
“I couldn’t believe my eyes!” she told Yahoo News Canada (1). “I checked my ticket over and over again.”
Aubin-Vega called her dad and took time off work, then she reached out to Loto-Québec (which oversees gambling and lotteries in the province) to notify them she’d 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 many Reddit commenters insisting the up-front payout was the rational move in response to a post in the r/mildlyinfuriating Subreddit (2).
“‘Money today is worth more than money tomorrow,’” commented one user with the name shad0w1432. “Unless she doesn’t trust herself to use the lump sum wisely and properly invest it, this was not the wisest move.”
“Take the lump sum and buy a lifetime annuity that earns interest while giving you monthly payments,” wrote another user going by the name EfficiencyStriking50, adding that a financial planner would have advised this move.
These reactions underscore 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.
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 in the U.S., according to the Internal Revenue Service (IRS) (3). Many American winners also face state and local taxes on lottery winnings.
For example, the person who won the $1.5 billion Powerball jackpot in December of 2025 would take away just $516.7 million after federal taxes — perhaps even less depending on their home state (4).
Fortunately for Aubin-Vega, she’s Canadian and faces no taxes on lottery winnings, which do not have to be reported as income in Canada (5). 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 — and any income or interest she did earn could be taxable (6).
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 (7).
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 is also young, so her 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, eventually hitting $3.1 million in total payout by age 80. And if she invests the weekly payouts instead of spending them, she could hit both milestones years earlier.
Of course, there are some downsides to turning down a million dollars as well.
Starting with the 5.2% annual yield Aubin-Vega would be seeing on her jackpot, some Redditors noted that she could likely make the same return if she invested the $1 million in the stock market.
“If you make 5% on that million, you get $1000 a week and end up keeping the million,” commented ELMUNECODETACOMA (2). Other commenters noted that she may not live to see the full $1 million value of her win.
Another downside of picking a weekly payment instead of an up-front 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 deliver better growth opportunities over 30 years.
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, since 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.
This is one downside many Redditors were quick to jump on.
“Always take the lump sum,” wrote the user iDefectum (2). “[The] time value of money is not being considered. $1 million today is worth much more than $1 million in 19 years … investing $1 million at once will far outpace investing $1000 a week in any practical human life span.”
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 up-front.
Lotteries are the most popular form of gambling in the U.S., with Americans spending approximately $104.7 billion on tickets in 2024, nearly double the amount they spent in 2008 (8).
But the odds of winning are slim. For example, the chances of hitting the jackpot in a Powerball drawing are 1 in 292.2 million (9).
That’s why you might want to rethink gambling away your hard-earned money in the hopes of hitting the jackpot, opting instead to invest prudently and build your own regular income stream.
That way, you aren’t leaving your financial future up to luck.
Instead of dropping $2 for Powerball tickets, for example, consider investing your spare change in the stock market. Unlike lottery tickets, in which you win or lose, your spare change compounds in the market: Just $2 in roundups each day adds up to nearly $730 over a year, and that’s before it makes money in the market.
If that seems like a good idea to you, apps like Acorns can do the work for you.
Here’s how it works: Once you link your debit/credit cards, Acorns automatically rounds up your purchases to the nearest dollar and invests the difference into a diversified portfolio of ETFs managed by experts at leading investment firms like Vanguard and BlackRock.
For instance, if you buy a donut for $3.25, Acorns will round up the purchase to $4 and invest the change in a smart investment portfolio. So a $3.25 purchase automatically becomes a 75-cent investment in your future.
The best part? Sign up today and get a $20 bonus investment when you sign up with Acorns with a recurring contribution.
But investing in index funds or ETFs isn’t the only way to make passive income. Real estate is another option. But if you’re just getting started out, you may not have the cash on hand for a mortgage or have the interest in being a landlord.
If you want a reliable source of income — but you don’t want the added responsibility of property management — platforms like Arrived can make it easy to get your foot in the door.
Backed by world-class investors, including Jeff Bezos, Arrived allows you to invest in shares of vacation and rental properties, earning a passive income stream without the extra work that comes with being a landlord of your own rental property
To get started, simply browse through their selection of vetted properties, each picked for their potential appreciation and income generation. Once you choose a property, you can start investing with as little as $100, potentially earning monthly dividends.
For a limited time, when you open an account and add $1,000 or more, Arrived will credit your account with a 1% match.
Finally, many financial experts often suggest parking at least three to six months’ worth of expenses in an emergency fund, so you’re not scrambling to make ends meet during unforeseen circumstances.
And rather than letting that cash sit idle in a basic checking account, stashing it in a high-yield savings account could help you to grow your funds and remove the risk of inflation eating away at your savings.
A high-yield account like a Wealthfront Cash Account can be a great place to grow your uninvested cash, offering both competitive interest rates and easy access to your money when you need it.
A Wealthfront Cash Account currently offers a base APY of 3.30% through program banks, and new clients can get an extra 0.75% boost during their first three months on up to $150,000 for a total variable APY of 4.05%.
That’s ten times the national deposit savings rate, according to the FDIC’s March report.
Additionally, Wealthfront is offering new clients who enable direct deposit ($1,000/mo minimum) to their Cash Account and open and fund a new investment account an additional 0.25% APY increase with no expiration date or balance limit, meaning your APY could be as high as 4.30%.
With no minimum balances or account fees, as well as 24/7 withdrawals and free domestic wire transfers, your funds remain accessible at all times. Plus, you get access to up to $8M FDIC Insurance eligibility through program banks.
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We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Yahoo News Canada (1); Reddit (2); IRS (3); Yahoo Finance (4); Government of Canada (5); CTV News (6); CNBC (7); U.S. Census Bureau (8); AP News (9)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: finance.yahoo.com
