New York State lotto was established in 1967. Ever since its inception in the year, it has been drawing crowds of lottery players till date. It is located at Schenectady. While the lottery in the state offers an excellent opportunity for participants to earn money in millions, a majority of participants seek an answer to one of the most asked questions linked to the lottery. A majority of participants wonder what is the lump sum cash award on a 10 million dollar New York state lotto win. If you are also seeking the answer to this question, a careful reading of the subsequent sections will guide you through.
What does it mean to win the government approved lottery of the New York state? It actually means a lot as it can make one a millionaire overnight. You will have all the time in the world to count your cash and figure out how you are going to make use of it. But before you proceed with these plans, it is important that you get insights into how the stuff works.
How New York Lottery works?
Before you consider what is the lump sum cash award on a 10 million dollar new york state lotto win, it is imperative that you understand how lotteries operate in the financial capital of the United States. The manner in which the prize money of a lottery is dispensed in the city is different from the other places in the US. This distinctive nature can be attributed to its unique payout structure of lottery prize money to winners.
As is the case with the lotteries in the other American states, New York also provides two options of getting the prize money. One can either opt for a lump sum cash payment or choose to receive the fund via several installments. If you select the second option, you will be required to submit a check which would amount to 26 annual payments totaling up to 10 million dollars.
The first payment of the check is released within a vicinity of a couple of weeks from the date of its submission. One gets an amount of $250 sans the paltry amount which goes in the form of taxes. That is to say, one receives 2.5% of the prize money as the first payment after the submission of the check. This increases to 2.7% in the following year and it keeps increasing in each subsequent year until the payout of the entire amount.
One of the advantages of annual payments is that a winner gets to earn more in the form of interest rates over time. If the actual amount of money one receives over the installments is calculated, one gets a bit more than what one is supposed to get. This is due to the fact that the tax cuts are fairly lesser in comparison to the other option.,
But interestingly, a majority of winners opt for the other option i.e. lump sum cash. There is a reason behind it, though. No one wants to wait for that many years and keep receiving small payments over the period to cover the actual amount. If you have grand plans such as buying a car or a home, you would need cash at hand instantly.
Lump sum cash allows you to have a large amount of money at your disposal. You can translate your purchase goals into a reality using the prize money. That said, it is also essential to toss the other side of the coin and when you do so, the picture isn’t as rosy as it sounds.
When you decide to go for lump sum cash on a $10 million prize money, you also incur certain expenditure in the form of federal as well as state taxes. As soon as you let the state lottery, know that if you wish to withdraw the prize money in cash, it becomes half the original amount. In other words, those who opt for lump sum cash instead of annual payments, get $5 million as the prize money.
Still, it sounds exciting. Isn’t it? Yes, it surely does. But hang on, there is more to it. The government also applies both federal taxes and state taxes on this $5 million cash reward. If you do the math, you’d find that the resulting cash money reduces even further and the value stands at $2.5 million.
So, what is the lump sum cash award on a 10 million dollar New York state lotto win? The answer is pretty simple and straightforward. You get $5 million as the prize money which further reduces to $2.5 million when it ends up in your hands. You are the one who needs to take the final call. If you’re okay with the amount, there is no reason for you to decide otherwise.
A note on the prize money
Wonder why the prize money of New York state lottery is $10 million in the first place? There is a good reason behind it. The amount is the sum total of some careful calculations and considerations. What do the organizers consider while deciding on the prize money?
Firstly, they make certain that the lottery contest looks like an attractive prospect to participants. This is important as determines how many tickets would be sold. The idea is to make the contest appear promising in the eyes of participants.
So, organizers try their best to strike the right balance between the odds of winning and losing. Participants are likely to buy tickets only when they see a fair chance of winning a lottery. Organizers do their math and find out what amount of prize money fits into their scheme of things. The challenge before them is to work out an amount of money which does not affect their profit but at the same time also looks tempting to participants.
The permutation and combination of the chances of winning versus losing add up to $10 million. It sounds good to participants and the fact that the prize money becomes half its original value suits organizers. Thus, it is a win-win situation for both parties.
Final thoughts
New York state lottery is a great option to try both your luck and hand at game of lottery. Though the odds of winning and losing it weigh almost the same if you’d technically weigh them in a weighing machine, there are good reasons why it’s worth a go. The $10 million prize money is if the sole motivational factor which encourages gamblers to put their fortune at stake.
Now that you know what the $10 finally amounts to, both as annual payments and lump sum cash, making the decision to withdraw it should not be a big deal. However, on your part, it is important that you evaluate your options on how you wish to receive the prize money in advance. This will most likely let you figure out which one out of the two options is a better choice: annual payments or lump sum cash.
