Would you rather be a millionaire — or collect reliable income every week for life?
That's the choice 20-year-old Brenda Aubin-Vega from Quebec faced after scratching off the top prize on her Gagnant à Vie ticket.
“I couldn’t believe my eyes! I checked my ticket over and over again,” she told Yahoo News Canada.
Instead of the $1 million lump sum, she chose the weekly annuity.
The decision prompted ridicule across social media, with Reddit commenters insisting the upfront payout was the rational move.
Here are some of the pros and cons of Aubin-Vega’s annuity approach.
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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). Many American winners also face state and local taxes on lottery winnings.
Fortunately for Aubin-Vega, she's Canadian and faces no taxes on lottery winnings. In other words, she could have claimed $1 million without any taxes or penalties. However, she would then face 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 — more than Canada's 10-year bond rate of 3.4%, and backed by the province of Quebec, making it about as secure as a government bond. At $1,000 per week, she'll reach $1 million by age 39 and about $3.1 million by 80.
If she automatically invests the weekly payouts into low-cost index funds instead of spending them, she could hit both milestones years earlier.
Investing platforms like Acorns make that incredibly easy.
The app can match her with one of five automated portfolios based on her goals, risk tolerance and time horizon. New users can even get a $20 bonus with a recurring deposit.
Plus, Acorns rounds up everyday purchases and invests the spare change. Over time, even small amounts grow, and recurring contributions keep money compounding on autopilot.
For those who don't play the lottery, this is its own version of buying a ticket — except instead of odds of 1 in 292 million, you're betting on the market's long-term track record, and you can't lose your stake.
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Auto-invest your spare change Taking a modest weekly payment instead of an eye-catching million-dollar jackpot could also 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.”
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 long-term growth than a fixed weekly payout.
Real estate is one such asset. U.S. home prices have grown at a compound annual rate of roughly 3.6% since 1991, according to the Federal Housing Finance Agency, and that's before counting whatever rental income a property brings in.
But the traditional route of becoming a landlord, managing tenants and dealing with repairs can quickly turn what looks like a straightforward investment into a second job.
There are now more accessible ways to get exposure to the asset class — many designed to be more hands-off.
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Arrived, for instance, is a platform backed by billionaire Jeff Bezos and lets you invest in shares of rental homes for as little as $100 without having to deal with late-night maintenance calls or chasing down rent payments.
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Hassle-free real estate ownership for as little as $100 Inflation is another downside risk for Aubin-Vega. The purchasing power of her weekly payments erodes 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.
A gold IRA is one way to hedge against that same erosion. It lets you invest in physical gold or gold-related assets within your retirement portfolio, pairing the tax advantages of an IRA with gold's long-standing track record as a store of value during inflationary periods.
There are specific rules around gold IRAs, and some states have different tax structures for the sale of gold and silver, so it's worth choosing the right dealer and custodian to help navigate the regulatory and tax hurdles.
Some companies also offer incentives, such as free IRA rollovers or free precious metals. Newport Gold, for instance, offers up to $20,000 in free silver on qualifying orders.
If you're curious whether this is the right way to diversify your portfolio, you can download a free gold IRA information guide.
Newport Gold
Diversify your retirement fund with a precious metals IRA For those who'd rather not lock in a fixed payment at all, there's a simpler option: put idle cash somewhere it can at least keep pace with inflation.
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 3.55% 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%³.
That's ten times the national deposit savings rate, according to the FDIC's March report⁴.
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 increase⁵ with no expiration date or balance limit, meaning your APY could be as high as 4.55%.
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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Even with careful planning, managing sudden wealth can be tricky.
Aubin-Vega could benefit from personalized advice to make the most of her weekly payments or a lump sum.
Free matching services like WiserAdvisor connect you with fiduciary professionals who specialize in sudden windfalls — whether it’s a lotto win or an inheritance.
A fiduciary is a professional legally bound to put your interests first. They can help create a custom asset-allocation plan that balances growth, safety, and long-term financial goals.
Simply answer a few quick questions through their online form and the platform will match you with a vetted financial advisor in 5 minutes.
You can set up a free, no-obligation-to-hire call to see how they can help you create an actionable plan and whether their approach and pricing model make sense for you.
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