According to Loto-Québec, the multitude of options available to the winner that they can choose between is part of the appeal behind the Grande Vie lottery game.
“Customers are attracted to the concept behind our lottery products that give the chance to win an annuity … even if most winners opt for the lump sum prize,” said Renaud Dugas, spokesperson and head of press relations at Loto-Québec to Yahoo Canada.
The odds of winning the $25,000 a year for life prize — or $500,000 lump sum — are 1 in 2,224,698 as part of the Grande Vie lottery.
With the win, Savard plans to buy a new car, do some renovations, and invest in his future.
Savard isn’t the first winner to choose the $500,000 option, but Loto-Québec “urges winners to speak with relevant professionals to make the decision that best suits their situation,” said Dugas.
As for which option is more desirable, it’s good to take into account that it would take 20 years of collecting $25,000 for a winner to reach $500,000. When you factor in inflation, the value of the yearly amount becomes less desirable.
From an investment standpoint, winners could choose to put their lump sum prize in a secured investment, such as a Guaranteed Investment Certificate (GIC), allowing them to get back the principal they’ve invested at the end of a specified term — along with interest earned. For example, a one-year GIC with a 5 per cent rate nets an investor $25,000.
You can (also) consider riskier investments such as high-yielding dividend stocks.
In Canada, you do not need to report your lottery winnings as part of your taxes. However, the interest you do earn when you invest lottery winnings is taxable, according to the Canada Revenue Agency.
Tools to stop gambling
If you’re looking to take a break from gambling, self-exclusion programs can be effective tools. See here for resources that are available across Canada.
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