Would you rather become a millionaire overnight or lock in safe, reliable passive income for life? That’s the choice many lottery winners face. While a seven-figure lump sum sounds irresistible, 20-year-old Brenda Aubin-Vega from Quebec opted for steady payments instead.
After scratching off three piggy bank symbols on her Gagnant à Vie ticket, Aubin-Vega realized she’d hit 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).
She called her dad, took time off work, and contacted Loto-Québec to confirm her decision: she would claim the prize as a $1,000 weekly annuity, turning down the $1 million lump sum that was also on the table.
Online, the decision quickly became a punching bag. Reddit commenters mocked the choice and argued that taking the cash upfront was the only logical move. But that reaction reflects an ongoing debate: is a big windfall better than guaranteed income?
Here are the main pros and cons of the annuity approach.
Pros
Taxes are usually the first thing to consider. In the U.S., gambling winnings are fully taxable, according to the Internal Revenue Service (IRS) (2), and many winners also get hit with state and local taxes.
That’s why the winner of the $1.5 billion Powerball jackpot on December 17 would net just $516.7 million after federal taxes—potentially even less depending on where they live (3).
Aubin-Vega, however, is in Canada, where lottery winnings aren’t taxed (4). That means she could have taken the $1 million without losing a chunk to the government. But she’d still face a different challenge: what to do with that money next, and how to invest it without blowing it.
By choosing $1,000 per week, she’s effectively securing what looks like a 5.2% annual yield on the value of the jackpot. Because the payments come through the province of Quebec, the income stream is about as stable as government-backed payouts can be. With Canada’s 10-year bond yielding about 3.4%, the annuity compares surprisingly well (5).
In other words, she’s locked in something that’s safer than the stock market and, at least on paper, more attractive than many bonds.
Her age makes the steady-payment option even more compelling. At $1,000 a week, she’d reach $1 million in total payments around age 39, and could receive roughly $3.1 million by age 80. If she invests those weekly payments rather than spending them, she could reach those milestones sooner.
There’s also a privacy advantage. A smaller, less flashy payout can reduce attention and pressure from people looking for a piece of the prize. As one Reddit commenter 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.”
Still, turning down $1 million upfront comes with real drawbacks.
Cons
The biggest downside is flexibility. An annuity is locked in, while $1 million in cash can be invested across a broad range of assets—and potentially grow faster.
For example, investing $1 million into a low-cost index fund and assuming 7% annual growth could turn that into several million dollars in about a decade. At that point, a 4% withdrawal strategy could produce stronger annual cash flow than $1,000 per week.
Inflation is another risk. Even if the payments remain stable, their buying power won’t. With 2% annual inflation, a $1,000 weekly payment could be worth less than half of today’s value by the time she’s 56.
And then there’s the ego factor. Being a millionaire at 20 carries a different kind of status than crossing that mark in your late 30s. For some winners, that alone is enough to choose the lump sum—logic aside.
