Would you rather take a million dollars upfront or choose steady, reliable passive income for life? That’s the tough decision many lottery winners face. While a seven-figure payout is tempting, 20-year-old Brenda Aubin-Vega from Quebec, Canada recently chose the long-term option instead.
After scratching off three piggy bank symbols on her Gagnant à Vie ticket, Aubin-Vega realized she had won the game’s top prize.
“I couldn’t believe my eyes! I checked my ticket over and over again,” she told Yahoo News Canada.
She called her dad, took time off work, and then contacted Loto-Québec to claim her prize. Instead of the available $1 million lump sum, she opted for a $1,000 weekly annuity for life.
That choice sparked backlash online. Reddit users and social media commenters mocked the decision, arguing that taking the cash was the smarter move. The reaction highlights a long-standing debate: is a large windfall better than guaranteed income?
Here’s a closer look at the pros and cons of Aubin-Vega’s decision.
Pros
Taxes are often the biggest factor when choosing between a lump sum and an annuity. In the U.S., the IRS fully taxes gambling income, and many winners also face state and local taxes.
For example, the winner of the $1.5 billion Powerball jackpot on December 17 would take home about $516.7 million after federal taxes — and possibly less depending on the state.
Aubin-Vega doesn’t face that issue. Canada does not tax lottery winnings, meaning she could have claimed the full $1 million tax-free. However, that would leave her with the challenge of managing and investing a large sum responsibly.
By choosing $1,000 a week, she effectively locked in a 5.2% annual return. Since the payments come from the province of Quebec, the income is nearly as secure as a government bond. For comparison, Canada’s 10-year bond currently yields about 3.4%.
In simple terms, she secured an asset that’s safer than stocks and pays more than most bonds.
Her age also works in her favor. With weekly payments, she’ll reach $1 million by age 39 and collect roughly $3.1 million by age 80. If she invests those weekly payments instead of spending them, she could reach those milestones even sooner.
There’s also a privacy benefit. A steady weekly payout attracts far less attention than a flashy million-dollar jackpot. As one Reddit user put it, “The vultures don’t start circling.” It’s one of the few ways to win a million and keep it quiet.
Cons
The biggest downside is flexibility. An annuity is permanent, while $1 million in cash can be invested across multiple asset classes, potentially generating much higher returns.
For instance, investing $1 million in a low-cost index fund with an assumed 7% annual return could turn into several million dollars in about 10 years. At that point, a 4% withdrawal rate would generate more income than the annuity.
Inflation also poses a risk. Over time, rising prices will erode the purchasing power of her weekly payments. With 2% annual inflation, today’s $1,000 a week could be worth less than half its current value by the time she turns 56.
Finally, her decision costs her bragging rights. Becoming a millionaire in your late 30s doesn’t have the same impact as doing it at 20. For some winners, that alone makes the lump sum irresistible.
In the end, Aubin-Vega chose stability over spectacle — a decision that may not impress the internet, but could serve her well for decades to come.
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