A NEW homeowner has managed to pay off their property only one day after buying it, thanks to the lottery.
The lucky player purchased a ticket not long after sealing the deal on the space and landed the debt-clearing payday.
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North Carolina resident Benny Murphy explained how the situation went down to officials earlier this week after winning the August 15 Cash 5 drawing, per the NC Education Lottery.
Murphy officially bought his new home in Mebane, about 30 miles east of Greensboro, on August 14.
“I closed on a house on Wednesday,” he told officials.
After closing on the space, friends suggested that Murphy could get lower mortgage costs if he won the lottery.
“They made a joke about lower payments if I won the lottery,” the player continued.
Murphy later headed over to the Quickmart convenience store in Mebane and purchased a Cash 5 ticket.
When the results came out, he’d matched all five numbers and landed a $439,527 prize pot.
Given that the total was above $100,000, Murphy had to head to NC Education Lottery headquarters in Raleigh to claim his money on Monday.
NOW OR LATER?
He was then confronted with the most crucial decision in the lottery winning process – how to receive the funds.
Murphy elected to get all of the cash at once in a one-time lump sum distribution, a popular choice among lottery winners but also highly controversial.
The lump sum sees significant taxes taken out for the federal and state governments.
A 24% tax is always placed on lottery wins above $5,000 by the federal government.
States choose their rate, or none at all, but North Carolina’s is set at 5.45%.
That means Murphy saw about $125,265 taken out of the win before he saw any of the money.
Lottery winnings: lump sum or annuity?
Players who win big on lottery tickets typically have a choice to make: lump sum or annuity?
The two payout methods can impact how much money you get from your prize.
Annuities pay out slowly in increments, often over 30 years.
Lump sums pay all at once but in a smaller amount, as taxes are withheld in one go. That means 24% of your prize goes to Uncle Sam right away. Many states tax winnings as well.
Annuities can provide winners time to set up the financial infrastructure required to take in a life-changing amount of money, but lump sums have the benefit of being taxed only once.
Inflation is also worth considering when making a choice, as payouts do not adjust with the value of a dollar. That means that you’ll likely be getting less valuable money towards the end of an annuity.
Each state and game pays out prizes differently, so it’s best to check with your state’s lottery to confirm payment policies. A financial advisor can also help you weigh the pros and cons of each option.
Experts have varying opinions on whether to take the lump sum or take the annuity.
MORTGAGE MANAGED
Still, he walked away with $314,262, a significant return on investment considering the price of the Cash 5 ticket.
It was enough to completely pay off the house he’d just bought, and then some.
Murphy told officials he planned to use any leftover money to boost his savings and fund a fishing trip.
Other players won even bigger prize pots this month nationwide.
A $44 million win in California has yet to be claimed, and the unidentified player could see half the funds vanish instantly.
Another three Powerball tickets worth a combined $250,000 also remain unclaimed in Delaware as the clock ticks for players to claim the cash.
