A lottery winner's lucky dilemma: lump sum or annual payments? Here's what to know.

It's the difficult decision we'd all like to face.

Do I take my lottery winnings in a lump sum or spread them out in annuity payments over time?

There are pros and cons to either approach, experts say.

They also say that people overwhelmingly opt for the big payday up front.

Most opt for the big payout — by far

A Massachusetts Lottery spokesman estimated more than 95% of the winners eligible to make the choice want the big pay day.

They say they want the money now, thinking investments can be made and expenditures erased, he said.

Giant national jackpot games Powerball and Mega Millions offer the big lump sum or annual payments over 30 years.

Massachusetts' Megabucks offers a 20-year annuity payout as an option.

There are other payouts with games like the multi-state Lucky for Life Game, where the top prize is $1,000 a day for life. There's also a $25,000 per year for life win. And both have cash options, as well.

On a $1 million payout you would get $650,000 — before taxes

But, in general, the cash up front or annuity options are available to the bigger winners, including instant ticket winners in Massachusetts of $1 million or more. Those annuities are structured over 20 years.

On a $1 million payout, you would get $650,000 in a lump sum before taxes.

If you choose the annuity version, you would get 20 annual payments of $50,000 before taxes. The total after 20 years would be $710,000 after taxes.

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Annual payments also have advantages

Robert Pagliarini, founder of financial managament firm Pacific Wealth Advisors and author of "The Sudden Wealth Solution," said it's a given that most people opt for the cash payout.

And it has its advantages, he said, chief among them being "you get all the money up front and can do whatever you want with it."

But, he added, "I would argue that is the exact reason not to take the lump sum — because you get all the money up front and you can do anything you want with it."

Sudden wealth can be challenging — mistakes mean 'game over'

Pagliarini said sudden wealth can be extremely challenging.

"And so I love the annuity option," he said.

It provides a safety net for the nouveau riche "basically, to screw up, year after year after year. Every 12 months you're going to get a new deposit into your bank account."

Even after a decade of unwise or dumb financial moves, those annuity payments will still be coming in.

And, it's hoped, you will have learned by then how to manage your wealth wisely.

On the other hand, "You start making mistakes with the lump sum, and you spend that money down, it's game over," he said.

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Managing your own future with the lump sum

Mark A. Quintal is the CEO of A.G. Quintal Investment Co. at 2177 Acushnet Ave. in New Bedford, which was founded by his father in 1963.

It's a full-service brokerage firm offering investment and financial management services.

He said lump sum vs. annuities can be more than just a simple financial decision.

"Would a person be prone to blow it all immediately versus taking some over time?" he asked.

Personally, he said, he would choose the lump sum.

"I'd rather take it in hand and manage my own destiny and future," he said. "There's a time value of money element to it."

Quintal added, "That would be my two cents on it."

This article originally appeared on Standard-Times: What's better for lottery winners, lump sum or annual payments?