Quebec lottery player wins $25,000 a year for life — but opts for different prize

The Mauricie resident's decision is not that uncommon, and makes even more sense when you consider the investment opportunities.

Quebec man holding a lotto cheque.
With the lotto jackpot, Pierre Savard has some modest plans ahead. (Courtesy: Loto-Québec)

A Mauricie, Que., resident won $25,000 a year for life in the lottery game Grande Vie, but decided to instead cash it in for a lump sum prize of $500,000.

On Oct. 20, the day after the draw, Pierre Savard received a strange call from a number he did not recognize. After some quick research, he realized that the number belonged to Loto-Québec, and decided to check his account for an update. At first, he thought he’d won $25 and couldn’t believe his eyes.

Savard, who regularly purchases his lottery tickets online for convenience, quickly double checked the winning number, and soon realized that he had won $25,000 a year for life, with the option to receive a lump sum prize of $500,000.

“I was wondering why Loto-Québec would call me for $25,” said Savard.

“I got goosebumps all over!”

Grande Vie is a $3 per play game, with a draw every Monday and Thursday. Each play includes a selection of five main numbers and one grand number.

Prize winners win a lifetime annuity, but may choose between the annuity or a specified lump sum. If players match five out of five numbers, including the grand number, they win $1,000 a day for life, or can opt for the $7,000,000 lump sum. In this case, Savard only matched five out of five numbers — 03, 22, 24, 31, 47 – to claim his $25,000 a year for life reward, with the option to collect a $500,000 lump sum.

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.

Related lotto stories from across Canada