What to Do With the Lottery Jackpot
If you win the lottery jackpot, your first impulse might be to tell everyone who knows you, right? But that could be a big mistake. Instead, it’s important to keep quiet and take time to gather a team of experts. That includes lawyers, accountants and financial planners. These professionals can help you decide what to do with the winnings and weigh your options for how to receive them.
You can choose to take the prize in either a lump sum or an annuity, and this decision can impact how much you get. The lump sum option is the whole amount you have won. The annuity payment is made in annual payments over 30 years. If you win the Mega Millions jackpot, for example, you would be paid an initial lump sum of about $527.9 million. Then, you’d pay federal and state taxes on that amount. Then, you’d end up with an annual payout of about $65.1 million by year 30.
Many people play the lottery as a low-risk investment, but they may be missing out on better opportunities to save for retirement or college tuition. Even small purchases of a lottery ticket can add up to thousands in foregone savings each year. Whether you have won the lottery or not, it is a good idea to talk with a financial advisor about how to manage your money and stay on track for the future.