Things You Should Know Before You Claim a Lottery Jackpot

A lottery jackpot is a large sum of money that’s won in a game of chance. Some states use the proceeds from lottery tickets to address gambling addiction or to support educational initiatives. Others put the money into a general fund for potential budget shortfalls or to pay off debts. Regardless of how the money is used, winning the lottery can be life-changing. It’s human nature to daydream about winning the lottery or back a company in an IPO that takes off and pays off big, but those who win can also find themselves worse off than before.

The odds of hitting a lottery jackpot are slim. According to the National Weather Service, you’re 20,000 times more likely to be struck by lightning than win the Mega Millions prize. Even if you do manage to hit the lottery, there are plenty of things you should know before you start spending your newfound wealth.

First, you should sign the back of your ticket and store it in a safe place. Next, you’ll need to decide how you’re going to claim your prize. Some people prefer the lump sum cash option, while others prefer to take the annuity payment over 30 years. If you choose the annuity, federal and state taxes are taken out before you receive each annual payment. In addition to weighing your options, you should also consider whether you’re ready to handle the responsibility of managing hundreds of millions of dollars.