A secure financial future

Let’s talk about winning the lottery. Hey, it could happen. Do you have an idea of what to do when you win the lottery? We aren’t talking about what kind of luxury vacation to take, and what type of dream car you’d drive. We’re talking about the brass tacks how and what to do to protect your financial well-being.

You’ve probably heard the horror stories of people who won the lottery and then ended up penniless (or worse) in just a short time. Let’s talk about how not to do that:

  1. Know the difference between receiving lump sum and annuity payments.

    When you go to the lottery office to pick up your winnings, your first choice is going to be choosing between lump sum and annuity payments. You can opt to receive a large amount in one check, or smaller payments on a regular basis for the next 20 or 30 years. The payment structure that works best for you depends on your winning amount and lifestyle; however, in most cases, when choosing between lump sum and annuity settlement, the lottery annuity payout will give you more money in the end and financial security. This is what you should know before choosing between lump sum and annuity payouts:

    • Tax implications. You will be taxed on your winnings based on what you receive in a single year. If you get annuity payments, you will be taxed based on the value of the payments you received that year, which will probably be 33%. If you get a lump sum, you will be taxed on all of it, which could put you in the highest tax bracket, which could be 39%. A lot more of your jackpot goes to Uncle Sam when you choose a lump sum.
    • The winning calculation. When you win a $1 million jackpot, you don’t actually get $1 million if you take the lump sum. What the lottery office actually gives you is the amount that they would invest on your behalf to grow $1 million over the span of 20 or 30 years, with the idea that if you invest it, you’ll get the same amount. This isn’t really fair because you get it after taxes, so you have less to invest. But that’s how it goes.
    • Are you prepared for it? One of the biggest reasons taking annuity payments protects your future. Many people have never had the level of wealth that a lottery gives, so they spend money frivolously until they suddenly have zero dollars. An annuity allows you to live better, but stretches the winnings out throughout your life.
  2. Tell no one.

    When you win the lottery, friends and distant family members will crawl out of the woodwork looking for handouts. Lottery winners have actually been put in danger by the people closest to them because of the hunger for money. Some have been murdered for their money. Do not tell anyone if you win the lottery. Delete your social media accounts and lay low for a while.


    In some states, you are required to pick up that giant check, and your mug is plastered all over the news after winning the lottery. If you live in a state with these (silly) practices, hold the check in front of your face when pictures are taken, to hold onto as much anonymity as you can.

  3. Don’t make big purchases for a while.

    You know the feeling of payday. You feel so wealthy, you go blow it, and by the end of the week you’re broke again. Sometimes, winning the lottery does this in hyper-drive, leaving you penniless quickly, sometimes with huge financial obligations you cannot manage.


    When you win the lottery, do not go buy huge house or an excessive vehicle. Give yourself about a year to think about how you want to spend the money responsibly. Meet with a team financial experts to help you understand the best management of your money over the long term.

Everyone dreams of winning the lottery. However, winning the lottery does not equal a happy (or wealthy) life. If you win the lottery, you cannot throw your brain out the window. Being cautious and responsible will protect your financial well-being throughout your life.

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