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Lucky Lottery Winner? What to Do If You Win the Lottery Jackpot

The world's largest lottery prize was awarded in November of 2022, awarding the winner a whopping $2.04 billion.

The lottery is constantly making headlines across the nation. When the jackpot gets big, we can't help but ask ourselves, what would we do if we won? Now we probably all have an extensive list of our first purchase, who we're telling, what we're buying, and where we're going.

But do we know what to do immediately after hitting it big? The odds of anyone winning the Mega Millions are about 1 in 303 million, and the odds of winning the Powerball are about 1 in 292 million. Although these numbers sound unlikely, they aren't impossible.

Even though winning the jackpot is not a stable financial plan, planning for the unexpected is always a great idea. Here are five tips to consider when you're the lucky 1 in 300 million.

  1. Celebrate by getting a team together

Winning the lottery sounds like a dream, but it is more complex than cashing in all that money. Immediately after winning, you will want a few professionals on your side. It is crucial to have a financial advisor and attorney helping you navigate what's next to come. There are stipulations, taxes, and options that will vary by state.

For example, if you're on vacation out of state and buy a winning ticket during your trip, you may have to pay taxes in both your home state and the state where your ticket was purchased. Having experts you can trust will be vital in navigating this win to your advantage.

  1. Look into anonymity

This is one of those things that a lawyer or financial adviser can help you determine. Not all states allow winners to remain anonymous. Depending on the prize amount and location, you may be subject to the public's knowledge of your newly found winnings. And although this is a moment to celebrate, it can be a good idea to remain anonymous to avoid any negative attention or solicitation from it.

If anonymity is not an option, take proactive steps such as getting a post office box or, in some cases, setting up a trust. Speak with your attorney and advisor about the possibilities of trust for anonymity and if it's a good fit for your situation.

  1. Consider your claiming options

To lump sum or not to lump sum? The way you cash out will vary depending on the prize type and amount. However, the big ones like the Mega Millions or Powerball offer two options:

Lump Sum: The lump sum allows you to cash out all at once but is heavily taxed. You will end up paying federal and state taxes regardless of your choice, but this option often takes a heavy, heavy amount on the front end.

Yearly Annuities: You receive an initial payment upon winning (subject to various taxes depending on your unique situation), followed by annual payments that increase by a certain percentage each year. If you were to pass before receiving the payments, the remainder would become part of your estate.

Everyone's situation is going to be different. This, again, is an example of having a good team of professionals on your side to cover your options in detail for making the best-suited option.

  1. Get to planning

Once you've figured out how you will be receiving your money today, it's time to plan for tomorrow. Next, you’re going to want to take care of important long-term goals such as,  planning your estate, setting up your will and building a budget. Paying off debts, setting yourself up for retirement, and caring for those around you will be key goals in managing your winnings. Speak with your financial adviser to assess the future for you in taxes and expenses to ensure your plan covers you going forward.

  1. Focus on your mental health

This win is most definitely life-changing in more ways than one. Unfortunately, it is an opportunity that comes with a lot of attention and financial repercussions if not navigated with care. Remember to step back whenever necessary to do whatever helps you recenter yourself amidst the chaos. Lean in on your family and trusted advisors to help you set yourself up for success with this new opportunity.

This is a once-in-a-lifetime chance! There will be a laundry list of things you'd take care of given this opportunity. Don’t worry, there’s going to be plenty of time to celebrate this win and enjoy your newfound winnings! However, those celebrations will feel so much better if you take the time to prepare for success. It is never a bad idea to put your best foot forward when you finally become 1 in 292 million.


Are you looking for more financial topics? Our Financial Academy page has you covered! Find helpful resources to help you do your best work and live your best life.

Investment advice offered through OneDigital Investment Advisors LLC, an SEC-registered investment adviser and wholly owned subsidiary of OneDigital.