What Should You Do If You Win The Mega Millions Jackpot?
$900,000,000. That is the estimated jackpot for Friday's Mega Millions lottery drawing. That's a lot of zeros! Whenever jackpots get huge, and this one is the third largest in lottery history, we all like to sit back and dream about what we'd do if we won the big one. The things we'd buy. The places we'd travel. But just for one minute, for practical purposes, let's pretend your numbers DID hit for Friday's drawing. What would you do?
Lottery officials say that if you win a large jackpot, you should put that winning ticket someplace secure, like a safe. Then consult with a reputable financial planner. Handling a chunk of money the size of what you've just won isn't as simple as putting it in a savings account. There is planning and investing to do. The first decision you'd have to make is to take the one lump sum of $513 million, or take the annuity paid out over the next 29 years. Nearly all winners take the lump sum. But the annuity has advantages. It reduces your tax bill and it provides a stable income that grows annually at 5%.
If you're wondering how long you have to claim your prize, it varies by state. Usually, you'll have anywhere from 180 days to a year. Getting your money takes a while too. It also varies by state, but most will most payout in a week or two. Now let's talk about taxes. When you win that huge payout, the federal government is going to take 24% right off the top. Then you've got your state taxes to pay. You also need to realize you'll have to pay again at tax time because you just went up several income brackets which means, you guessed it, more taxes!
Finally, can you keep your identity a secret if you win big? You can, if you live in Delaware, Kansas, Maryland, North Dakota, Ohio, and South Carolina. Some states will withhold your name for a certain number of days. But eventually, people will know you've won big. Change your phone number and get a new address!
Sure, all this planning is silly when the odds of winning are 1 in 30 million. But it's sure fun to dream big!