It’s always nice to win the lottery, even if you only won several dollars. When it comes to small prizes, the choice is easy. You’ll either reinvest them in the next session or purchase a gift for yourself. But what you should do when you win a lottery jackpot?
We assume that you are ecstatic about the huge reward, and that’s perfectly fine. You have the right to be excited, but once everything settles, it’s important to do the right thing. That will ensure you secure yourself for years to come instead of being afraid of declaring bankruptcy despite that wealth.
What to Do Before Claiming Your Prize
Before we say anything, we strongly advise that you watch every lotto draw for which you purchased tickets. Many stories about lottery winners discover that they don’t always watch the draw live , which is why they find out about the jackpot days or weeks later.
It’s vital to confirm that you are the lotto winner as soon as possible. That’ll give you more time to prepare to claim your ticket before the deadline. Here is what you should do before claiming the reward.
1. Find Your Ticket and Keep It Safe
The initial step is to find where your ticket is. Now, this is something you should take care of even before the session. Players tend not to watch their tickets before the draw starts. That’s why we often forget it’s in our wallets or other jacket’s pockets. However, once we see our favorite numbers on the screen, we start panicking about where we left the ticket.
We strongly advise having a safe place to keep all your tickets. You never know when you might become the jackpot winner, and you need the ticket to claim the prize. Otherwise, you risk becoming one of those lottery winners whose tickets were never claimed. It takes minimal effort to put the lotto slip in your wallet or another safe place, so make sure to do it as soon as you buy it.
Another convenient option is to purchase tickets online. If you stick to the best lottery sites, you can buy tickets for dozens of worldwide lotteries in seconds. Additionally, all tickets remain in your virtual inbox, which means you can’t lose them. And if you win the jackpot, the lotto provider will contact you with details on how to claim your reward.
2. Keep Your Mouth Closed for Now!
We know that you can’t wait to tell everyone that you won the lottery. Sharing the wealth with your close ones and your family members is probably one of the things that went through your mind seconds after you won the reward. However, the experts suggest that you should keep your mouth shut at first.
That’s because you want the adrenaline to decrease, which will allow you to assess the situation realistically. If you share the news with your friends and even invite them to celebrate, you won’t have time to think about how to handle the reward. It’s crucial to have your peace in the first days after winning the lottery.
If you must share it with someone, don’t let it be more than a person or two. Perhaps you have a live-in partner or a family member, and you can consider sharing with them. However, consider that only if you trust them absolutely. Some people can’t contain information even if they promise to keep a secret. Therefore, it’s ideal not to tell anyone about the reward. There’ll be enough time for celebration – your initial task is to keep yourself protected.
3. Don’t Make Sudden Life Changes Immediately
What’s the first thing that would come to mind if you won the lottery? Lotto winners usually think “I’ll never work another day,” or “I’m moving to a new country and starting over tomorrow.” Those are all options that the huge loads of cash allow. However, you must not make any rash decisions or sudden life changes immediately.
First, you should understand claiming your prize is a process. It might take days or weeks, but during that time, you won’t have the money available. That might be for the best because it gives you time to think. If you’ve wanted to quit your job for a while, keep it for a few more days. The idea is to cool down your head and think clearly. If you think you are ready for a big life change, go for it. However, make sure to do that without rushing the decision.
4. Change Your Address & Go Unlisted
Many lottery winners advise others to stay anonymous after winning a lotto jackpot. However, the truth is that some states require you to reveal your identity publicly. That’s how the state lottery proves the game’s transparency. Fortunately, there’s another trick you can do before claiming your prize.
The idea is to change your address and go unlisted. You can consider moving to another zip code, or at least a different town. The crucial thing is not to let anyone know why you are doing it, but also where exactly you are going. You only share that information with your close ones. That way, you secure that acquaintances can’t find you and there’s no option for people to send you letters asking for money.
You can even take the next step and go unlisted. That would require changing your address, phone numbers, e-mails, and social media accounts. It might be impossible to completely off the grid, but delisting your address and changing it to a post office box for letters can be a smart move.
Why It’s Important to Stay Anonymous If Possible?
If the state or country where you purchased the ticket gives you an option, use it and stay anonymous. The experts pinpoint multiple benefits of that move, including:
5. Gather a Team of Professionals
A small number of people have millions of dollars piled up in their accounts. That’s what happens when you win a lotto jackpot, which is why you might be confused about how to handle the new situation. It’s where a team of professionals comes into play. It will be an expense, but one that will be worth it because you’ll navigate the entire situation better.
Here are the professionals you’ll need:
6. Calculate Your Prize and Decide on the Payment Option
The advertised jackpot usually isn’t the sum that ends up in the hands of a lottery winner. The exact amount you’ll receive could be smaller, and it depends on two factors:
When it comes to taxes, they vary on the location. Some countries don’t impose any taxes, while others have a rate of up to 30%. The best way to check is to use our lottery payout and tax calculator. It’ll help to understand federal, state, and any other applicable taxes that could reduce your reward amount.
Another option that could affect the jackpot sum is the payment option. Large lotteries like US Powerball usually advertise the prize if you use the annual or monthly payment option. However, you can also choose a lump sum payment rather than installments.
That means you’ll receive the money at once, but the sum will be decreased. The lottery will analyze everything and establish the current value of a prize you’d receive in total by the time of the last installment. Once you have all this information calculated, you’ll know how much money you receive.
Now, here are the advantages of a lump-sum payment:
- No risk you don’t get the money in the future – lotto payouts should be safe, but you never know what can go wrong over time.
- Using the current tax rates – the taxes might change in the coming years.
The problem is that you’ll give up virtually guaranteed revenue in the future and have a higher risk of wasting your money by mismanaging it.
If you go with installments, these are the pros:
- Cashflow in the long run – even if you run out of money, you’ll receive the next installment at the end of the month or year.
- Protect yourself from overspending – if you are afraid you could waste the jackpot, it might be smart to receive it in installments.
The downsides of this method are that inflation might mean you’ll receive less money in your future. There’s also the risk of your death since most lotteries only allow one beneficiary, which can make problems among your heirs. Ultimately, it all comes down to your preference.
What to Do After Claiming Your Prize
You went to the lottery office to claim your prize, and it was paid out to your account. Those are great news, but this is the time when you need to act smartly. You can set aside a small sum to spend on purchasing the desired items and celebrating with others, but money management becomes crucial now. Here are the aspects to consider after claiming the prize.
1. Organize a Meeting with Your Consultants
The entire expert team you hired before claiming the jackpot should now be ready to do their job. Organize a big meeting where you’ll agree on the moves of the attorney, tax specialist, and financial advisor. Listen to what they have to say and try to make the best possible decision in every area. They’ll help you with your plans on purchasing real estate, setting up funds, and any other things you wanted to do with the money.
2. Always Start by Paying Your Debts
Did you take a loan from a family member? Do you have a bank loan for college studies or you took out a mortgage? Whatever your debts are, make sure to pay them off completely right away. The odds are you’ll be able to pay all your debts, and there’s peace of mind knowing you don’t owe anything to anyone.
3. Set Aside a Fund for Unpredictable Situations
The experts advise creating a fund for unpredictable events and situations. It might be you or your family member getting into a health emergency, perhaps there’s a fire in your house, and you need to find another property quickly. Whatever the situation, you’ll be able to overcome it by using money from this special fund. Make sure to treat it as a last resort – only take money from there if you don’t have any other option.
4. Establish a Retirement and College Fund Account
You might still be able to work and plan on managing and increasing your wealth if possible. However, the time will come when you’ll only want to enjoy the wealth. Once that happens, you’ll appreciate the money you set aside in the retirement account. You can consider an annuity plan or establish a new account and set sufficient money aside right away. Either way, consider it the same as the unpredictable event fund – only access it once you actually retire. It’s an excellent way to protect your financial security in the future.
Another thing to consider is to establish a college fund for your children. That’s an excellent method of ensuring they’ll get high-quality education once they grow up. You have many savings plans for college, and you can use them for your or anybody else’s children.
5. Invest, but Be Careful
Investing a portion of your funds is the way to secure constant income in the future. You need to consider other lines of revenue because you can’t rely only on the lottery win. The experts suggest diversifying your investments, which is why it’s smart to consult a financial advisor. You have many options available, and the basic one includes investing in shares and stocks. Also, you can consider sponsoring startup businesses, partnering and investing in existing companies, etc.
6. Don’t Forget Those Who Aren’t That Fortunate
Not everyone had the luck to become a lottery winner. Many people are struggling to make ends meet and need all types of help. That’s why you should consider setting up a charity fund or at least investing in charity organizations. You can consider giving away free books for children’s education, providing meals for the less fortunate in your areas, or whatever you feel like doing. Unfortunately, many people could use help. That’s why it’s up to you to choose, but don’t forget to show your humane side and donate a portion of your winnings.
7. It’s Crucial Not to Give Away Money for No Reason
It’s one thing to give to the less fortunate and a wholly different to throw away your money for no reason. That’s why you’ll have to practice how to say no to people asking you for loans. That neighbor who wants to buy a new car might not be that close friend, so why would you loan them money? Let’s not even mention that most people won’t even pay those loans back. That’s why it’s crucial to choose and help financially only those people who deserved it.
What Do the Experts Say?
Is there anyone better to consult you on how to manage your jackpot win than those who have millions and financial experts? Those are people who know how to handle money, which is why you should listen to their words. Here are their crucial tips!
“It’s Not an Endless Pool of Money” – Suze Orman
Suze Orman is the author of the famous podcast Women & Money, and the writer of the book of the same name. She is famous as an expert on personal finances, and she admits that finding the right investments for millions of dollars is a tricky business.
Orman advises taking the lump sum, but only if you have the guts to manage it without feeling guilty.
“You might have friends or family that make you feel personal guilt that you have so much wealth, and they don’t. If that’s an option, it might be better to choose installments.”
She also warns you shouldn’t go with a lump payment if you don’t feel experienced with money or life in general. The long-term option gives you an option to prevent yourself from spending all the winnings quickly.
“It’s incorrect that you’ll have an endless pool of money. You might run out of it, so if you don’t understand how the market or finances work – go for the annuity option,” says Orman.
“Play It Safely” – Kevin O’Leary
O’Leary is a famous Canadian investor who had both ups and downs in his career. He’s most famous as a participant of the business reality show Shark Tank, which is a huge hit in the United States. O’Leary recommends a different approach.
“You want to take the lump sum, but don’t waste it right away. Instead, make a deal with yourself for a yearly annuity. Use everything that remains for investments and utilize the money to increase your wealth.”
The investor says you should play it safe.
“You have the money that affords you to play it safe. It’s crucial not to waste that chance,” warns O’Leary.
“Beware of Taxes” – Elizabeth Glasgow
Elizabeth is a law graduate who specializes in working with clients that have a high net worth. She warns about the potential taxes that could arise from gifting large sums of money to family members.
“Any gift over $11.4 million is subject to 1% taxes. That means you could end up spending a hefty tax sum on a gift to your mom or sibling,” warns Glasgow.
As for the payment option, she says the crucial thing is to trust yourself.
“Can you manage so much wealth at once? Is it a better option to take a long-term payment and manage your affairs that way? You get a certain amount of financial freedom either way, which is why don’t want to spend the money too generously or quickly,” says this financial expert.
“Take Things Slow” – Farnoosh Torabi
Torabi is another podcast author, and her creation is the famous “So Money” program that shows insights on personal finances. According to Torabi, it’s crucial not to make rash decisions.
“The adrenaline will be at its highest during the first weeks or months. If your family and friends know about the win, they’ll probably offer their advice, which is not necessarily a good thing. That’s why it’s crucial to let some time pass to determine what’s truly the best thing to do with the money,” says Torabi.
It’s vital to note that your goal should be to utilize the full potential of your money. According to Torabi, that includes discussing things with your close ones, but also sitting down and thinking about what you want yourself.
“The main goal should be creating a life that will be more fulfilling and impactful. Finally, make sure those winnings last,” says Torabi.
He agrees that you shouldn’t reveal you won the lottery immediately.
“If you keep things as private as possible, it will ensure you have time to come up with the best possible plan and gather the right team of advisors.”
“Enjoy Your Life” – Mark Cuban
The famous Dallas Mavericks owner earned a huge wealth with his smart investments. However, Cuban suggests you aren’t a wise investor just by winning the lottery.
“That’s why I’d advise against making investments. Go for the annuity option and enjoy getting your paycheck every year. You can live comfortably until the end of your life,” says Cuban.
According to the businessman, it’s a simple method that provides peace of mind.
“If you invest and make risky moves, you could lose all your money,” warns Cuban indicating that you shouldn’t push your luck.
FAQ About What to Do If You Win the Lottery?
How much time do you have to claim a lotto jackpot?
The time for claiming your prize depends on the lottery and the location. For example, various US jurisdictions might have different deadlines for the same lotto game. You can learn more in our article on how long it takes to get the money after winning the lottery.
Is it better to play online or offline?
The decision is up to you, but playing the lotto online has many benefits. You can play a wide range of worldwide lotteries on platforms like The Lotter, and tickets are available for purchase around the clock.
What’s the largest jackpot ever won on a lottery game?
The largest jackpot ever won occurred on Powerball in January 2016. Three winners split the prize of $1.58 billion. As for the largest single win, a lucky winner took home $1.53 billion after winning the jackpot in MegaMillions in 2018. Our article on the biggest lottery wins mentions the highest rewards in different lotto games around the world.
Final Thoughts – Try to Maintain a Healthy Mind and Body
Winning the lottery is a big thing, and big prizes will undoubtedly change your life. It’s up to you to ensure they adjust your life for the better. The experts advise trying your best to maintain a healthy mind and body. You can consider exercises and other physical activities, but also avoiding smoking, drinking, and other vices.
There’s plenty of time to decide how you’ll spend your money. That’s why it’s crucial to show patience and come up with the right strategy. You should listen to other people’s advice, but you don’t have to apply it. However, keep in mind that professional lawyers, financial advisors, and other specialists could help you to design the right plan for managing your new wealth.
What to Do Next?
So now that you know what to do after you win the lottery, it’s time to try and win it!