Have you picked up a Mega Millions ticket or received one as a holiday gift? With a staggering $1.15 billion jackpot up for grabs, it’s a thrilling thought that you might be the lucky winner, despite the slim odds of about 1 in 302.6 million. But there’s no harm in being prepared, just in case.
Should someone hit the jackpot, it would rank as the fifth-largest in the history of Mega Millions. The winner would have the option to take a lump-sum payment, which after taxes, is estimated to be around $516.1 million. Wondering how to even start preparing for such a massive influx of money?
Rob Burnette, a financial advisor from Ohio at Outlook Financial Center advises, “If you win the lottery, the first step is to keep it under wraps. Get your affairs in order and start planning. If possible, try to stay anonymous.”
Who Should Know About My Mega Millions Jackpot?
The moment you realize you could be a multimillionaire, it’s crucial to contact financial experts immediately. This early move can prevent scammers from targeting you before you have a chance to secure your winnings.
“Fraudsters often lure you into sending money for ‘taxes’ or ‘fees,’ or they might ask for your bank details to supposedly transfer your winnings but end up draining your account,” warns Mega Millions. “Remember, a legitimate lottery will never ask winners to pay money to receive their prize.”
Be cautious about any unexpected calls, texts, or emails claiming you’ve won a prize. In some states, winners have the option to remain anonymous.
Steve Azoury, who runs Azoury Financial in Troy, Michigan, and has advised numerous lottery winners including one who won $181 million, emphasizes the importance of privacy: “The winner told me, ‘If I didn’t know you before, I don’t want to know you now.’”
“Immediately find a good tax attorney, a reliable accountant, and a trustworthy financial advisor,” Azoury advises. “They will collaborate to craft a solid financial strategy for you.”
This “strategy” will sort out critical decisions such as choosing between a lump-sum payout and an annuity.
The options are as follows:
- An annuity option starts with an initial payment followed by 29 yearly installments, each increasing by 5% from the previous year.
- The cash option is a single, lump-sum amount that equals the total cash in the jackpot’s prize pool, which for the upcoming draw is $413.5 million.
Your choice between these options will depend on various factors like your age, financial goals, and the rules pertaining to lottery winnings and beneficiaries.
“Your financial team can also help by setting up a ‘financial gatekeeper’—someone who helps manage requests for money and investments by stating all assets are tied up,” Azoury added.
What’s the Best Use of My Mega Millions Winnings?
Ultimately, only you and your financial advisors can determine the safest and most effective way to manage your newfound wealth.
Many winners take their time to claim their prize, using the interval to develop a personalized financial plan. The time allowed to claim winnings varies by state from 90 days to a year from the draw date.
“Winning tickets must be redeemed in the state they were purchased, although many lotteries offer a mail-in option for claiming prizes,” says Mega Millions.
It’s advisable to temporarily place your winnings in a secure location while you assemble a team of trusted financial, legal, and tax professionals.
“One option is depositing your winnings into a brokerage account where they can be insured and spread out among multiple banks,” suggests Azoury. “Up to $4 million can be insured in a single account, and up to $8 million in a joint account.”
How Much of My Mega Millions Winnings Will I Keep, and When Will I Receive It?
The exact amount you will take home varies by state due to different lottery regulations and tax laws. While you’ll likely enter the highest federal tax bracket, the state where you bought the ticket and your state of residence will influence your tax responsibilities.
“A skilled tax professional can be invaluable, especially when navigating complex state tax laws,” notes Mark Steber, chief tax officer at Jackson Hewitt.
Certain states like California, along with others such as Florida and Texas, do not tax lottery winnings, potentially simplifying the process.
When is the Next Mega Millions Draw, and How Can I Participate?
The upcoming Mega Millions draw, where the $1.15 billion jackpot will be at stake, is scheduled for Friday, Dec. 27 at 11 p.m. ET. The lottery holds its draws twice weekly, on Tuesdays and Fridays, with ticket sales closing 15 minutes before each draw.
To win the jackpot, you need to match all six numbers selected. You can choose your numbers or opt for a “Quick Pick,” where the numbers are randomly generated. Additionally, you can enhance non-jackpot prizes by adding the “Megaplier” feature for an extra dollar per play.
Where Can I Purchase Lottery Tickets?
Lottery tickets are widely available at various retail locations including convenience stores, gas stations, and grocery stores. In some states, you can also purchase tickets online. Even some airport terminals offer lottery tickets.
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Passionate about analyzing economic markets, Alice M. Carter joined THE NORTHERN FORUM with a mission: to make financial concepts accessible to everyone. With over 10 years of experience in economic journalism, she specializes in global economic trends and US financial policies. She firmly believes that a better understanding of the economy is the key to a more informed future.
