If You Win the Mega Millions, Do These 2 Things Without Fail
Written by
Ashley Donohoe
Edited by
Daria Uhlig
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If you dream of instant wealth, you might try your luck at the $977 million Mega Millions jackpot to be drawn this Friday, March 22. While the chances of getting the grand prize are approximately 1 in 303 million, you’ll need a plan in place if you end up the lucky winner.
In addition to storing your winning ticket in a safe place, here are two steps you must not fail to take.
Resist Sharing the Good News
The excitement might compel you to want to tell everybody you know about your windfall, but this is a bad idea for several reasons. First, you might have to deal with the awkwardness of people asking for some of your winnings. But worse, you could make yourself a target for scammers out to destroy you financially and robbers who could even physically harm you.
To stay safer, only share the news with people in your household. Don’t post your win on social media, talk to the press or brag about it to your friends. If you do decide to tell additional people, consider the potential financial, safety and relationship risks.
You should also check whether you live within the minority of states that allow anonymity for lottery winners. Some examples include Ohio, Montana, Texas, Missouri, Virginia and New Jersey. Just be aware that states can have certain conditions for qualifying for anonymity.
Carefully Decide Your Payout Option
Winning the Mega Million jackpot creates the need for major financial planning, and you should not attempt this alone. You’re going to want both a tax professional and financial advisor who can walk you through the implications of your two payout options: taking the lump sum or choosing an annuity.
Getting millions at once can seem great, especially if you want to pay off your debt and make major investments. But you should consider that you’ll receive a significantly smaller cash amount than the stated jackpot. The Mega Millions website notes a lump-sum amount of $461 million for the $977 million jackpot drawing. Plus, don’t forget to account for the major tax hit, including up to 37% in federal income taxes along with any state taxes.
If you’re concerned about uncontrolled spending or prefer an annual income stream, you might choose the annuity, which provides 30 years of annual payments that ultimately total the jackpot amount. The first one would come immediately and be around $14.7 million based on a $977 jackpot. Future payments grow by 5%. Although federal and state taxes still apply, they’re spread out with the payments, though there’s a risk of tax rate increases.
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