How to Manage Your Lottery Jackpot

lottery jackpot

Cynthia P. Stafford, a single mother of five, raised her five children after her brother was killed by a drunk driver and helped her father make ends meet. During a time when many people couldn’t afford to live in a home, Stafford sat in her tiny house, daydreaming of winning the $112 million lottery jackpot. She had never won a lottery before, but she kept her focus on it. Eventually, she won it.

While lottery winners are allowed to collect the full jackpot in one lump sum, it’s best to spread out the payments over a period of time. Unlike lump-sum payments, annuity payments can reduce tax burden in the future. In addition to that, you can invest the money to increase its value in the future. You can also choose an annuity, which provides guaranteed income for up to 29 years. These annuities are great for people with bad money habits. The last payment should be the largest.

Many people wonder how to manage the lump sum amount they’ll receive from their lottery jackpot. While the advertised jackpot amount may be the maximum amount you’ll ever receive, the current cash value of a lottery jackpot varies considerably. Generally, you can expect to receive about half of the amount that’s advertised in the lottery’s advertisement. Use an online lottery payout calculator to see how your winnings would look after federal, state, and annuity taxes are taken out.