You’ve probably dreamed about what you would do if you won the lottery: A new luxury home, world-class vacations and closing all your debt. But when the winning numbers do come up and you have full access to your millions, the real challenges can start to reveal themselves. Whether you choose to take the lump sum or go for an annuity paid out over decades, you have to make many big decisions quickly — and those choices can impact your life.
A top priority for lotto winners, and anyone who comes into sudden wealth, is assembling a team of financial experts to manage the money. Most experts agree that you’ll want an accountant, a lawyer and a financial advisor.
While many people who win the lottery fantasize about quitting their jobs, most do not, according to the Kentucky Lottery. In fact, the majority of people who won large jackpots work for a living, including cashiers, bartenders and construction workers. The average annual salary for a lottery winner is $31,500.
Many lottery winners choose to take a lump sum, which gives them full access to their prize right away. But if you take the lump sum, it will be taxed at a much higher rate than if you chose to receive annuity payments over decades.
A common myth is that money can buy happiness, but the truth is that only 3% of lottery winners say they are happier than before their wins. In fact, more than 1% file for bankruptcy after winning the lottery.