Not everyone enjoys his or her lottery winnings. Even if most of us can all agree that winning the big lottery spells COLD HARD CASH. If you win on a national lottery for instance, certain advantages and disadvantages will inevitably follow suit.
These may not be the last
It has been known that you have more chances of winning on National lottery than anywhere else. National lottery in the US is all about Mega Millions and Powerball where the jackpot prize at stake depends on the accumulated ticket sales. However, certain regions and states have their own particular lottery games as well.
So far, the biggest we had for Mega Millions is over $650 Million USD and more than $1.5 Billion annuity value for Powerball. These amounts of money are definitely life-changing.
The hot topic
What are the things you should expect to wait behind the door if ever you hit the big jackpot?
- Unwanted visitors
- Unwanted phone calls
- Federal Tax / IRS
The cons to consider
They say winning the big jackpot can be so expensive, which could be true. Therefore, it’s only necessary to hire a legal officer and an accountant to help you handle your lottery winnings. If you’re a US resident, then you have to report your winning. Even if you don’t feel like telling anyone, it will be known (inevitably). The disadvantage mostly falls under your tax bills.
- The lottery corporation deducts about 30% for the Federal taxes
- Another 10% goes to the State taxes
- Plus there will be more taxes coming your way
Here’s what you can do
Financial experts are keen on new strategies when it comes to these things. Now that you have an idea of giving at least 50% of your winnings to the American government, it’s never too late to plan ahead of time. This will help you reduce the amount of taxes in case you win the big lottery.
- Claiming on lump sum can be more expensive than installment
- Your tax status changes the moment you win the big jackpot
- Come up with investment strategies to help lessen your tax woes
- Avail fixed life-insurance trust or retirement account with Roth IRA
When your time has come
We bet many of you have always had this question up in your head; “Should I keep on playing the same set of numbers each week as it might finally hit the jackpot?” Probably you should.And if you play Powerball or Mega Millions almost regularly, planning your finances this early would be the smartest thing to do. Remember, winning the big lottery only happens just once in a lifetime.