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Winning a life-changing amount in the lottery, whether it’s six figures on a scratch ticket or megamillions in the Powerball drawing, could give you the financial freedom you desire. Pay all your bills. Create a children’s fund for the university. Have plenty of money for travel or retirement.

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But winning the lottery comes with a long list of do’s – and don’ts – in the days, months and years after cashing in that ticket. GOBankingRates asked financial experts about what to do after winning the lottery.

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What to do when you win the lottery

keep quiet

You’ll want to share your good fortune with the world, but it’s not advisable, said Evan Shear, certified financial planner at CrossleyShear Wealth Management in Florida. Don’t even tell your family and friends until you put some things in order, he said.

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“The best thing to do is not to do anything immediately,” he said. “Ask a lawyer, CFP and CPA before claiming any winnings and be sure to build a team of players who can and will work together on your behalf.”

Experts also said that if your state allows you to accept your lottery winnings anonymously, do so. And make sure you don’t post your bargain on social media.

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“Don’t post it on Facebook/Instagram/blog,” said Herman “Tommy” Thompson Jr., certified financial planner at Innovative Financial Group in Atlanta. “Scammers will find you on their own. There’s no reason to make it easy by self-identifying with a personal contact list, photo ID, and those “about me” quizzes that provide possible answers to your security questions. . »

Create a plan

Once your team is assembled, work together to chart a course for your gains.

“Set your goals and write a plan. Once you understand the tax implications, figure out what you want to accomplish in the short, medium and long term,” said Emily Irwin, senior advisory director at Wells Fargo Wealth and Investment Management.

She said the plan could start with paying off debt or buying a home in the short term, then fund goals such as supporting the family or buying a longer-term second home.

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This plan may also include financial instruments that you may never have heard of, such as a structured settlement.

Anyone who has bought a lotto ticket has dreamed of a six-figure bank account balance. When you start hitting that amount of winnings, you should consider structured payouts for a portion of the jackpot,” said Doug “Buddy” Amis, a CFP who is president and CEO of Cardinal Retirement Planning in North Carolina. .

“Choosing a structured settlement or annuity payout for lotto winnings can provide ongoing income…and an attractive interest rate. It’s not just about saving for a rainy day. It’s paying for your future self.

Invest traditionally

You may want to invest your newfound wealth in non-traditional ways, but one expert says it’s best to stick with familiar investments.

“Don’t be greedy. You don’t need to explore arcane tax schemes or gamble on crypto,” said Naoshad Pochkhanawala, estate and financial planner and licensed life underwriter at Amiko Benefits Inc. in Toronto.

“Don’t be arrogant. Neither you nor the best advisors know the future. Use between 10% (and) 30% of your earnings to purchase a life annuity and back-to-back life insurance. This way, no matter what, you have an income for life and leave something behind.

He also said lottery winners should draw up an estate plan if they don’t have one and also redo existing wills.

Living on a budget

Do people with a lottery ticket worth a few million dollars still have to stick to a budget? Yes, said Lyle Solomon, senior counsel for Oak View Law Group.

“Even your lottery winnings have a ceiling, even if you think the possibilities are endless,” he said. “Even if your budget capacity has increased, it’s still a good idea to manage your finances rather than making imprudent purchases.

“Because they didn’t have a budget, many lottery winners in the past were caught wasting everything they won. Stop letting this happen to you. Set a budget right away and learn how to manage your money.

Create a donation strategy

“Giving back is a fantastic strategy for reducing taxes on your earnings,” Solomon said. “An accountant can provide hypothetical situations showing how much money you could save on taxes by donating to an approved charity.

“You can share the love and help others with your good fortune besides saving money at tax time.”

At the same time, Thompson said, you should create a budget to help your family and friends meet future financial needs.

“Win the lottery and you’ll find out about all of your extended family’s financial struggles,” he said. “Just as you set aside funds for tax-deductible charitable donations, create a budget for each bad luck story you want to help. By managing different “compartments” you will always be able to achieve your personal goals while sharing the wealth.

What not to do when you win the lottery

Start spending right away

As tempted as you may be to spend some of your newfound wealth, wait until all the items on the “to do” list are complete.

“Don’t make any immediate purchases or lifestyle changes,” Shear said. “Ultimately, work with your team to develop a short-, medium-, and long-term wealth management plan for preservation, growth, income, philanthropy, and transfer.”

Neglecting retirement savings

“Put a portion of your earnings into a tax-efficient retirement fund,” Solomon said. “Open a classic Individual Retirement Account (IRA) with a low-cost robo-advisor or self-directed online financial analyst, if you don’t already have one.

“If you have an annuity plan, make as high an annual contribution as possible. A large lottery prize will likely prevent you from contributing to a Roth IRA since IRS regulations limit donations for high-income earners.


It might be tempting to take your winnings to Las Vegas — you earned them gambling, after all — but that’s not a good idea, Pochkhanawala said. Don’t start living the high roller life.

“If you visit a casino, stick to 25-cent slots and $1 and $2 poker,” he said. “Might as well play the minimums.”

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About the Author

Jami Farkas holds a degree in communications from California State University, Fullerton, and has worked as a reporter or editor for daily newspapers across the United States. She brings to GOBankingRates her experience as a sports writer, business writer, religious writer, digital writer – and more. Passionate about real estate, she passed the real estate licensing exam in her state and is still debating whether to get into home selling – or just writing about home selling.