What To Do If You Win The Lottery: 8 Tips To Help You Stay Rich


After winning the lottery, it’s important to take the proper steps to ensure your newfound wealth is safeguarded and managed well. Start by seeking advice from a financial adviser who can recommend the best way to invest, save, and protect your money. It’s also important to create a budget and monitor your spending. By living below your means and making wise money decisions, you could make your lottery winnings last for a lifetime and even more.

Ever dreamt of winning the lottery? It sounds like a wonderful fantasy, but what would you do if that dream actually came true and you were suddenly holding the winning ticket in your hands? How do you safeguard your newfound wealth and ensure you’re making smart decisions when investing your winnings?

In this article, we’ll explore some important steps for managing your windfall so that you can maintain your wealth and pass it on to future generations.

8 things you should do after winning the lottery

Congratulations on winning the lottery! It’s an exciting and life-changing event, but it’s important to handle it responsibly and carefully. Here are some of the first steps you should take if you hit the jackpot.

1. Stay calm and don’t make any rash decisions

Winning the lottery is a huge shock, and it’s easy to get overwhelmed with excitement right after hearing your number called from a lottery drawing. Before you start making impulsive decisions, take some time to let the news sink in. Make sure you think about your options before splurging all your prize money on luxury clothing or sports cars.

2. Sign the back of your lottery ticket

Signing the back of your lottery ticket makes it easier to prove ownership in case of any discrepancies or disputes. Plus, it’ll protect you in case someone else tries to claim your winnings.

3. Consult with a financial advisor

After hitting the lottery, it may be tempting to go on a shopping spree and buy the things you’ve always desired. While there’s nothing wrong with treating yourself, it’s crucial to have a solid financial plan in place so that your lottery money doesn’t get squandered away.

If you need help, legal and financial advisers can provide invaluable guidance on how to manage your newfound wealth, helping you make decisions such as setting up an emergency fund and investing for retirement. To get started, reach out to one of the investment advisors below.

4. Consider setting up a trust

A trust is a fiduciary arrangement between a trustor and trustee that allows the trustor to set aside assets for the benefit of another person, such as children, grandchildren, or other beneficiaries.

Setting up a trust can help you manage your winnings and protect your privacy. It can also make it easier to pass on your wealth to your loved ones.

5. Don’t quit your job (at least not yet)

It could be tempting to quit your job after becoming a lottery winner, but it’s a good idea to wait until you have a solid long-term financial plan in place. Plus, continuing to work can give you a sense of purpose and structure in life.

6. Be mindful of taxes

Winning the lottery sounds like a dream come true, but it’s important to bear in mind that lottery winnings come with a hefty tax burden. Lottery winners are subjected to state and federal taxes, and depending on how much you win, your federal tax liability could be as high as 37%.

As of 2023, for jackpots of more than $578,1250, this translates to over $190,000 in federal taxes. Be aware that this number could go even higher depending on the amount won.

7. Remain anonymous

Of course, you’re not obligated to stay anonymous after receiving the winning lottery ticket, but it’s a good idea to do so — especially with all that money in your bank account. By keeping your news private, you can avoid attracting unwanted attention from anyone trying to take advantage of your winnings.

IMPORTANT! Though many people dream of winning the lottery, this win can quickly become a nightmare if people know you’ve won. Fortunately, states like Kansas, Delaware, and South Carolina, have laws to protect your identity as a lottery winner. If you live close to one of these states, you may want to purchase your lottery ticket there to help keep your identity hidden.

8. Annuity or lump sum

After winning the lottery, one of the most important decisions is whether to take the money all at once in a lump sum or receive annuities. Though it might be tempting to take the lump sum up front, an annuity could provide long-term financial security with its structured payments over a set amount of time.

Before making a decision, consider all ramifications and consult a qualified financial professional.

Ways to invest your lottery winnings

Of course, what you do with your money is ultimately your choice, but investing wisely can make your winnings last even longer.

  1. Starting your own business. Many lottery winners use their newfound funds to start business ventures — either by purchasing an existing business or launching something entirely new from scratch. By taking this route, you could leverage your winnings and create a steady income stream without needing additional funding from outside sources like angel investors or venture capitalists.
  2. Invest in real estate. Investing your lottery winnings in real estate can be a great way to secure and grow your wealth. With real estate, you’re investing in a tangible asset with the potential to appreciate and generate earn rental income. Plus, real estate investing offers tax advantages and diversification of assets since it’s not directly tied to stock market fluctuations.
  3. Invest in retirement accounts. Investing a portion of your winnings in retirement accounts such as 401(k)s and Roth IRAs is one of the smartest decisions you can make. Not only do these accounts provide tax benefits that help you keep more of your money, but they also offer long-term growth potential so you can enjoy financial security in your golden years.
  4. Invest in stocks and bonds. Opening a brokerage account to invest in stocks and bonds can be a great way to diversify your assets and grow your wealth. With the right combination of stocks and bonds, you can generate consistent income while getting exposure to different markets. However, make sure to consider your risk tolerance level and how much money you are willing to commit before taking the plunge.

If you’re not sure how to start investing in the stock market, or what your risk tolerance level is, talk with one of the brokerages below before choosing an investment vehicle.

How to manage your money as a lottery winner

Here’s a good example of how to manage your prize money after getting that winning ticket:

After winning $20 million in the lottery, Jane Doe sought out the advice of financial professionals and developed a long-term plan for her winnings. She paid off her debts and made sure to set aside money for taxes.

After setting some money aside, Jane also invested a portion of her winnings in a diversified portfolio of stocks and bonds. She lived modestly, continuing to work part-time and only making a few small purchases, such as a new car and a vacation home. Ten years later, Jane’s financial situation is stable, and she has been able to live comfortably off her investment interest while not touching the majority of her winnings.

How NOT to manage your money as a lottery winner

On the other hand, here is a bad example of someone who won a large amount of money in the lottery and managed it poorly:

After winning $20 million in the lottery, John Doe made a series of impulsive and irresponsible decisions. He quit his job and spent lavishly on expensive cars, vacations, and gifts for friends and family. He also made a number of poor investments and ended up losing much of his winnings.

Within a few years, John was deep in debt and struggling financially. He ended up having to declare bankruptcy and starting over from scratch.

Pro Tip

Without a budget, you could quickly find yourself back where you started before winning the lottery. Use a budgeting app like Mint or Personal Capital to track your spending and ensure you’re not overextending yourself financially.


Do you have to pay the IRS if you win the lottery?

Yes, lottery winnings are subject to both state and federal taxes. The specific tax obligations will depend on the amount of the winnings, state laws, and your personal tax situation. It’s important to consult with a tax professional to understand your tax obligations and plan accordingly.

How long does it take to get the money when you win the lottery?

The amount of time it takes to receive your lottery winnings will depend on the specific rules of the lottery and the claim process in your state. It’s important to follow the proper procedures and claim your winnings as soon as possible to ensure that you receive your money in a timely manner.

Should I tell anyone I won the lottery?

It’s up to you whether or not to tell anyone that you won the lottery. If you want to keep your winnings private, you may want to consider setting up a trust and consulting with a financial advisor to help you manage your money and protect your privacy.

Key Takeaways

  • Winning the lottery is an exciting and life-changing event, but it’s important to handle it responsibly.
  • Consult one or more financial advisors for guidance on how to manage and invest your winnings.
  • Be mindful of taxes, as they can add up quickly depending on how much you win.
  • Living below your means, creating budgets, and monitoring your spending are all good ways to ensure your lottery winnings last as long as possible.
  • Remaining anonymous could help protect you from unwanted attention and people who wish to take advantage of your newly acquired fortune.
View Article Sources
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