Experts: What To Do With Your Money if You Win the Lottery

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

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But winning the lottery comes with a large list of things to do — and not to do — in the days, months and years after you cash in that ticket. GOBankingRates asked financial experts about the actions to take after winning the lottery.

What To Do When You Win the Lottery

Stay Silent

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

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“The best thing to do is to do nothing immediately,” he said. “Interview an attorney, CFP and CPA before claiming winnings and make sure you assemble a team of players that 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 be sure not to post about your windfall on social media.

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“Do not post it on Facebook/Instagram/blog,” said Herman “Tommy” Thompson Jr., a certified financial planner with Innovative Financial Group in Atlanta. “The scammers will find you on their own. There is no reason to make it easy by self-identifying along with a list of personal contacts, photo identification and those ‘about me’ quizzes that provide the possible answers to your security questions.”

Create a Plan

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

“Set your goals and write out a plan. Once you understand tax implications, figure out what you want to accomplish short term, mid and long term,” said Emily Irwin, the senior director of advice 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 and then funding goals such as supporting family or purchasing a second home in the longer term.

That plan also can include financial instruments you might never even 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 to get into that size of winnings, you should consider the structured payments for some of the jackpot,” said Doug “Buddy” Amis, a CFP who is the president and CEO of Cardinal Retirement Planning in North Carolina.

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

Invest Traditionally

You might want to invest your newfound wealth in a non-traditional way, but one expert said you’re better off sticking to known investments.

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

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

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

Live on a Budget

Do people with a lottery ticket worth a few million dollars still need to follow a budget? Yes, said Lyle Solomon, principal attorney of Oak View Law Group.

“Even your lottery wins have a cap, even though you may believe the possibilities are endless,” he said. “Even though your budget’s capacity has risen, it’s still a good idea to manage your finances rather than making careless purchases.

“Because they didn’t have a budget, many lottery winners in the past were caught squandering everything they won. Stop allowing it to happen to you. Create a budget right away and learn to manage your money.”

Create a Giving Strategy

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

“You may share love and assist others with your good fortune in addition to saving yourself money at tax time.”

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

“Win the lottery and you will find out about every financial difficulty your extended family has,” he said. “Just as you set aside funds for tax-deductible charity giving, create a budget for every hard-luck story you’re going to want to help with. By managing different ‘buckets,’ you’ll still be able to accomplish your personal goals while sharing the wealth.”

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What Not To Do When You Win the Lottery

Start Spending Right Away

As tempted as you might be to spend a chunk of your newfound wealth, hold off until all of the items on the “to do” list are done.

“Do not make any immediate purchases or lifestyle changes,” Shear said. “Ultimately, work with your team to develop a short-term, mid-term and long-term wealth management plan of preservation, growth, income, philanthropy and transfer.”

Neglect Retirement Savings

“Put some of your gains into a tax-advantaged retirement fund,” Solomon said. “Open a classic individual retirement account (IRA) with a low-cost robo-advisor or a self-directed online financial analyst, if you don’t already have one.

“If you have an annuity plan, put up an annual contribution that is as high as is allowed. A sizable lottery prize will probably exclude you from contributing to a Roth IRA since IRS regulations limit donations for higher-income persons.”


It could be tempting to take your winnings to Las Vegas — you won it by gambling, after all — but that isn’t a great idea, Pochkhanawala said. Don’t start living the life of a high roller.

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

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This article originally appeared on Experts: What To Do With Your Money if You Win the Lottery