Here’s What to Do (and Not Do) If You Win the Lottery

By August 20, 2018 No Comments
What should you do if you win the lottery?

Have you ever caught yourself daydreaming about what to do after winning the lottery?

In my mind, the first step looks a little like this:

You’ve just won $759 million by playing the lottery – the record-breaking amount won by Powerball winner Mavis Wanczyk in 2017.

After choosing to cash out the lump sum and paying your taxes, your $360 million net worth (yes, you’re already down halfway from the original number!) is higher than the value of many countries.

Your name is about to be spread all over the internet and television. Your life is about to change forever, but you still have one “typical” obligation that needs to be addressed:

It’s time to quit your job.

You’ve quit your job before, but this time is different. You won’t be needed any more personal references on your resume, and besides, you have appointments with a financial planner and tax attorney later this afternoon.

It’s tempting to just completely forget about your employer altogether and let them figure it out when the news breaks, but out of respect to your manager and coworkers, you decide to make a phone call and give your notice – effectively immediately:

“Hey boss, I’ve had something come up and I need to resign from my position immediately.”

“This seems really abrupt. You’re an integral part of the team and we’re in the middle of a big project. Do we need to discuss your compensation?”

“My decision isn’t tied to my salary or benefits at all. I’ve found myself faced with some major unexpected life changes, and it’s best for both myself and the company if we part ways. Short for the short notice, and thanks for everything!”

After a few final niceties, you end the call and begin your early retirement.

Life after winning the lottery isn’t easy

Not only are the odds of winning the lottery infinitesimally small – especially for those hundred-million payouts – but lottery winners often find that the consequences are far from what they expected.

Sure, it’s a problem anybody would love to have, but the reality of winning the lottery isn’t quite as simple as the fantasy story written above.

While you may start out with a sudden windfall of generational wealth, the final outcome isn’t often rosy.

A quick look at past winners shows that the lottery money isn’t the end of life’s challenges (after all, many lottery winners go broke). Instead, you’ll find yourself with a new set of problems to solve.

The following set of tips – what you should (or should not) after winning the lottery – doesn’t include every financial or legal consideration, but it’s a helpful start if you feel like a big lottery win is in your future!

What to do if you win the lottery

Sign your ticket immediately. That small sheet of paper has become worth a LOT of money (and you thought your college diploma was expensive!). Imagine that you’re Nicholas Cage’s character in National Treasure. Your winning lottery ticket is the Declaration of Independence – don’t let it disappear for any reason!

Claim your winnings in time. Depending on the lottery rules and the regulations of your state, you likely have a fixed amount of time to present your winning lottery ticket and claim your prize. Researching the rules and understanding the deadlines are important for two reasons: (1) it gives you time to get your affairs in order, and (2) it prevents you from potentially missing out on the money altogether.

Get professional financial advice. You’ll need the guidance of at least two people: an attorney and a financial planner. This isn’t the time to rely on one of your distant relatives or old high school friends. Seek the best financial advice. You’ll need to not only pay your taxes on the winnings but find the best ways to manage that money for what will hopefully become generational wealth

Protect your assets. Eventually, the word is going to get out about your financial windfall. Suddenly you’ll have potential financial risks that you would have never anticipated. You could find yourself involved in a lawsuit on completely made-up grounds that could cost you millions in litigation. Protect your financial assets by establishing your estate and taking out proper insurance.

Keep a budget. If you thought that winning the lottery would mean you never had to worry about money, think again! Professional athletes, celebrities, and past lottery winners all provide examples about just how easy it can be to spend egregious sums of money. While you may no longer need to fret about buying your latte or avocado toast, you may still need to keep a budget (perhaps 3-4% of your new net worth) to make sure your lifestyle is sustainable for the future.

What NOT to do if you win the lottery

Don’t tell anybody. You’ll want to remain anonymous for as long as possible. Perhaps you’ve always wanted to be “rich and famous,” but this isn’t the time to put this theory to the test! Just like the deadlines to claim your winnings, the rules for staying anonymous also vary based on where you live. In the meantime, consider changing your phone number and deactivating your social media accounts.

Don’t forget your taxes. While you may feel like you’re on top of the world after winning the lottery, you’re still responsible for paying taxes on your winnings just like everybody else. If you thought you were paying a lot of taxes before, just you wait!

Don’t carry debt. Get rid of your debts – your mortgage, car payments, student loans, medical bills – immediately. While you may feel like your financial future is secure, there’s still no guarantee of what your future will hold. Eliminating your debt is always a good idea that your future self will thank you for.

Don’t do it alone. With this sudden influx of money, you’re going to constantly find yourself berated by requests: to help out family members and friends, to support non-profit organizations, or to invest in “once-in-a-lifetime” business opportunities. You may very well choose to use your wealth to support some of these causes. However, this doesn’t mean you should handle these requests on your own. Involve a trusted team of advisors that can help you evaluate the legitimacy or efficacy of these requests.

Don’t make immediate lifestyle changes. When you imagine your life after winning the lottery, you probably expect lots of changes: perhaps buying a new house and car, quitting your day job, and traveling around the world full-time. While these things might become an option, you don’t need need to make substantial lifestyle changes overnight. Reflect on your financial values, create a plan, and make gradual adjustments instead.

Is the lottery a good financial investment?


It’s not even a “bad investment” – playing the lottery simply isn’t an investment strategy or retirement plan at all.

It should be considered a financial splurge that’s nothing more than fun and entertainment.

Have your coworkers invited you to join them in creating a pool of money to buy Powerball tickets?

If you really want to play, a Powerball ticket costs just $2. Consider buying a couple tickets and pulling it from the discretionary income portion of your budget – but you should never be spending hundreds of dollars on lottery tickets or making them a frequent payday purchase.

It takes patience and discipline, but you can create your own fortune through traditional investing. Instead of playing the lottery:

  • Review your budget and expenses to make sure at least 15-20% of your paychecks are going toward long-term financial goals
  • Sign up for your employer’s 401k plan and contribute at least enough to get the full employer match (if offered)
  • If you’re already contributing the percentage needed to receive the full employer match, consider opening a Roth IRA
  • Develop valuable new skills and accept new responsibilities that will help you get a raise

Although these suggestions don’t sound quite as exciting as winning the lottery, there are a couple of big advantages: everybody can win with the strategies, and the odds are in your favor!


There you have it: a starting guide for what you should do if you win the lottery.

Though your chances are astronomically small, if you ever find yourself winning a substantial fortune through the lottery, be sure to seek out the guidance of professional financial advisors who have your best interests in mind.

And don’t forget this important fact:

Playing the lottery isn’t a substitute for retirement planning. In fact, it will essentially always be counter-productive to reaching your financial goals.

Don’t leave your financial future to luck. Live within your means and start investing a portion of your income each month. It may not happen overnight, but with consistency and time, you’ll become a millionaire eventually!

Have you ever bought a lottery ticket? Or won any money with a lottery ticket? What would you do win the winnings?

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