Mega Millions jackpot soars to $850 million. How to handle a windfall

Angela Weiss | AFP | Getty Images Yet again, the Mega Millions jackpot has catapulted higher. The top prize is now a staggering ...


Angela Weiss | AFP | Getty Images

Yet again, the Mega Millions jackpot has catapulted higher.

The top prize is now a staggering $850 million — the third-largest in lottery history — following no ticket matching all numbers drawn Friday night. Then there’s Powerball: Its jackpot is an estimated $640 million for Saturday night’s drawing. 

Of course, the odds of winning either game aren’t in your favor: The chance of a single ticket matching all six numbers is 1 in 302 million for Mega Millions and 1 in 292 million for Powerball.

Nevertheless, it’s still worth considering how you’d handle such a windfall if you were to beat the odds.

Jackpot winners usually get six months to a year to claim their prize, depending on the state where it was purchased. This generally means that rushing to lottery headquarters isn’t necessary.

In other words, winners should take a deep breath.

Big money equals big emotions

Whoever ends up hitting either jackpot should be prepared for a rollercoaster of emotions.

Experts say that once the initial excitement of winning the jackpot wears off, the magnitude of their windfall can settle in.

“For anyone experiencing newly created wealth … there are feelings of dislocation and a sense of being overwhelmed,” said Valerie Galinskaya, a managing director and head of the Merrill Center for Family Wealth.

Of course, you don’t have to go it alone.

Given the sheer size of these jackpots, winners should assemble a team of experienced professionals — including an attorney, CPA and financial advisor — to help them navigate the windfall. 

“You want to hire the right advisors who can provide not just good advice, but advice that’s tailored to your needs and wants,” Galinskaya said.

Protect your ticket and identity

Prepare for the tax bill

For the $850 million Mega Millions jackpot, the cash option — which most winners choose instead of an annuity — is $628.2 million.

Before that gets to you, however, 24% — or $150.8 million — will be withheld for federal taxes. You also could count on owing a lot more to Uncle Sam due to the highest marginal rate of 37% applying to income above $523,600 for individual tax filers and $628,300 for married couples filing jointly. State taxes also are typically due.

For Powerball’s $640 million jackpot, the lump sum option is $478.7 million. The 24% withholding would be about $114.9 million. And, again, more would be due. 

Think philanthropically

One way to reduce your tax bill is to think charitably. Basically, the government gives you a tax break if you use private money to do public good.

“It’s not only about what you want to do for yourself and your family, but also philanthropically,” Galinskaya said.

You can contribute cash, up to 60% of your adjusted gross income, to a public charity or a donor-advised fund and get a tax deduction for the amount in the year you make the donation. You also could create a private foundation, donate income to it and then determine over time how to employ it.

Source link

COMMENTS

Name

Africa,743,Americas,3954,Art & Culture,14307,Arts,6348,Arts & Design,1539,Asia,3130,Automobile,426,Baseball,518,Basketball,414,Books,3740,Business,5183,Celebrity,2606,Cricket,621,Crime,134,Cryptocurrency,1405,Dance,600,Defense,812,Diplomatic Relations,2468,Economy,1024,Editorial,260,Education,1129,Elections,302,Energy & Environment,3002,Entertainment,22188,Environment,3482,Europe,4077,Faith & Religion,218,Family & Life,789,Fashion & Style,3102,Finance,19121,Food & Drink,3593,Football,1040,Games,86,Gossip,10260,Health & Fitness,3934,Health Care,885,Hockey,192,Home & Garden,897,Humour,966,Latin America,49,Lifestyle,16356,Media,505,Middle East,1414,Movies,1595,Music,2502,Opinion,2758,Other,11352,Other Sports,4884,Political News,11267,Political Protests,2297,Politics,17374,Real Estate,1703,Relationship,64,Retail,3085,Science,2489,Science & Tech,9545,Soccer,173,Space & Cosmos,289,Sports,11543,Technology,3285,Tennis,517,Theater,1576,Transportation,290,Travel,2455,TV,3545,US Sports,1451,Video News,3531,War & Conflict,1042,Weird News,968,World,15685,
ltr
item
Newsrust: Mega Millions jackpot soars to $850 million. How to handle a windfall
Mega Millions jackpot soars to $850 million. How to handle a windfall
https://image.cnbcfm.com/api/v1/image/105518107-1539965530046gettyimages-1052526658.jpeg?v=1608562443
Newsrust
https://www.newsrust.com/2021/01/mega-millions-jackpot-soars-to-850.html
https://www.newsrust.com/
https://www.newsrust.com/
https://www.newsrust.com/2021/01/mega-millions-jackpot-soars-to-850.html
true
732247599994189300
UTF-8
Loaded All Posts Not found any posts VIEW ALL Readmore Reply Cancel reply Delete By Home PAGES POSTS View All RECOMMENDED FOR YOU LABEL ARCHIVE SEARCH ALL POSTS Not found any post match with your request Back Home Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sun Mon Tue Wed Thu Fri Sat January February March April May June July August September October November December Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec just now 1 minute ago $$1$$ minutes ago 1 hour ago $$1$$ hours ago Yesterday $$1$$ days ago $$1$$ weeks ago more than 5 weeks ago Followers Follow THIS PREMIUM CONTENT IS LOCKED STEP 1: Share to a social network STEP 2: Click the link on your social network Copy All Code Select All Code All codes were copied to your clipboard Can not copy the codes / texts, please press [CTRL]+[C] (or CMD+C with Mac) to copy Table of Content