In February 2015 in North Carolina, a mother of 4 children was one of three winners of a massive Powerball jackpot – totalling $564 million. The probability of that taking place was around 1 in 175 Million.
So how does the lottery work and what do you have to do to win? In the U.S., 44 states have lotteries, plus the District of Columbia, Puerto Rico and the U.S. Virgin Islands. The other U.S. states exclude themselves for quite a lot of motives, like religious objections or, in Nevada’s case, the fact that they already have other gambling businesses.
Lotteries are mostly executive-run, and state officials use part of the proceeds closer to funding matters like education. Across the country, lottery earnings totalled 70 billion U.S. Dollars for the 12 months 2014. One can only imagine how much the earnings would be today. One would assume it to be way more than that.
What Happens To Lottery Winnings
So what happens if you’re lucky enough to win a big lottery jackpot? After signing your ticket, it’s a good idea to get a picture and video of yourself with the winning ticket. I’m not sure why that is. One of the many reasons I prefer to buy my lottery tickets online.
You may have to wait up to a year to claim your prize. It all depends on the lottery and the state running the lottery.
Before you declare the prize, you have to decide on whether to take the annuity prize or the lump sum? You also need to decide if you want to remain anonymous. Depending on the state, you may not have that option.
When winning a significant sum of money, it’s probably a good idea to hire an attorney and a licensed financial planner.
If I were to win big in an American Lottery, I would take the annuity rather than the lump sum. I’ve heard many stories of people blowing the whole lot when talking the lump sum. Better to have a guaranteed income over many years rather than taking the chance of losing it all because of not being able to manage your sudden riches.
Also, taking the lump some results in you losing a whole chunk of it in taxes. Taxes hit lotto-winners hard. The IRS alone can do away with as much as forty per cent of the prize money. Depending on your home state, you may face a further state tax! For example, if you happen to live in New York, you would be paying the highest state taxes on lotto winnings at around 13%.
Taxes or no taxes if you’re lucky enough to win the lottery, make sure that you don’t lose it all through bad decisions.
Best Online Lottery Sites
- GiantLottos.com: These guys have been around since 2005 and so you know you can rely on them. I’ve written a post that explains all the benefits of becoming a GiantLottos member. Heck, you can even purchase a ticket from that post without having to leave the site.
- theLotter.com: I’m so happy to have found this one as it is indeed one of the best online lottery sites that I have seen, offering it’s customers the chance to buy lottery tickets for the best lottery outlets from around the globe. Read My Review.
- PLAYHUGELOTTOS.COM: I wrote a post about these guys called Introducing PLAYHUGELOTTOS.COM! It highlights some interesting reasons why you should join them, the best one being they give a bonus to new members!
- Michigan Lottery: The official lottery for all Michigan residents. Read my introductory post.
- Lotto Agent: Fairly new in the online lottery agents game but looks very promising. Has a promotion for new members where you buy 1 ticket, get 1 ticket absolutely free!
- Wintrillions: I use these guys because of their syndicate feature. Read my review Wintrillions.
- The Health Lottery: If you love to play the lottery and other games that support charities these are the guys for you. Read all about them HERE.