It finally happened.
After three months of no Mega Millions jackpot winners, a single ticket sold in South Carolina beat the 1-in-302.6-million chance of matching all six numbers in Tuesday night's drawing.
The final jackpot amount came in at just under $1.54 billion, marking the largest amount in Mega Millions history and the second-largest lottery jackpot ever. Leading up to the drawing, lottery officials estimated that 75 percent of possible number combinations had been sold.
South Carolina lottery officials are encouraging the winner to sign the back of the ticket and put in in a safe place — and then take a deep breath.
And while all eyes might be on the Palmetto State for more information about the newest member of the one-percenters club, there's a pretty good chance that the world will never find out who won.
South Carolina is one of a handful of states that allow winners to receive their prize anonymously. For the person (or group of people) laying claim to the massive Mega Millions jackpot, that's good news.
Experts say the fewer people who know when you win big, the better. And that's the case even when you can claim anonymously.
"Obviously it may be impossible to keep this from immediate family, but news like this travels quickly," said Jason Kurland, a partner at Rivkin Radler, a law firm in Uniondale, New York. "Try to keep the circle of people who know as small as possible."
Past lottery winners have discovered the hard way that long-lost friends and family — not to mention complete strangers — can come calling, looking for loans or outright handouts.
And given the sheer size of this jackpot, the stakes are pretty high. Regardless of whether the winner chooses to take the haul as an annuity spread out over three decades or as an immediate lump sum, the amount will be life-changing.
The lump-sum option — which most lottery winners choose — was estimated at $904 million before the drawing. Using that number: Even after federal tax totaling 37 percent and South Carolina's 7 percent income tax, the total take would be roughly $506 million.
Many financial advisors recommend taking the lump sum. If the windfall is managed and invested properly, you could end up with more over time than the annuity option would deliver.
And while investing and saving might not seem as exciting as spending, there would be no shortage of money available for that, as well.
Experts say it's OK to splurge on yourself upfront, whether it's for a new car, new house, overseas vacation or something else you've been coveting. The important thing is to set boundaries right away, even when the amount of the win seems unlimited.
"It's important to set up a preliminary plan and budget right from the start," said Kurland, who helps lottery winners navigate their sudden windfall. "Emotionally, having an initial structure in place is extremely helpful for winners, because this is such an overwhelming experience."
More from Personal Finance:
The 10 most expensive U.S. tourist destinations
People in this state are at the highest risk for identity theft
The best time to book holiday travel is right now
One common way to help ensure the money lasts is the so-called 4 percent rule. That is, if you withdraw no more than 4 percent of your money each year, it should last decades as long as it's properly invested in a diversified portfolio, said certified financial planner Jim Shagawat, president of Windfall Wealth Advisors in Paramus, New Jersey.
Applying that withdrawal rate to the after-tax estimate of $506 million would mean $20.2 million could be tapped each year without depleting your wealth.
Additionally, lottery winners in South Carolina get six months to claim their prize. During that time, the winner should assemble a team of experienced professionals to help determine how to handle their new wealth, including an attorney, financial advisor and tax advisor.
Meanwhile, the Powerball jackpot stands at $620 million for Wednesday night's drawing. The chances of hitting it are slightly better: 1 in 292 million.
via IFTTT
No comments:
Post a Comment