Should you become a Powerball winner, this is the investment advice from the pros you need to see so you can make the best financial decisions.
With so many ways to win any Powerball prize, more and more people are buying tickets these days. You’d be just as enthusiastic about winning $50,000, $100,000, or $1 million than you might be to learn you’ve won the multi-million-dollar jackpot. And if you're like most Powerball players, you likely have an idea in mind about how you'd spend and invest those winnings. But whatever prize you find yourself winning, there is some financial advice you need to hear. These are the pieces of investment advice any Powerball prize winner can rely on to make the smartest decisions.
1. Take the Time You Need to Plan
When you’re holding the winning Powerball ticket, you’re over the moon excited about collecting your winnings. But financial advisers warn not to rush into your next move just yet. Most Powerball provisions allow winners time to come forward, anywhere from 30 days to one year. Take your time. And once you're done quietly celebrating your big victory, you can plan ahead and assemble the team you’ll need to handle your newfound wealth, including a financial investor, an attorney, and an accounting professional you trust.
2. Protect Your Winnings
Don’t broadcast that you’ve won until you’re ready to do so. You can become the target of online hacks or, worse, from within your own family. Sign the back of your Powerball ticket and safeguard it until you have a chance to take it to your Powerball office for verification. And from there, you’ll want to protect yourself and your winnings through the lens of applicable taxes, gifting, and saving. Despite your good-natured intentions of helping others, you can't be of much help unless you're in your own best financial position.
3. Lump Sums Aren’t Always the Best Choice
It’s not uncommon for Powerball winners to select the lump-sum payout versus the annuity payout. But don’t rush to judgment in making your payout decision. Lump-sum cash payouts won’t be the wisest decision for every player. There are a lot of unique factors that your financial advisor can walk you through to create your pros and cons list. Weigh your options based on your age, current financial position, and the advice of your consultant.
4. Be Strategic About Spending
Yes, you’ll have a handful of bills you’ll want to pay off immediately with your Powerball winnings. But don’t authorize any payments or gift any money without seeking advice first. Be strategic about how you plan to spend your money, carefully weighing advantages and maintaining a conservative approach to expending your winnings.
5. Invest a Portion of Your Winnings
Financial advisors will often suggest doing what you can to prolong your winnings for as long as possible. Certain investments can help grow and sustain your large Powerball sums over time. But even smaller prizes can be portioned out to include savings for a nest egg or retirement. Talk with your advisor about what percentage of your winnings should be put aside for a rainy day and how best to maintain or grow it wisely.
6. Don’t Quit Your Job
There have been plenty of Powerball winner stories about those who rushed to quickly leave their place of employment for good, some before they’d had a chance to consult a financial advisor. For some, winning $1 million seems like a lifelong nest egg, capable of sustaining a quality of life. However, it’s not entirely uncommon for those funds to drain quickly, especially if you’re not planning ahead, overspending, or over-gifting.
So, if you find yourself winning any Powerball prize amount, consider these pieces of advice from financial advisors. Protect yourself, protect your winnings, and be smart about your plans for spending. With these suggestions in mind, you’ll be in a better position to enjoy your winnings while making your dreams come true.