Unless you are a lottery winner, chances are you’ve never experienced what it is like to receive such an incredibly large sum of money. It’s easy to imagine the perks of winning, but the reality can be overwhelming. There are some things to keep in mind to ensure that you enjoy a successful jackpot lottery experience, whether it’s playing for the big jackpot or purchasing multiple smaller prizes.
The odds of winning a lottery prize depend on the size of the pool of possible numbers and the number of winning combinations required, according to NerdWallet. If there are fewer available options, your chances of winning are higher. For example, the 2by2 lottery requires players to select four of 52 possible numbers, giving them a winning probability of 1 in 105,625. The Mega Millions game has five winning white balls and one gold Mega Ball out of 70 total possibilities, making its winning probability one in 302,575,350-to-1.
Another factor in the odds of winning a jackpot lottery is interest rates. Because the advertised jackpot amounts are based on annuities, or how much a person would receive in annual payments, interest rates play a role in their size. If interest rates are high, the amount of annual payments a winner would receive is lower.
In order to maximize your chance of winning, it is best to purchase multiple tickets. This can be done by purchasing a multi-state ticket or selecting different lottery games. It’s also important to choose the correct lottery numbers. Some people use their own birthdays or those of family members as lucky numbers, while others use the dates of major events, such as wedding anniversaries or the birth of children. One woman used the numbers of her friends and family members to win a jackpot worth $636 million in 2016.
If you are a big-ticket lottery winner, it’s important to hire a financial advisor and an estate planning attorney. They can help you make important decisions, such as the optimal time to claim the prize and whether or not to take a lump-sum or annuity payout. They can also help you prepare for the influx of cash by ensuring that basic estate planning documents are in place and that investment accounts are set up to earn interest on the monies you’ll be receiving.
Another way to minimize your tax burden is by donating to charity in the year you win the lottery. Many states allow you to fund a private foundation or donor-advised fund with the proceeds of your winnings, which will give you a current income tax deduction but allow you to donate the money over time.