Stay Anonymous — and Other Survival Tips for Lottery Winners

Raining money on a young man
Minerva Studio /

Someone in South Carolina became a whole lot richer last month. A single winning ticket was sold in the state for a nearly $1.6 billion jackpot in the Mega Millions lottery. So far we don’t know who that person is, and if he or she is smart, it will stay that way.

Staying anonymous is one essential piece of advice for lottery winners. Keep reading to learn more about that and 10 other things every new millionaire should do.

1. Sign your winning ticket

Woman with Lottery Ticket
ronstik /

It’s possible the Mega Millions winner is biding his or her time before claiming the prize. Maybe the person is making plans and meeting with advisers or perhaps simply hoping that the excitement over the jackpot will die down.

Regardless of the reason, we hope its rightful owner has signed the back of the winning ticket. Otherwise, a friend or family member in the know could swipe the ticket, sign it themselves and claim the money.

2. Stay anonymous

Woman's face obscured by shadow, hat
Viacheslav Boiko /

The Mega Millions winner is lucky to live in South Carolina. It’s one of eight states that allow lottery winners to remain anonymous.

While lottery officials would love a photo-op with you holding a giant check, you should always remain anonymous if that’s an option. Otherwise, you’re inviting a deluge of appeals for donations, as well as predators looking to take advantage of your new wealth.

3. Lump sum option: For level-headed investors only

Hands holding stacks of money
Epic Cure /

When you win a major lottery award, you get two payout choices. You can take a lump sum or receive annuity payments over a 30-year period.

The annuity payments will give you the entire jackpot amount while a lump sum payout will be smaller. That’s because the advertised jackpot includes interest earned on the cash value over a 30-year period. If you want all your money upfront, you forfeit the interest and receive the cash value only. For instance, the cash value on the $1.537 billion Mega Millions win is $878 million.

If you are a disciplined investor, you could end up with more than $1.537 billion over 30 years by putting the lump sum into a balanced portfolio of low and higher risk assets. Plus, you’ll pay taxes on all your winnings now, at a time when tax rates are relatively low.

Be warned: There are many tales of woe about lottery winners who took the maximum payout — some with best of intentions — and ended up squandering their winnings and ruining relationships along the way.

4. Collect over time and avoid frittering it all away

Lukas Blazek /

Maybe you’re the type who wants to spend $20 the instant it lands in your wallet.

It’s OK to admit you tend to make impulse purchases or invest emotionally. If that is you, annuity payments from your lottery winnings are probably a better option. You’ll get a yearly payment that will let you invest and spend without risking the entire jackpot if you make some poor decisions. If you blow it, there will always be more cash coming your way.

5. Hire a CPA

A woman works on her taxes with an accountant
Andrei_R /

Your lottery winnings may come from the government, but that doesn’t mean they’re exempt from taxes. Uncle Sam and your state are going to want their cut, too.

While there is no avoiding taxes, a CPA or other accounting professional may be able to suggest strategies to minimize how much you’ll pay. Plus, this person can make sure your tax returns are filed correctly. This isn’t a job for someone who files taxes as a side hustle in the spring. Find a firm and an accountant who has experience working with big numbers.

6. Find a financial adviser and an attorney

Couple meeting with advisor.
wavebreakmedia /

While you’re looking for a CPA, find a financial adviser and attorney as well. You need a team to help you invest wisely, prioritize spending and create an estate plan. Again, you want professionals by your side. Don’t think Uncle Billy can help just because he has an ETrade account.

Certified financial planners must meet certain experience and ethical standards so they are a good place to start your search. You can locate CFPs in your area by visit the Financial Planning Association website. Once you have a planner, that person may be able to direct you to a trusted attorney.

Check out: “Ask Stacy: How Do I Find a Good Financial Adviser?

7. Pay off your debt

Couple doing bills, paying debt
pathdoc /

Now that you’ve got a team assembled, it’s time to start using all that money. A top priority should be paying off debt. There’s no reason to owe money on a high-interest credit card when you have millions in the bank.

As for other forms of debt, some people argue it’s better to invest money rather than pay off low-interest car loans. They reason you could make more in the market than you’ll pay in interest. However, you might sleep better at night being debt-free. As for student loans and mortgages, there’s no reason to keep those for a tax deduction if you’re taking your winnings in annuity payments. Both of those deductions phase out for high-income households.

8. Fully fund your savings goals

Savings goals
Number1411 /

Next, put money toward all your savings goals. That means setting aside money in an emergency fund, maxing out retirement savings and getting college accounts set up for the kids. You may also want to designate funds for travel, a house or other big purchase you’d like to make in the future.

Your CPA and financial adviser can help you determine how best to fund your goals while minimizing taxes and managing risk.

9. Be strategic about charitable donations

Soup line handing out food.
addkm /

Many lottery winners love to spread the wealth. They may give money to family, friends and favorite charities. It’s great to be generous, but don’t do it in a haphazard way.

Instead, work with your CPA and financial planner to prioritize your tax-deductible charitable gifts as well as your handouts. Consider what causes you are passionate about — is it battling world hunger, saving elephants, funding local arts? What ever it is, research which organizations are best at addressing those issues. Tax deductions for donations are limited to half your income, so it might make sense to spread them out. Plus, having a plan makes it easier to avoid feeling pressured into giving money to every organization or individual who makes a request.

Whatever your level of giving, do your homework. Check out: “6 Tips to Donate to Charity the Smart Way.”

10. Splurge smart

Man with new car
Syda Productions /

What’s the point of winning all that money if you can’t have any fun with it? It makes sense that you’d want to use some of your windfall to splurge on a new car, new house or a trip around the world. But remember that even the biggest bank accounts can eventually run dry.

10. Get used to saying no

Woman gestures "no."

If you win the lottery, you need to get very good at saying no to requests that are not in the plan — and there will likely be many. Even if you stay anonymous, people in your inner circle will likely know you’ve come into some cash, and the word may trickle out to others.

Lottery winners need to avoid feeling like an ATM for others, but they also need to say no to themselves. It doesn’t matter if you have $16,000 or $1.6 billion. If you haven’t planned for it in the budget, you shouldn’t be buying it.

How would you use your millions if you won the lottery? Share with us in comments below or on our Facebook page.

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