How Mega Millions and Powerball winners can protect their windfall

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Mega Millions lets players continue daydreaming.

Without hitting any of the six numbers drawn on Friday, the jackpot has reached an estimated $ 6 $ 6 million. And the PowerBall ball, with the next drawing set for Saturday night, is 1,341 million.

Of course, because of the tax, that announced amount you manage to beat the astronomical contradiction of winning a single ticket (1 in 302 million for Mega Millions and 1 in 292 million for Powerb beat).

However, a sudden gust of wind in your life will probably feel overwhelming, experts say. And when you are eager to claim your victory, experts say that it is best not to rush to the lottery headquarters on the day you find your luck.

In other words, take a deep breath.

“The first thing I recommend is to build a team of professionals to handle many aspects of that type of money,” said Doug Boneperth, president of New York’s Bon Feed Wealth, a certified financial planner.

That team should include an accountant, financial advisor and attorney. Here are a few other things if you hit the jackpot.

Annuity or consolidated amount?

You must choose either a unit amount or an annuity over 30 years to win. For the mega-million $ 376 million jackpot, the cash option is 7 287.4 million. For the 34 1,341 Powerball prize, that amount is 2 262.5 million.

Experts generally recommend getting all the money at once – this is what happens with most winners.

“The unit would like to take the distribution of the amount,” Boneparth said.

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However he added a warning.

“If you’re not disciplined, or you’re afraid of how to invest even with help, annuity may be a better option,” Boneparthe said.

Tax blow

Before the money reaches you, 24% will be withheld for federal taxes. 7 ૨77 of Mega Millions. For the cash million cash option, it means you million million dollars will come from the top and leave you 8 218..4 million. Powerball’s 2 262.5 million units, with 199% million dollars remaining, with 63 million in cash. Will be 63 million.

Still, it doesn’t end there. The top marginal rate of Tax 37% applies to income above કર 518,400 for tax filers (22 622,050 for jointly filed married couples), which means there will be more income at tax time. And, there may be state taxes withheld or outstanding.

“In some places, when you consider city, state and local taxes, you can take a look [close to] Going to 50% tax, ”Boneparthe said.

There may be strategies to reduce what you pay in taxes, which is why having a tax advisor on your team is key.

Other stuff

If you can’t claim your prize anonymously – depending on the state – you can leave the city for a while. Unwanted attention can be of both public and extended family.

“Once your fifth uncle is removed, he can catch you,” said Boneparthe. “Find comfort somewhere and run away.”

In addition, if you want to share some money with family or friends, plan in advance for those gifts, Boneparthe said.

“You want to avoid getting hit frequently,” he said. “You can set expectations ahead of time. This is the time when the plan is actually implemented.”