22 people won a million dollars

22 people won a million dollars

22 people won a million dollars

The the biggest lottery jackpot in history went to one lucky winner earlier this week. But it is estimated that 22 people may have million dollar tickets in their hands.

A person in California who bought a ticket to win the jackpot matched all five numbers and the Powerball number secured a prize of $2.04 billion. But matching five numbers still means a million-dollar payout — and 22 people in 16 different states could have winning tickets, according to Powerball.

Those million dollar winners would still face huge taxes that take a bite out of lottery winnings. An automatic federal tax rate of 24% would reduce the $1 million payout to $760,000, according to Powerball’s tax calculator. Local income taxes and rewards could further reduce that number, depending on where they live.

Regardless of the final tally, the winners would be smart plan carefully how to use the money. While smaller prize winners may not feel the need to maintain anonymity to the same extent as big jackpot winners, a six-figure cash prize can certainly change your life — and unlike jackpot winners, you may not have the option to receive your payout as an annuity.

There are enough horror stories lottery winners squander their winnings to make winning the big prize seem like more trouble than it’s worth. A smaller prize takes the pressure off a bit, but anyone who wins such a large cash payout can make mistakes.

In fact, about 70% of people who receive a large cash windfall have nothing to show for it within a few years, according to the financial planning group Sudden Money Institute.

Expert advice varies about exactly how you should spend the money and your personal needs may influence your decision, but consulting with a financial planner can help you navigate these issues and get the most out of your winnings.

“If you win the lottery, my first recommendation is to equip yourself with a strong team,” says Liz Weikes, wealth partner at JP Morgan Wealth Management. “You’ll want to hire an attorney, financial advisor, and tax professional that you trust and feel comfortable with.”

Common advice for lottery winners is to take the prize as an annuity to extend life. When that’s not an option, using money to build wealth or achieve other financial goals is never a bad idea.

“One of the best uses of your lottery windfall is to pay off all your debt,” Robert Pagliarini, a certified financial planner who also wrote a book on how to manage large cash flows, tells CNBC Make It.

With lump sum payouts, Pagliarini recommends winners “set aside enough to cover all taxes. Put whatever’s left over for retirement.”

Want to earn more and work less? Register for free CNBC Make It: Your Money virtual event December 13th at 12pm ET to learn from money masters like Kevin O’Leary how you can increase your earning power.

Don’t miss: Rich people don’t have a ‘lottery mindset’, CEO says – here are 3 things millionaires do differently

22 people won a million dollars

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