The Mega Million draw is set for today. However, it’s no longer Mega Million but Mega Billion. That’s right the total jackpot is $1,000,000,000. That’s a lot of zeros! I remember a few years back when the jackpot prize went beyond one billion dollars. The lines at the convenience store were long. Some offices have a pool of money for quick picks hoping to win the billion dollars. In the end, there were 3 winners who will share the prize. Whoever wins the jackpot will hopefully be set for life.
Have you made any plans if you win that much money? My husband is hoping to win just the $1,000,000 prize (match 5 numbers). Have you any luck in winning? I think the most I’ve won with mega million or powerball was $4 (a number and the power/mega ball). However, if I win the jackpot, here’s what I will do.
- Cash or Annuity: I will opt for the cash prize. You never know when you will die so the annuity might be a risk.
- Team of Experts: I will hire a lawyer, tax expert and financial planner. Some states are required to reveal the winner and NC is one of them. I don’t want every relative or family or friends that I’m not aware of come knocking on my door and ask for money. We also might need to go incognito and change our names or something.
- Taxes: Set aside money for taxes. Hopefully, the tax expert I hired will be able to help me. Any lottery winnings will be deducted the minimum federal and state tax. For NC, minimum federal tax is 24% and state tax of 5.5%. Of course, this is just the minimum. When you file for your income tax in April, you will be charged depending on your income bracket. Lucky for those who live in states with no state income tax. That’s at least a certain percentage for you to spend.
- Charitable Contributions: At this time of COVID, I will set aside a portion of the money for charitable contributions. Since charitable contributions can be deducted from your income tax, I will make sure that the amount is above the standard deduction in order for me to be able to itemize my deduction.
- Debts, Loans, Mortgage: Despite what the financial planner, lawyer and tax expert might say. I will be paying off all our debts, loans and mortgage.
- Gifts: the law stated that $15,000 gifts to individuals are exempt from gift tax. I might as well, share the love to my KNOWN family and relatives (if I don’t know you, you’re not included)
- 401K: I haven’t had the chance to maximize my contributions on my 401K nor my husband’s. I will put some contributions in (tax deductions!!) mine and my husband’s as well as set aside some money for the next ten years contributions.
- Set a college fund: I will set a college fund for my stepson.
- Investments: Perhaps buy real estate properties as investment. Rent them out as passive income. Beef up my stock investments. Beef up my emergency fund. Help my sister purchase a dental practice (she can pay me a smaller interest).
- Insurance: Purchase a funeral plan, long term healthcare plan, life insurance for both me and my husband.
- Car: Purchase a car in cash for both me and my husband. The one we’re using right now has 160k miles and is almost time to retire.
- Trust Fund: set up a trust fund for my nieces and nephews.
The rest, I’m not sure yet what to do! That’s a lot of money to burn. How about you? If you win the jackpot, how will you spend it? Honestly, I don’t want to win the jackpot, a million or two every now and then is fine for now. Having that much money in one go is a nightmare.