Financial Advisor Warns Of Lottery Winner Mistakes
PITTSBURGH (KDKA) -- The Powerball jackpot has reached a record-breaking $1.5 billion, and if you won Wednesday night, there are some things you should and definitely should not do.
Powerball announced the winning numbers for the $1.5 billion jackpot Wednesday night.
The winning numbers were:
4-8-19-27-34, Powerball 10
All six numbers must be correct to win, although the first five can be in any order.
The California Lottery confirmed on Twitter that a jackpot-winning ticket was sold in Chino Hills near Los Angeles.
We have a winner in California! A jackpot-winning ticket was sold in Chino Hills. We're still awaiting results from other states.
— California Lottery (@calottery) January 14, 2016
Let's say you have the winning Powerball numbers! First off, congratulations!
It turns out, there are some things you should do and definitely should not.
Plenty of lottery winners have made mistakes. One study found 44 percent of winners burn through their money in just five years.
"There are tremendous pitfalls potentially," said Robert Fragasso, CEO of Fragasso Financial Advisors.
Experts say the very first thing you should do is turn your ticket around and sign your name on the back of it.
"I would say photocopy it on the both sides," said Fragasso. "Put the ticket in a safe deposit box or a good solid safe."
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Even though the jackpot is $1.5 billion, don't expect to get it all.
If you pick the lump sum, it drops to $930 million, and then.. "Uncle Sam's going to get 40 percent and the state's going to get three percent," said Fragasso.
That brings you down to a paltry $533 million.
He warns: "Don't start writing checks to people. Don't start buying big ticket items. Instead, get a tax attorney, a tax accountant and certified financial planner."
You'll have to file your claim at the lottery office outside Harrisburg, and you can't totally lay low.
"Pennsylvania is among the majority of states in the U.S. that don't allow winners to anonymous," said Gary Miller from the Pennsylvania Lottery.
However, you do not have to get your picture taken or be part of a news conference.
Still, expect to be hounded by some relatives, friends and people who want you to invest in their ideas.
Finally, rather than taking the lump sum, you may want to consider payments spread out over 30 years instead.
You'd actually get $1.5 billion before taxes that way. And Fragasso says the payments are probably a better option if you're kind of bad with money and don't really follow through with financial advice.