May 3, 2026
The Powerball draw on April 29th turned a shocking number of people into millionaires. In total, there were 91 winners, including 89 across the United States who took home the second-tier prize of $1 million each (1). The two jackpot winners — one in Indiana, one in Kansas — share a $143.4 million jackpot worth $71.7 million apiece.
Powerball tickets are sold across the country, allowing the jackpot to reach higher amounts than in some other lottery systems. In most states, tickets cost $2 and players choose five white numbers between 1 and 69, then one red Powerball number between 1 and 26. The jackpot continues to grow until someone gets all five white numbers correct and the red Powerball. Winners can choose to receive their prize as a lump sum or an annuity.
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Winning the lottery might sound like a dream — and for most people, that's all it ever is: The odds of winning a Powerball jackpot sit at roughly 1 in 292 million (2). But for the handful of Americans who beat those odds every year, the windfall becomes a reality. However, winning the money can come with a dark side.
Why winning the lottery might not be the dream it seems
To start, lottery winners can choose either from an annuity payment, which spreads out payments over a set period of time, or a total payout which is a lump sum.
What many lottery winners don't realize is that while the annuity payment is the full amount, the lump sum is equal to the amount of money game officials think is necessary to fund the annuity, so it can be much smaller — roughly half of the annuity amount. For example, the annuity amount might be $336 million, with a cash value of $151.3 million (3). While that $151.3 million is still a decent payday, your payout might be smaller than you expect, given that the advertised amount is the annuity sum.
The second thing many winners aren't prepared for is the taxes. Lottery winnings are generally taxed as normal income (4), which means you could land with a lot less than you expect. For a $1 million prize, if taken in a lump sum, you could expect to pay nearly $300,000 (4) in taxes.
Then, there's what happens after you get the winnings.
Many lottery winners don't have a plan for what to do with the funds and end up spending it all fairly quickly. That can land them in hot water — especially if they take ongoing costs like a mortgage or a car payment. Even if the home or the car is purchased outright, the ongoing costs, like insurance and property taxes, don't end when you run out of funds.
Research shows that bankruptcy rates soar for lottery winners three to five years after winning — and one widely cited estimate claims that about a third of big winners eventually end up in bankruptcy court.
So what should you actually do if lightning strikes? Experts say the first few moves matter most.
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What to do if you win the lottery — or land another windfall
While most of us won't be lucky enough to win the lottery, it's not uncommon to find yourself with a windfall. Bonuses, inheritances, or a larger-than-expected tax refund can all leave you with more cash than you expect. Whether you've won $1 million or just have a few extra thousand, here's how to make the most of a windfall:
Don't tell anyone
The moment your win becomes public, you become a target for scammers, estranged relatives and people you haven't thought about in years. If you won the lottery, secure the ticket first: sign the back, make copies and store it somewhere safe. Then stay quiet. Most states give you between 90 days and a year to claim, so you have time. Several states allow winners to claim anonymously through a trust or LLC, keeping your name out of the public record entirely. One person even wore a disguise to claim their prize (5).
Don't make any big purchases right away
The impulse to buy that dream house, a car, or book a vacation is understandable. Resist it. Big purchases made in the first weeks tend to be emotional rather than strategic and they set a spending pattern that's hard to walk back. Give yourself a cooling-off period of at least 90 days before you make any major financial decision, as many advisors suggest.
Clear your debt
Before you invest a dollar, pay off what you owe. High-interest debt, such as credit card debt and personal loans, should be paid off first. Eliminating it first gives you a clean financial foundation and removes the monthly drag that can quietly undercut even a large windfall over time. If you have student loans, those should be next on your list. A mortgage is a bit more complicated — in general, if your current mortgage rate is low, you're better off investing the rest. You'll likely earn more in the market than you'll save in interest.
Set a limit for splurges
Telling yourself you'll spend no money on anything fun is unrealistic and often backfires. Instead, carve out a defined amount — say 5 to 10% of your after-tax windfall — and treat it as a guilt-free budget. Having a number makes it easier to enjoy the win without letting it become a habit.
Invest the rest
What's left should be invested with the help of a fiduciary advisor, not parked in a savings account or handed to a friend with a business idea. Diversified, long-term investing is what converts a windfall into generational wealth, which is the whole point. If you plan to manage it yourself, consider investing in exchange-traded funds (ETFs), which offer a fairly diversified way to invest.
Landing a windfall might feel like a dream come true, but you need a good plan to make the most of your funds. If you want to come out ahead, don't make rash decisions and treat the money like the finite resource it is.
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
Lottery Post (1); PBS NewsHour (2); WGN-TV (3); TaxAct (4); Business Insider (5)
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Danielle is a personal finance writer whose work has appeared in publications including Motley Fool and Business Insider. She believes financial literacy key to helping people build a life they love. She’s especially passionate about helping families and kids learn smart money habits early.
