‘Uh, you have a few more zeros than that’: Michigan man thought his scratch-off won $500 — but it was a $500K winner he held for nearly a year

He told Michigan Lottery Connect that he and his wife buy their family lottery tickets for Christmas each year. He realized while scratching his own ticket that he had won some money, but he initially thought he had just won $500.

He said a family member scanned his ticket with the state’s lottery app and told him “Uh, you have a few more zeros than that!”

He held off claiming his winnings — the maximum amount possible with the $10 scratcher ticket he had played with — for nearly a year. He told Michigan Lottery Connect that he planned to save his winnings.

A representative for the Michigan Lottery did not respond to Moneywise’s request for comment on this story.

You just won the lottery — what do you do with your money?

In 2024, Americans spent a bit under $105 billion on lottery tickets. They received $70 billion in winnings, and after administrative costs, nearly $30 billion went to the various programs funded by those lotteries. Many states use lotteries to generate revenue for education and other funds that benefit citizens.

The first thing you should remember is that you owe taxes on your lottery winnings. The IRS withholding rate for any kind of gambling winnings — whether that’s a state lottery, a casino, sports betting, or any other form of gambling — is 24%. That’s true whether you take a lump sum or receive annuity payments.

Most states that have a lottery also tax lottery winnings. Sometimes, they tax it at the same rate as any other income.

Choosing between a lump sum and an annuity depends on how your state taxes winnings and how you plan to use the money.

Your winnings will likely put you in a higher tax bracket, which means you could lose a lot of a lump sum immediately. However, depending on how much you win, it’s possible that you’ll still be at the highest tax bracket each year with annuity payments.

For some winners, the temptation to immediately spend a huge chunk of their winnings can actually leave you poor. If you think you’re at risk for that, annuity payments ensure that you’ll continue to receive income each year.

But even though the total amount of your lump sum payment might be smaller than what you would get over the full term of an annuity, if you invest the money, you could stand to make a lot more long-term.

If you win a large amount of money through any form of gambling, it may be worth it to find a financial advisor who can help you decide what to do with your winnings. They can help you decide the best way to use the money to meet your short-, medium- and long-term goals.

Don’t assume you’ll win a life-changing amount of money through the lottery

While there are a handful of people who win big, the majority of people will never see a huge windfall playing the lottery.