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jca's avatar

You just won 200 million from the lottery, after taxes. What's your plan for all that money?

Asked by jca (36059points) August 12th, 2017

There was just a huge lottery jackpot of 393 million, and the news said there was one winning ticket sold (in Illinois). I didn’t buy one.

Let’s say that person gets 200 million after taxes.

If you won 200 million after taxes, what would you do with the money? Who in your life would you give money to, and how much would they get? Or would you keep it all for yourself? Would you give any to charity?

I’ll post my plan in a few.

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63 Answers

PullMyFinger's avatar

“Plan” ??......I don’t need no steenkin’ plan !!

(The first thing I do is hire some guy who is smarter and funnier than I am to come here and pretend he’s me….)

CWOTUS's avatar

Boy, if I won $200 million I could turn that into a small fortune!

rebbel's avatar

Four croissants.

chyna's avatar

Pay my house off, retire, donate to several animal shelters, give money to my relatives, see how much money it would cost to ensure every student in my state had free lunches.

ARE_you_kidding_me's avatar

Probably start a nonprofit renewable energy research lab.

Sneki2's avatar

Lemme see. That is 20,309,926,954.86 Serbian dinars.

Lots of money to spend. I could buy my own apartment, donate to charities, save the institution I was planning to save since long ago, pay off my studies. I could also invest in several projects concerning my village, and I’d still have enough money to travel and dick around. Even of I don’t do that, there are a lot of hospitals, schools, and other important buildings to renew, as well as other projects of all kinds that are delayed because no one wants to invest.

I’d probably need some sort of an expert to help me with investing it properly. Maybe start some business to keep the money coming in future too. If I play it smart, I could spend that money to earn even more in the future.

I surely wouldn’t tell everyone immediately, I’d be dead in three days.

canidmajor's avatar

I would channel probably 95% into the many causes and charities that are dear to my heart, invest the remainder, and live pretty comfortably while helping out my friends and family.
And I’d invest in a weekly cleaning service. I am a terrible housekeeper.

JLeslie's avatar

Sell our business. If it had trouble selling I’d run it for a while making zero money if I had to, or pay our lead mechanic one or two years pay so he doesn’t have to worry about getting a job fast. He’s close to retirement age, I just couldn’t leave him in a terrible financial position, I think my husband would agree.

Buy a lot of land, maybe 50–100 acres.

Buy or build a new house.

Buy a house for my husband’s parents to live in.

Give my sister $15k (or whatever the current amount is for tax free gifts). I’d continue to give her something ongoing probably. Maybe help buy her a place to live, or pay off her mortgage.

Pay for better care for my aunt.

Travel. Initially I’d like to take a Panama Canal cruise, see Banff, spend a month in Europe. Doesn’t have to be right away, but I’d like to do those things the first year.

I don’t know what else my husband might want to give his family. I know he will want to buy a few cars, and a race car. I think build a race track, either for karting or cars I’m not sure. Maybe he won’t build one if he can go to a track whenever he wants.

Edit: I’d work my other job until my boss could find a replacement.

Also, I’d give to heart disease and some other causes, and maybe try to seek out researchers that are interested in some of the same medical problems I am.

Mimishu1995's avatar

I would finally be able to live my life as an artist without worrying about money.

But I would set my money aside. I wouldn’t spend them all in one place. They would go to my savings like all others. And I would use them later, if there was anything coming up that I could use money for. The difference here would be that I wouldn’t have to worry about money so much and I could help people more freely, and I would have a lifetime to do so.

Espiritus_Corvus's avatar

I would fly to Pyongyang, round up all those cute Traffic Girls and get them out of there before Kim does something really stupid and gets them all killed. LOL.

marinelife's avatar

My hubbie would retire right away. We would then travel. Move back to the Pacific NW, buy a home with a water view (maybe waterfront) and lots of trees around. Then we would do the projects of our heart including producing some TV shows for public television about music, and work on charities (animal ones first).

Dutchess_III's avatar

Get out of debt (probably ~$100,000) buy a nice piece of wooded property near my son and his family. I’d probably spend more money on landscaping and ponds and waterfalls and outdoor stuff than I would the house (I WANT ONE OF THOSE PATIOS THAT OPENS UP TO BE A POOL THEN CLOSES TO BE A PATIO AGAIN!) Build a great little house for me and Rick, with an addition in the back, or a whole separate, larger cottage for family get togethers. Then invest the rest to live on, and to have something for my kids to inherit.

Oh pay off the kids’ mortgages and the one who is renting, I would buy her a house.

Coloma's avatar

I’d buy about a 2000 acre ranch property in a secluded area but close enough to amenities, build a custom pool, landscaping, design my own little nirvana and hire help to do all the maintenance work. haha I would travel more and I would give lots away to my daughter and charities

Kropotkin's avatar

Build a zero carbon home. Build an aquaponics farm—maybe as a cooperative.

Set up a left-wing think tank dedicated to opposing right-wing libertarian and neoliberal think tanks.

Patty_Melt's avatar

Doctors, doctors, doctors.
Purchase a number of properties for the purpose of donating them to various universities, on the condition they use them to replenish certain plant and animal populations.
Self publish.
Send condolence cards to everyone in my family, because they would not get a cent.
Visit friends I haven’t seen in a long time.
Hire a staff.
Buy homes in at least three different locations, horses to live at one.
Surprise a few strangers.
Buy a wooly mammoth.
Get my own anti gravity chamber.
Get a planet named after me.
Take a bunch of college courses.

Zaku's avatar

I’d put a lot more time and energy into it than I will into answering a Fluther question. I’ll consult various people for advice and develop plans that make sense.

I’d support the people in my life, friends and family, to make sure they get what they need and can do what they want (if for example they’d rather be being creative than working a job they’re doing for the money).

I’d support charities, mostly environmental organizations, and/or start a new one, but I wouldn’t just donate money – I’d ask knowledgeable people about strategies for using the money to set up systems that generate more money in good non-exploitative ways, so that an ongoing self-supporting or even growing organization is created. For example, buying up wilderness that nasty corporations would like to do nasty things with, and figuring out how to both protect/husband that land and generate income from it to keep the trust going and even be able to invest in more land. Or something.

I’d also arrange for citizenship in multiple nations, travel, and hire people to help me create games, and invest in other creative people and so on.

Coloma's avatar

Actually I wouldn’t want 200 million. More of a burden than anything else. I’d be thrilled with say, 5–7 million. More than enough to retire comfortably, share with friends and family and donate to some good causes. Nobody needs 200 million and the headaches of managing that kind of money would bring. I disagree with the lottery awarding obscene amounts of money to one person. Much better if thousands of people won one or two million each.

Dutchess_III's avatar

Well, my cousin…..

Kardamom's avatar

Put some of it in an interest drawing account, so that it would keep earning money.

Buy a house (I’ve got some pretty specific ideas about that, but that is for another Q)

Donate money to some animal welfare charities.

Set up a work/live art studio for a specific friend.

Buy a new pair of ice skates.

Give some of my friends and relatives some money.

Buy a cabin in the mountains with room for guests.

Travel (need another Q to give better answer for this.

Buy a nice minivan, good for hauling camping gear, and transporting lots of people.

Dutchess_III's avatar

….I’s your friend @Kardamom!!!

Kardamom's avatar

@Dutchess No, my friend is a very hard worker and has to work to make a living, but they never get to take a day off or do anything fun. I’d like to help this friend to be able to work on their art, mostly painting and sculpture and not have to pay a mortgage or rent.

Pinguidchance's avatar

I’d put the unregistered winning ticket in the unmentionables drawer and realising how lucky I was, I’d probably buy a lottery ticket on the strength of it.

I’d only tell people here about it and look forward to lots of new friends, and a whole lotta lurve and letterbox.
Led Zeppelin – Whole Lotta Love

jca's avatar

I’d cash it in right away to I’d not have to worry about being robbed for it.

I’d not do anything right away with the money, except quit my job. I would consult with a financial advisor and a CPA (both of which are in my family and both I trust very much, and both would be recipients of large amounts of money anyway so no worry about them steering me wrong).

I’d give a very large amount to close family members (10 or more million each). I’d givea few million each to close friends and one million dollar gifts to other friends, coworkers and a few Jellies. After that, some large gifts to charities of my choice (animal welfare charities probably). This would all be after investing the majority of it. After the gifts and donations I think I’d still have about 100 million for myself. If I could live off the interest, my daughter would inherit a large sum. Whatever she would get would be in the will with stipulations, like she must attend college, and some would go to her at certain points in her life (so if she were wasting it, she wouldn’t be able to waste all of it at once). I’d have to have the relatives manage it still, and that would be in the will. My daughter is elementary school age now and I just want to make sure that down the road she’s not going to do stupid things with it, like gamble it away.

seawulf575's avatar

My house would be paid off along with all bills. Taxes and utilities would be paid for the next 40 years or so. I would give at least a million to my church…they do a lot to help the community. After that, all my kids with homes would get their homes paid off and the ones without homes would get a home bought for them (within reason). After that I’d sit back and figure out what else needed to happen.

RedDeerGuy1's avatar

I would start my own science foundation. With my own educational television station .I would eat AAA prime rib and potatoes with extra gravy every night. I would start a Mooc. I would hire the best and the brightest people to cure my time travel.

Dutchess_III's avatar

Playing off of @jca, I’d stick it in my safe deposit box then start doing some massive research!

Patty_Melt's avatar

200 million. You could waste and mismanage five million and never know it was gone.
I don’t have enough years left to worry that I handled $200 M badly. I could spend like a freak until I die, and still have enough left to have vultures hover near.

JLeslie's avatar

Just think. The top 400 earners in America make over $200 million a year.

Patty_Melt's avatar


ARE_you_kidding_me's avatar

And only about 2 million would set me for life.

jca's avatar

I used to work with a guy who won a big jackpot (forgot if it was 1 mil or 2 mil). I figured it out, though, and after taxes he would only get about 30 k per year. 30k is a nice little add on to whatever salary one may get, and it definitely could make life easier but 30k in itself is not enough to quit working with. It may mean more in the bank and a nicer vacation, but it’s not like “yeehaw, we hit pay dirt.”

JLeslie's avatar

@jca I guess it partly depends how old you are when you win it. If I won a million now, I could feasibly coast through until social security if I took all the money at once.

Strauss's avatar

I’d divide it into 3 equal piles…one would be divided up among our kids, the sexons among siblings (mine and my wife’s), and the third would be for my wife and me, for world travel and philanthropy.

PullMyFinger's avatar

As the (slightly modified) song goes…..

I’m Robin Hood
From yonder wood
I steal from the rich, and give to the poor
Which is me

jca's avatar

@JLeslie: The guy who won the lottery has since retired but he was about 50 when he won it (approximately the age you and I are). I calculated if he won 1 million, and it was a 20 year payout, he’d only have about half a million after taxes. So that comes to 25k per year for 20 years. If he won 2 million, that would be 50k for 20 years. That’s all not that much to live on. Like I said, it’s helpful but it’s not like “whoohoo, I never have to work again.” I’m not sure if there are more taxes taken out annually. Even if the taxes aren’t taken out right away but it’s taxed for each payout, if you’re getting 100,000 a year, you’re only taking home about 50k. Maybe a bit more.

JLeslie's avatar

@jca Can you take it all at once? If you get $1 million after taxes even at just 1% a year in a savings account you get $10k in interest per year if my math is right. Or, if you pay off a mortgage it might be better, eliminate that payment in your monthly bills. You still have to work, but maybe you retire younger, or go to part time work.

Or, start using the money, so one million over 15 years is $66k a year, I can live on that, and the balance of the money is still earning money sitting in your bank. Then take social security and use your IRA’s at 65. If you invest the money reasonably hopefully you make 4 or 5% rather than 1%, but I’m just using the very conservative example.

Strauss's avatar

@JLeslie Can you take it all at once?

Most lotteries (especially the state-run lotteries like Powerball and Mega-Millions) allow a one time payout that’s somewhere around 60% of the jackpot, and the top tax bracket in the US is just short of 40%, leaving you with approximately 60% of the payout. So if the $200 mil was the after tax payout, the pre-tax annuity jackpot would have been something like $560,000,000.

jca's avatar

@JLeslie: I could live on 66k a year but it wouldn’t be living large. I make more than that now and we do ok (money for vacations, movies, restaurants, shopping, etc.) but we’re not living extravagantly.

JLeslie's avatar

@jca If it’s true you can only receive 60% of the jackpot if you take it all at once, then the math changes.

$66k certainly isn’t living large in the average suburb, but I can live on it if I didn’t want to work at all. I would still continue working if I received that amount per year doing my part time stuff. My part time brings in about $10k a year. For me, I also already have savings, so coasting through until retirement, I still should have a decent savings at 65, assuming nothing unusual happens, but there is always the possibility something unusual can happen. My husband could work part time to fund his hobbies, but he could stop working full time. I would love that.

@Strauss My example was 2 million after taxes, working with @jca‘s examples of one or two million. I didn’t know about the rule that you don’t get the entire jackpot if you take it at once. $200 million is huge and it I don’t know if I would take it all at once or not if I won it tomorrow, even with the government taking it keeping a bunch. Since I’m married, if I died I guess my husband continues to receive the money if we take it over time. But, if I were single and died year ten, then I assume the money is not inherited by heirs? Is that true? Usually, with things like this I lean towards a bird in the hand is better.

Dutchess_III's avatar

My cousin took it all at once. Out of 90 million she cleared 57 million. They take taxes out of it no matter how you receive it. I’m guessing that they deduct them as they pay them out. If you take a yearly stipend, they deduct it yearly. And taxes never go down, they always go up, so 5 years from now you’ll be paying more on that yearly stipend (but I’m just guessing.) So I think it’s wisest to take it all at once.

And @JLeslie asks a good question…if you take it yearly, and you die before it runs out, does the balance go to your estate to be split among your heirs, or does the state claim it?

JLeslie's avatar

@Dutchess_III So, your cousin got the entire gross amount less the taxes? It wasn’t a smaller amount like @Strauss said? I don’t even see how they can give less than the jackpot? The jackpot is the jackpot. Maybe it’s in the small print.

The races matter if it’s a smaller amount maybe? Like if you get $30k tax free, and that’s almost all your income, the tax bracket is way lower than getting $1 million in one year.

Strauss's avatar

@JLeslie It says that right on the printed ticket. Something like:

Jackpot $555,000,000 paid in 30 year annuity. Cash amount $333,000,000

Dutchess_III's avatar

@JLeslie I said “Out of 90 million she cleared 57 million” 57 million IS smaller than 90 million.

Tropical_Willie's avatar

@Dutchess_III If I remember right from a case many years ago; the family had to pay in full all taxes for the balance of the payout. PAY IN FULL so if the balance of the ticket is 2 Million the family would have to pay (assuming 30% tax bracket) $600,000 for the ticket.

Dutchess_III's avatar

@Tropical_Willie Well, yes. They take it out before they send the balance to them. In my cousin’s case, she paid 33 million out IN FULL. Then they sent the balance to her.
I’m not sure what your post meant there.

Tropical_Willie's avatar

@Dutchess_III If the family inherits the ticket after the original owner passes and the payout was 30 years; they had to prepay all taxes on the balance.

Strauss's avatar

Here is an interesting article on the subject of taxes, annuities, and lump sum payments in regards to the various lotteries.

Dutchess_III's avatar

Oh, I didn’t catch that part. Another reason to take a lump sum up front.
But you would think that a bank could loan them $600,000 and legally have first dibs on the payout to get their money back.

Haven’t read it yet @Strauss, but I can tell you this: The tax on my husband’s base pay is 16%. The tax on his commissions is almost 50%. Not sure under what law they get away with that.

Dutchess_III's avatar

Interesting @Strauss. I honestly think I could be responsible with the money, and invest much of it.

Strauss's avatar

@Dutchess_III The top tax bracket in the US is I’m guessing that the 50% is actually withholding and not actual taxes. Withholding is based on projected annual income based on periodic (weekly, bi-weekly, monthly, etc.) income. Correct me if I’m wrong, but I would guess that you guys get a good amount back at refund time.

Patty_Melt's avatar

I’m a firm believer in taking the lump sum. For one thing, my most costly expenditures would take place right away. After those were out of the way, I could just coast. At that point, investment could do lots more for growth than a simple long term interest rate.

Dutchess_III's avatar

No, not really. About $1,500 @Strauss.

ARE_you_kidding_me's avatar

Always take the lump, that money is worth more now than it will be later.

Patty_Melt's avatar

Look at @Strauss‘s LURVE. Party in meta.

JLeslie's avatar

@Dutchess_III Yeah, but what your cousin cleared could be after taxes, not necessarily a reduced amount because it’s a lump sum. That’s where I wasn’t sure.

Dutchess_III's avatar

Well, sounds about right. About 36%. (Is that right guys?)

Dutchess_III's avatar

Sounds even righter @Strauss.

@jca it jumped up with an ad thing telling me to turn off my ad blocker. I tried to read around it. What I saw was that the tax rate was 39.6%, exactly the amount deducted from my cousin’s win.

jca's avatar

This is what the article said:

Sorry, Powerball hopefuls, but there’s no way you’re walking away with the entire $1.5 billion.

It’s not simply an issue of the odds — although the Multi-State Lottery Association puts the chance of winning the grand prize at 1 in 292.2 million. Or the implications of having to share Wednesday’s record-high pot if there are multiple winners.

It’s the taxes that’ll get you.

Did you buy a ticket?

Not yet but I will today
Total Votes: 31470
Not a Scientific Survey. Results may not total 100% due to rounding.
Of course, the first hit comes even before taxes kick in. That estimated $1.5 billion prize is only if the winner opts to take the winnings in 30 payments over 29 years. If you want the money now in one lump sum, the jackpot is a mere $930 million, a cut of 38 percent.

Next up is the federal tax bill. Lottery winnings are taxed as ordinary income.

“If they win the jackpot, they’re going to be subject to the highest federal tax rate of 39.6 percent,” said Melissa Labant, director of tax advocacy for the American Institute of Certified Public Accountants. “It’s a lot more significant than folks expect.”

Nor are there many workarounds to substantially cut that bill. “You’re not the type of consumer the U.S. government is looking to give a tax break to,” she said.

Carolyn Moore, 72, center, is jubilant after hearing that Powerball jackpot has reached $900 million on the morning of January 08, 2015.
All mine! How to avoid sharing a Powerball win
The U.S. government automatically withholds 25 percent of such large prizes if the winner is a citizen or resident with a Social Security number. For someone choosing the lump sum, that reduces take-home winnings by $232.5 million. Residents who don’t have a Social Security number, or fail to provide one, will have 28 percent withheld and foreigners, 30 percent.
Winners will have to pony up the remaining 14.6 percent in federal taxes come tax time in April 2017. That’s a bill of roughly $135.8 million you don’t want to forget about amid early splurges.

“You definitely need to be planning for cash-flow issues and setting aside that money,” Labant said.

So after federal taxes, you’d be left with about $561.7 million. Not bad!

If you did, how many?

Even more
VOTEVote to see results
Depending on where you live and where you bought the ticket, state and local income taxes further reduce the winnings. “In New York City, you pay federal, state, county and city taxes,” said Susan Bradley, a certified financial planner and founder of the Sudden Money Institute in Palm Beach Gardens, Florida, which helps consumers make the most of such windfalls.

Tallied up, a state and local tax bill could shave as much as another 15 percent — $139.5 million — off the lump sum, she said. That reduces your net winnings to as little as $422.2 million. (Those taxes may not be withheld, so factor that in as another tax bill come due next April.)

The luckiest Powerball winner would be someone who is a resident of Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington or Wyoming — those states participate in Powerball but do not have a personal income tax. California and Pennsylvania also exempt lottery winnings from state income tax if you bought the ticket in state, according to lottery information site

A woman purchases Powerball tickets for the biggest jackpot in history at an estimated $1.3 billion, in South Orange, N.J. on Jan. 10th, 2016.
Powerball jackpot hits $1.4B, largest prize ever
Generosity could result in Powerball winners taking home even less. If you anticipate sharing the prize money, make that agreement before the numbers are drawn (as you would with an office pool), said Labant. Otherwise, the money is a gift rather than income for those recipients, she said — meaning you, the giver, will be the one paying all the income taxes as well as any gift taxes resulting from a substantial split.

Triggering the gift tax is easy to do, with such a big prize. The IRS allows you to gift up to $14,000 per recipient each year, tax-free, with bigger gifts eating away at your lifetime exemption of $5.45 million. (Gifts to a spouse are unlimited.) Exceed that, and the gift tax is a flat 40 percent.

PullMyFinger's avatar

Will I be able to write-off my pets as dependents, same as before….??

MollyMcGuire's avatar

pay the electric bill and get some really fine Belgian chocolates

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