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Lady Luck was present and accounted for when a woman from Sandusky, Ohio, won big in the state’s 50th Anniversary scratch-off game back in June, 2024.
The winner, identified only as Jeanne, dropped to the floor when she realized she’d won a $15 million jackpot from a $50 scratch-off card, according to the Ohio Lottery Commission.
When she took the winning card to the clerk at Friendship #83 in Sandusky, they “both just cried,” Jeanne said in a press release. “There were people in line looking at me like I lost my mind.”
Jeanne had two options for how to claim her enormous prize: she could take an annuity of $600,000 for 25 years (which would total $15 million), or she could take a lump sum of about $7.5 million.
She opted for the $7.5 million cash option, a sum that will actually shrink to around $4.5 million, Moneywise estimates, once she’s paid her federal and state taxes.
That $10.5 million difference between the advertised $15 million prize and her eventual winnings begs the question: Did she throw money down the drain by picking the lump sum?
And what are some smart ways you could put a large cash windfall to good use?
The IRS requires all lottery agencies to withhold 24% of lottery winnings over $5,000 for federal taxes. On Jeanne’s $7.5 million purse, this amounts to tax of $1.8 million.
But as lottery winnings are taxed as ordinary income, a windfall of this size would land Jeanne in the highest federal income tax bracket of 37%, meaning she must progressively pay additional tax until she meets the bracket’s threshold. In the end, her total federal tax bill will land at around $2.73 million.
The Buckeye State also taxes lottery winnings like normal income. Jeanne’s $7.5 million lump sum win would place her firmly in the top state income tax bracket of 3.5% for 2024, which would eat approximately $262,000 from her total.
After all that, Jeanne’s total tax liability related to her win alone comes to about $3 million — meaning she’ll only get to enjoy around $4.5 million from her $50 scratch-off win (which is still a stunning return-on-investment).
With the lump sum, you also have the opportunity (after shelling out your taxes) to invest in growth-oriented assets like stocks and alternative investments like real estate, precious metals and even artwork.
If you’ve had a major windfall like a lottery or inheritance, you may be wondering how to invest it to ensure the best returns and your long-term security.
Becoming an accredited investor will allow you to access investment classes that aren’t open to the average investor, and diversify your portfolio to help ensure long-term growth of your net worth.
Commercial real estate is one asset class open to the accredited investor that can afford a higher minimum investment. Commercial real estate tends to perform well in the long term, and can be a worthwhile investment to maximize your lottery gains or cash windfall.
However, it’s not always easy to find the right strategic bets for your money.
let you take advantage of the hot real estate sector with professionally-vetted commercial real-estate deals for accredited investors.
Private equity firms like First National Realty Partners (FNRP) give accredited investors access to necessity-based commercial real estate — such as grocery stores and health-care facilities.
That means the properties are essential to the local community, often leased by national brands like Kroger, WholeWalmart, and likely to remain desirable.
FNRP has developed relationships with these essential-needs brands and provides insights into the best properties both on and off-market.
Once a deal is closed, FNRP’s team of experts manages all the details, so you can focus on finding more deals you love.
Mogul is a real estate investment platform offering fractional ownership in blue-chip rental properties, which gives investors monthly rental income, real-time appreciation and tax benefits — without the need for a hefty down payment or 3 A.M. tenant calls.
Founded by former Goldman Sachs real estate investors, the team hand-picks the top 1% of single-family rental homes nationwide for you. Simply put, you can invest in institutional quality offerings for a fraction of the usual cost.
Each property undergoes a vetting process, requiring a minimum 12% return even in downside scenarios. Across the board, the platform features an average annual IRR of 18.8%. Their cash-on-cash yields, meanwhile, average between 10 to 12% annually. Offerings often sell out in under three hours, with investments typically ranging between $15,000 and $40,000 per property.
Every investment is secured by real assets, not dependent on the platform’s viability. Each property is held in a standalone Propco LLC, so investors own the property — not the platform. Blockchain-based fractionalization adds a layer of safety, ensuring a permanent, verifiable record of each stake.
Getting started is a quick and easy process. You can sign up for an account and then browse available properties. Once you verify your information with their team, you can invest like a mogul in just a few clicks.
While most Americans are aware of the potential ROI of investing in real estate, few may consider investing in plots of land — especially arable land used for farming.
Even billionaire investors like Bill Gates see the upside of investing in agricultural land, with the Microsoft magnate recently buying up huge swaths of U.S. farmland.
You may not think of fine art as the most the accessible alternative asset. Not everyone has the cash to buy a piece by their favourite big-name artist at an auction or a private sale.
However, fine art tends to be a solid investment over time as its value remains generally more stable compared to market fluctuations.
Until recently, this world was off-limits. Now, with Masterworks, you can buy fractional shares in multimillion-dollar works by icons like Banksy, Picasso and Basquiat. While art can be illiquid and typically requires a long-term hold, it offers unique portfolio diversification.
Masterworks has sold 25 artworks so far, yielding net annualized returns like 14.6%, 17.6%, and 17.8%.*
Moneywise readers can get priority access to diversify with art: Skip the waitlist here
*Past performance is not indicative of future returns. Investing involves risk. See important Regulation A disclosures at Masterworks.com/cd
Jeanne has big plans for her winnings. She wants to pay off her best friend’s mortgage, whom she’s stayed with for the past two years, and she’d love to buy a house in Florida.
But could she have achieved those goals and collected more money in the long-run by taking the annuity prize option?
Read more: Warren Buffett used 8 solid, repeatable money rules to turn $9,800 into a $150B fortune. Start using them today to get rich (and stay rich)’
If Jeanne took the $600,000 per year for 25 years, she would have received the full $15 million prize, eventually. Instead of feeling immediately wealthy, she would have been comfortably rich for years to come.
When a lottery winner chooses the annuity option, they typically pay taxes based on the annual payment (in this case, $600,000) rather than on the total prize amount.
So, Jeanne would be signing up to pay income taxes on $600,000 — plus any other income she earns through working, investments, benefits and so on — for two and a half decades. That would place her in the highest federal and state income tax brackets.
In terms of federal taxes, she would owe around $180,000 on her winnings in 2024, and in state taxes, she would owe about $20,000. This also assumes Jeanne doesn’t reduce her tax liability through various clever strategies and with help from a financial advisor.
If calculations like these on your own income make your head swim, hiring a trusted financial advisor can be the best way to make sense of your finances and feel confident in your financial decisions. Advisor.com can help you find someone that’s right for you.
Advisor.com is an online platform that connects you with vetted financial advisors. Just answer a few quick questions about yourself and your finances, and the platform will match you with experienced financial professionals best suited to help you develop a plan to achieve your money goals, whether that’s buying a house like Jeanne, saving for retirement, or investing in the stock market.
You can view the advisors’ profiles, read past client reviews, and schedule an initial consultation for free, with no obligation to hire.
Once you get over the shock and elation of winning a life-changing windfall, there are many important things to consider. First, you typically have to choose between taking a lump sum or an annuity.
Many people take a lump sum because they want immediate access to the cash to buy big-ticket items like houses or cars — or perhaps, like Jeanne, they want to use it to pay off debts or to help friends and family.
With an annuitized payment, lottery winners can enjoy the security of steady income and peace of mind knowing they can’t blow through it all at once.
It can be worth working with a financial advisor on how to maximize that money stream. For example, you may want to put it to work via tax-advantaged investing accounts, like a 401(k) or a traditional or Roth individual retirement account.
One option to consider is a gold IRA. Gold has historically acted as a hedge against inflation and this retirement account can help you stabilize your finances by allowing you to invest directly in physical precious metals rather than stocks and bonds.
Opening a gold IRA with the help of Goldco allows you to invest in gold and other precious metals in physical forms while also providing the significant tax advantages of an IRA.
With a minimum purchase of $10,000, Goldco offers will match up to 10% of qualified purchases in free silver.
If you’re curious whether this is the right investment to diversify your portfolio, you can download your free gold and silver information guide today.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
