The $1 Million Windfall: What Should You Do?
In March of 2020, an Iowa security guard named Shane Saxen, 31, collected $1 million for five matching numbers on a Powerball ticket. When asked what he planned to do with the windfall, Saxen said he'd save it for retirement. That's not the sexiest answer you'll hear from a lottery winner, but it is a wise choice.
Here's why. If Saxen plans to retire at age 62, he has 31 years to benefit from compound earnings on his winnings. Let's say he walks away with about $551,000 after paying taxes and taking the lumpsum prize upfront. Invest that sum at a 7% average annual return for 31 years, and it grows to nearly $4.8 million before taxes. And that number sounds a lot more exciting than $551,000.
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Source Fool.com
