Winning the lottery is a dream come true for many, but for one Massachusetts man, that dream came with an unexpected twist. Michael Koldys from Sheffield experienced a moment of pure luck when he scratched a $20 ticket in the $5,000,000 100X Cashword game and discovered he had won $1 million. However, his decision on how to claim the prize cost him a significant chunk of his winnings.
The Lucky Break
Koldys was the second person in a week to win the $1 million prize in this popular lottery game. Like every lottery winner, he faced a choice: take the full amount in installments over time or accept a one-time lump-sum payment. He opted for the latter, taking home $650,000 before taxes—a decision that left more than $300,000 of his winnings on the table.
Despite this loss, Koldys remained upbeat. He revealed plans to buy a new boat, save for retirement, and have fun with his windfall. Additionally, Silk’s Variety, the store that sold him the winning ticket, will receive a $10,000 bonus for their role in his lucky day.
The Lump Sum vs. Installments Debate
When it comes to lottery winnings, financial experts often warn against taking the lump sum. Investment fraud attorney Andrew Stoltmann explained the rationale behind this advice:
“The reason for that is because the average lottery winner comes from a socioeconomic background where they usually don’t have the infrastructure set up to handle a massive $100 million+ payout,” Stoltmann told CNBC Select.
He also noted that spreading payments over 25 years offers a safety net.
“If you take the distributions over 25 years, you can make those common mistakes the first couple of years and still have most of the money left over,” he added.
How to Handle Lottery Winnings Wisely
For those lucky enough to strike it rich, managing the sudden influx of money can be daunting. Financial experts stress the importance of careful planning.
Key Tips for Lottery Winners
- Keep the News Quiet
Sharing your winnings can lead to unexpected demands from others. Keep your good fortune private to avoid unnecessary pressure. - Assemble a Financial Team
Consult a financial advisor, a certified public accountant (CPA), and a lawyer to manage your wealth effectively and avoid costly mistakes. - Consider the Annuity Option
Wealth advisor Robert Pagliarini shared this advice with The U.S. Sun:”Lotto winners would be far better off if they chose the annuity. If you take the lump sum, you have to realize that if you start making mistakes, or bad investments, there’s no do-over, it’s not like you are going to win the lottery again. You have one shot at this.” - Plan for Long-Term Security
Use your winnings to invest wisely, start a business, or secure your future through retirement savings.
Final Thoughts
While Michael Koldys’ decision to take the lump sum reduced his total payout, his positive attitude and plans for the future reflect a practical approach to his newfound wealth. For future winners, seeking expert advice and carefully weighing payout options could make all the difference between a fleeting windfall and lifelong financial security.
What Would You Do?
How would you manage a lottery jackpot? Would you take the lump sum or opt for installments? Share your thoughts in the comments below!
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