Depends on how much you one.
Those powerball winners could quit...but a typical lotto winning in Texas is not worth quitting your job over.
Basically...if you were to win a $10mil jackpot, you'd realistically only see 5 mil after taxes for a lump sum. Then you'd have to learn how to handle that amount of cash. I don't see how taxes after the initial lump sum would be a problem since you can't be taxed on it again after a year since it's not an earned income.
But, unless you make that money work for you, most people will go into a spending craze and deplete it quickly.
Steps should you win the lottery:
1.) Don't go crazy. Money is water.
- Ooooh....a shiney $5 million...$1million house...few sports cars...overzealous donations...and you're broke
2.) ALWAYS CHOOSE LUMP SUM
-This is not debatable, you will end up with more money after 20 years even with half of what you started. Should you even put it into a regular savings at 2%, you will end up with ~7.5 mil after 20 years.
Should you invest wisely and push closer to 10% APR, you will end up with ~34mil after 20 years.
3.) Learn how to invest or find someone who knows how to.
- This applies to step one. Make money work for you. Just because you start out with 5mill does not mean you can't get more. The more money you have, the more money you can make.
4.) If you're afraid of investments or do not trust anyone enough with your account, at least invest a minimum of 20% of your winnings in some sort of investment and put the rest in a protected savings account.
- If you are afraid of taking risks, the plain and simple truth is you have to. Take baby steps. 20% is a decent amount to start and work with to get you accustomed to investing. You can gain a lot with a million and if you lose it...you'll have it back with no work in about 10 years. You will end up paying taxes on any extra money made off investment earnings. It counts as an earned income.
Tax brackets are based off annual income, not savings.
5.) Allocate and budget how you spend your winning yearly.
- This is probably the most important step. What's the point of having money if you can't spend it? The truth is you should, but not in excess. It's just like your income...except it's not renewable if you don't make it work for you. Money will dissapear if you don't keep track of it.