Win the lottery?

 

With this Friday’s LottoMax jackpot up to $70,000,000 everyone has a dream of hitting it big on their mind.

But what would you do if you won? Most people are more concerned with spending it! Depending on where you look, about 70% of lotto winners lose it all. They were more concerned with spending than they were with planning.

Say you made a plan, invested your winnings, and only spent the dividends and interest. Let’s say you got a 4% income stream from this. 4% of $70,000,000 is $2,800,000 or about $230,000 per month.

Taxes due on this income is only $1,063,796 (I say ‘only’ because if $2,800,000 were you salary, you would owe $1,459,910). Now you can spend only $144,000 per month.

I think we could all agree that even with the taxes that would be awesome!

 

But let’s water these numbers down a bit – instead of winning $70 million, let’s say it’s only $2 million.

 

$2,000,000 earning 4% is $80,000. Know how much you would pay in taxes on $80,000 in dividends? The whopping number of $5456. Yes, that was not a typo. Only five thousand four hundred and fifty six dollars. Leaving you the tidy sum of $6212 after tax every month.

 

Think your odds of winning even a $1 million or $2 million dollar lottery are low? Here’s something important to remember – this doesn’t have to be a lotto win.

 

This could be an inheritance, a sale of a business, or a sale of real estate.

A windfall is a windfall.

Make sure you have a plan to keep it.

 

.....But what if you actually win?

RBC Wealth Management is Canada's largest firm. In addition to first-class asset management, we also have:

  • In-house Financial Planners and High Net Worth Specialists
  • Estate & Trust Advisors
  • Wills & Estates Consultants
  • Insurance Planning Specialists

Together with your Portfolio Manager & Investment Advisor, these individuals can help you plan to keep wealth in your family for generations to come.

 

Any questions? Please feel free to reach out to us.

 

 

***These calculations were made in November 2021 and tax rates used were exclusively for dividend income. Individual rates will vary.***