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What Really Happens to Lottery Winners? The Stories and the Data

Real stories of jackpot winners who thrived and who struggled, what research says about winners' lives, and why the '70% go broke' stat is unsupported.

Jackpot Dreaming EditorialUpdated 7 min read

Painterly illustration of a cream stone path that forks, one branch winding into a golden sunlit meadow sparkling with confetti, the other curving into a deep red twilight forest

Every time a jackpot passes half a billion dollars, the "lottery curse" stories come back. Some of them are true. But the full picture, drawn from court records, obituaries and some impressively large datasets, is more nuanced and more useful.

First, the "70% go broke" myth

You've probably read that 70% of lottery winners go bankrupt within a few years. It's usually credited to the National Endowment for Financial Education (NEFE).

In January 2018, NEFE put out a statement saying the figure "is not backed by research from NEFE, nor can it be confirmed by the organization." It says the number was probably mentioned by one participant at a 2001 think tank on financial windfalls, "independently and without verification," and then took on a life of its own through repeated reporting.

So treat any article built on that number with suspicion. The real research is more interesting.

Cautionary tale: Jack Whittaker

On Christmas Day 2002, Andrew "Jack" Whittaker Jr., a West Virginia contractor, won what was then the largest jackpot ever won on a single U.S. ticket: $314.9 million in Powerball. He took the cash option, about $113 million after taxes.

He wasn't a struggling man looking for a lifeline. He already ran a construction company and was reportedly worth more than $17 million. He pledged 10% of his winnings to churches and put $14 million into a foundation that provided food and clothing to low-income families in West Virginia.

The years that followed were brutal. In August 2003, thieves took $545,000 in cash from his car while it was parked at a strip club. When asked why he carried that much cash, he reportedly said, "Because I can." Lawsuits, arrests and a casino dispute followed. In 2004, his 17-year-old granddaughter, Brandi Bragg, was found dead. Her cause of death was listed as undetermined, and cocaine and methadone were found in her system. Whittaker died in 2020 at age 72; The New York Times headlined his obituary "Ill-Fated Powerball Winner."

The lesson: Prior business success didn't protect him. Visibility, carrying large amounts of cash, and a wide circle of people with access to his money all added up to risk.

Cautionary tale: Abraham Shakespeare

Abraham Shakespeare was working as an assistant truck driver for about $8 an hour when he won a $30 million Florida Lottery jackpot in 2006. He took a lump sum of roughly $17 million before taxes. According to court documents reported by the AP, he started handing out cash within days of the win.

In 2009 he disappeared. In early 2010, his body was found under a concrete slab behind the home of a woman who had befriended him. In December 2012, a jury convicted that woman, Dorice "DeeDee" Moore, of first-degree murder. Prosecutors said she had taken nearly all of his money. The judge called her "cold, calculating and cruel" and sentenced her to life without parole. "She got every bit of his money," the prosecutor told jurors.

The lesson: The most dangerous person may be the one who offers to "help manage" the money. Control of your finances should sit with licensed professionals you choose and can fire, with oversight built in.

Quiet success: Tom Crist

In May 2013, Calgary retiree Tom Crist was golfing in Palm Springs when he got the call: he'd won $40 million in Canada's Lotto Max. He kept it secret for months, even from his kids.

Crist had lost his wife of 33 years, Jan, to cancer the year before. "I've done enough that I can look after myself, for my kids," he told CBC News in December 2013. "I don't really need that money." He announced that the whole prize would go to charity through a family trust, with cancer causes at the top of the list.

The lesson: A clear sense of purpose before the money arrives, plus a structure like a trust or foundation, can turn a windfall into a legacy rather than a burden.

Quiet success: Colin and Chris Weir

Scottish couple Colin and Chris Weir won £161 million on EuroMillions in 2011, then one of Europe's biggest jackpots. In 2013 they set up the Weir Charitable Trust, which supports health, sport, culture and animal welfare in Scotland. Colin, a lifelong fan of Partick Thistle Football Club, funded its youth academy and later took a majority stake, announcing plans to hand ownership to a fans' group. The couple divorced in 2019, and Colin died that December at 71. The BBC described his legacy largely through the club and his philanthropy.

The lesson: A good outcome doesn't mean a fairy tale. But the money funded things that outlasted the headlines.

What the research actually says

Anecdotes are vivid, but they suffer from selection bias: disasters make the news and quiet stability doesn't. Researchers have used lotteries as a natural experiment, since winners are randomly chosen, to study what sudden wealth really does.

Bankruptcy: often delayed, not avoided

Economists Scott Hankins, Mark Hoekstra and Paige Marta Skiba studied Florida Fantasy 5 winners, published in the Review of Economics and Statistics (2011). Winners of $50,000 to $150,000 were about half as likely to file for bankruptcy in the first two years as people who won small prizes. But their bankruptcy rates rose in years three to five, and over five years they were no less likely to file. The windfall postponed financial distress rather than preventing it. Keep in mind these were moderate prizes, not nine-figure jackpots.

Happiness: life satisfaction rises, and lasts

Erik Lindqvist, Robert Östling and David Cesarini tracked Swedish lottery players and published the results in the Review of Economic Studies (2020). Large prizes produced sustained increases in overall life satisfaction, still visible 5 to 22 years after winning, with no sign of fading. The gains were largest in satisfaction with finances. Effects on day-to-day happiness and mental health were small and not statistically significant.

That challenges a famous 1978 study by Philip Brickman and colleagues, which found that lottery winners weren't much happier than others. It was a small sample, though, and the Swedish data is far larger and covers far longer.

Work and spending: people adjust, but don't vanish

Using U.S. tax records on lottery winners, Mikhail Golosov and co-authors reported in the Quarterly Journal of Economics (2024) that each extra $100 in winnings reduced annual household earnings by about $2.30. Winners worked somewhat less, and some retired earlier. Most didn't stop working entirely.

The lessons, distilled

  1. Make a plan before you claim. This year's $1.04 billion Powerball winner in Illinois spent weeks with legal and financial advisors before coming forward.
  2. Stay as private as the law allows. Visibility brought requests, and worse, to both Whittaker and Shakespeare. (See our trusts and LLCs guide.)
  3. Hire fiduciaries, not friends. Use licensed, fee-only advisors with real oversight.
  4. Decide on your "why." Crist and the Weirs had clear goals for the money.
  5. Know your real number. Withholding isn't the final tax bill. Try the Jackpot Dreaming calculator to see what you'd actually keep, and read lump sum or annuity? if you're worried about your own discipline. The annuity's yearly checks are a built-in guardrail.

FAQ

Is it true that 70% of lottery winners go broke?

There's no reliable evidence for it. NEFE, the group usually cited, said in 2018 that the figure isn't backed by its research and can't be confirmed.

Are lottery winners happier?

Swedish research published in 2020 found that large winners reported higher life satisfaction for decades. Effects on everyday happiness and mental health were small.

Do lottery winners stop working?

Some reduce their hours or retire early, but most keep working. U.S. data suggest household earnings drop about $2.30 per year for each $100 won.

What's the most important thing to do after winning?

Before claiming, assemble a team, including a tax professional, an estate attorney and a fee-only advisor, and make a written plan, including setting money aside for taxes beyond what's withheld.

Sources

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