Catching a lucky break is a common dream for the majority of Americans, with 71% saying they’ve bought a lottery ticket, according to Empower research. Though with the odds of hitting a jackpot around 1 in 292.2 million (or slimmer), getting lucky may be more of a financial fantasy.¹

A more realistic move is to be savvy with any financial boon that could come your way, such as cash gifts, a tax refund or the bonus that 65% of American workers receive each year.

Half of U.S. employees say they get between $500 and $5,000 for that annual bonus. Having a plan in place now can help your money work for you moving forward.

Check out these strategies whether you’re looking at a windfall of $500, $5,000, $50,000 – or anywhere in between.

$500: Kickstart a money goal

While financial gains can be a pleasant surprise, unexpected costs can be a shock to the wallet. Almost 2 in 5 Americans (37%) say they can’t afford an emergency expense over $400, so saving up the $500 could go a long way in building a savings account for sudden charges.

Harnessing the power of compound interest can help $500 have more purchasing power down the line. After a yearslong battle to balance post-pandemic inflation, the Federal Reserve cut interest rates in mid-September, lowering the benchmark federal funds rate to a range between 4.75% and 5%.²

But changes to high-yield savings options didn’t see a dip the day of the announcement: Consumers could still open certificates of deposit earning up to 5.25%.³ With CDs offering terms that range from months to years, locking in a higher annual percentage yield now will help your $500 savings grow even as financial institutions adjust.

Using money close to home is another option to leverage a windfall. Empower research found that the average car payment in the U.S. is $451.89. Using $500 to make an extra payment toward a car loan or other type of debt can lower the principal, or outstanding balance. Read the fine print and watch out for any prepayment penalties on the loan; they can change how much difference $500 can make.

$5,000: Help your money grow

More than half of Americans (51%) think a windfall of $5,000 would be enough to improve their financial outlook for two to five months. For those looking to get more mileage from the influx of cash, a few investment strategies could help stretch the dollars.

Over the first six months of 2024, the S&P 500 index jumped more than 14%.⁴ And consumers are seeing the power that investing in the market can have on their wealth: Millennials and Gen Zers hold more than 40% of their assets in U.S. stocks, according to Empower data. An index fund that acts like basket of securities can give both new and experienced investors a way to gain exposure to many companies with a single buy.

Using $5,000 to pay it forward could help others as well as “future you” come tax time. Charitable giving in the U.S. topped $557 billion in 2023,⁵ and setting money aside for that use may get an extra boost. Investments that have appreciated in value from when you purchased them and held long-term can be donated, and capital gains tax is not assessed on the gain donated to a qualified charity.

Another tax-advantaged option focuses on having your quick windfall play a long-term role as retirement savings. Both traditional and Roth IRAs have a limit of $7,000 in contributions for 2024 ($8,000 if you’re age 50 or older), so $5,000 can serve as a hefty deposit toward that maximum. Figuring out which type of IRA is best for you can ease the process of opening a new account.

$50,000: Protect your money for the future

Whether a larger windfall comes in the form of a one-time payment or incremental earnings, thinking about the big picture of your future could maximize $50,000 for the long term.

Federal Reserve data shows that, on average, American households inherit $58,000. Empower research found that a third of Americans (32%) plan to leave an inheritance, even if it’s small, so $50,000 could serve as that nest egg to pass down. Setting up a trust fund to house the money can help protect your family’s wealth as part of a wider estate plan. 

For those interested in putting the cash toward a reliable income stream in retirement, annuities are insurance contracts that are designed to provide guaranteed income. However, the types of annuities can vary, so research is key, as with any retirement income strategy.

Thousands of dollars may not fall into your lap all at once – such as through a raise at work that adds up over time. So one straightforward way to bump up your earning potential is to consider maxing out a workplace retirement account like a 401(k). The 2024 contribution limit for 401(k) plans is $23,000, so you’d be nearly halfway toward using a $50,000 windfall by allocating the money in your paychecks to contribute fully to the plan. 

Taking chances, making changes

People can dare to dream about a big payday, and while getting a boost of cash can be exciting in itself, using smart ways to increase its force on your finances could mean the difference between “making it work” and “making it.”