A LOTTERY expert has revealed which payment choice the winners of the staggering $1.8 billion Powerball jackpot must take advantage of.
It comes after two lucky players in Missouri and Texas became overnight billionaires and scooped the Powerball’s second-largest jackpot in history on Saturday night.
The winners of the staggering Powerball windfall has a tricky decision to make – but this is what they should do (stock)[/caption]
A lottery expert told The U.S. Sun how making one key decision will set them up for life, giving them stability and time to adjust to their new wealth (Stock)[/caption]
The $1.79 billion jackpot has an estimated cash value of $820.6 million.
The win broke the Powerball record of 42 consecutive draws since the grand prize was won.
Officials are now hunting for the lucky players who had the following winning numbers on their slips: 11, 23, 44, 61, 62 and Powerball 17.
With such a staggering windfall, a lottery expert has advised what decision the winners must make to make the most of the prize which will be divided between them both.
Every lottery winner who scoops a major prize is immediately confronted with a difficult decision when they go to claim their cash.
They have to choose either the lump sum or the full jackpot amount paid out in annual instalments – this is known as annuity.
“Each ticket holder will have the choice between an annuitized prize of $893.5 million or a lump sum payment of $410.3 million,” Powerball said in a press release.
Regardless of the decision they choose, the winners will not walk away with their full half of the prize.
The cash value of over $410.3 million is before taxes.
From this lump sum around $100 million will be taken off for Federal withholding tax at 24 per cent leaving $310.3 million.
But this is then subject to additional federal taxes at a rate of up to 13 per cent meaning another deduction, this time of around $50 million.
This would leave them each with $260 million if there are no other subtractions such as state and city tax.
The winner in Missouri, for example, will be required to pay a state tax withholding of four per cent on top of the other tax bills.
On the other hand, the winners can get the full share of the $1.8 billion win ($893.5 million) spread over 30 annual payments.
These increase by 5 per cent each year but each instalment is subject to tax changes and inflation.
“Opting for the annuity payment rather than the lump sum is generally advisable,” Andres Vargas Rodriguez from BetUS told The U.S. Sun.
“This option not only offers potential tax advantages but also provides annual payments that increase over 30 years, making it easier to adjust gradually to your new financial situation.”
Despite these benefits, the majority of winners opt for the lump sum where they know all the money they will have and open themselves up to more investment opportunities.
While it is advised to take the reliance on an annual income for financial stability and to ‘adjust’ to new finances – regardless of which payout method they choose, the winner will be taking home a substantial sum that will be difficult to come to terms with.
Aside from this key piece of advice, there are other precautions the winner must take.
The main one is keeping their signed lottery tickets safe and details of their win private.
If not, they open themselves up to legal battles similar to those of Powerball winner Edwin Castro as well as those looking to take advantage of someone who has just come into money.
Winners are advised to immediately surround themselves with a seasoned team of experts including a financial advisor, a lawyer and a tax advisor to tackle all of these issues.
The next Powerball draw will be held on Monday with a fresh jackpot of $20 million.
Top lottery winners in the US
Millions dream of winning the lottery and finding fame and fortune. These are the biggest winners in US lottery history.
- Edwin Castro – $2.04 billion, Powerball, Nov. 8, 2022, in California.
- Theodorus Struyck – $1.765 billion, Powerball, Oct. 11, 2023, in California.
- Unknown winner – $1.602 billion, Mega Millions, Aug. 8, 2023, in Florida.
- Marvin and Mae Acosta from Los Angeles, California, John and Lisa Robinson from Munford, Tennessee, and Maureen Smith and David Kaltschmidt from Melbourne Beach, Florida – $1.586 billion, Powerball, Jan. 13, 2016.
- Unknown winner – $1.537 billion, Mega Millions, Oct. 23, 2018, from South Carolina.
- Unknown winner – he sued the mother of his child to keep his identity hidden – $1.348 billion, Mega Millions, Jan. 13, 2023, from Maine.
- Unknown winner – $1.337 billion, Mega Millions, July 29, 2022, from Illinois.
- Cheng and Duanpen Saephan, and Laiza Liem Chao – $1.326 billion, Powerball, April 7, 2024, from Oregon.
- Rosemary Casarotti – $1.22 billion, Mega Millions, December 27 2024, from California
- Unknown winner – $1.13 billion, Mega Millions, March 26, from New Jersey
