{"id":6117,"date":"2024-10-11T16:24:12","date_gmt":"2024-10-11T16:24:12","guid":{"rendered":"https:\/\/finderica.com\/how-much-do-you-really-get-if-you-win-the-powerball\/"},"modified":"2024-10-11T16:24:12","modified_gmt":"2024-10-11T16:24:12","slug":"how-much-do-you-really-get-if-you-win-the-powerball","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=6117","title":{"rendered":"How Much Do You Really Get if You Win the Powerball?"},"content":{"rendered":"\n
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\n The Powerball jackpot amount is shown on displays at Bluebird Liquor in Hawthorne, Calif., Wednesday, Nov. 2, 2022. Jae C. Hong\/AP Photo <\/span>\n <\/p>\n<\/p><\/div>\n<\/p><\/div>\n

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So, who wants to be a billionaire?<\/p>\n

There have been 38 Powerball drawings in a row with no grand prize winner, so Wednesday night\u2019s jackpot has ballooned to $1 billion. It\u2019s the third-largest Powerball jackpot in history.<\/p>\n

Now, as professional Penny Hoarders, we generally advise against spending your hard-earned money on lottery tickets. (Invest it instead!) Your chances of winning Powerball are 1 in 292 million, which is lower than your chances of being struck by lightning \u2014 twice.<\/p>\n

But it\u2019s still fun to think about, isn\u2019t it? We all deserve to dream a little, and a tidy $1 billion would go a long way toward clearing up any pesky little financial problems you might have.<\/p>\n

How much of those winnings would you actually get, though?<\/p>\n

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Swipe Like a Millionaire\u00a0\u2014 No Gold Card Required<\/h3>\n

Ever wondered how millionaires get to be\u2026 millionaires? Us, too. So we looked into it.<\/p>\n

What we found are\u00a0simple, millionaire-approved tips<\/a>\u00a0that anyone can use to manage their money.<\/p>\n<\/div>\n

How Much of That $1 Billion Would You Take Home?<\/h2>\n

Let\u2019s say you win. (It is<\/i> fun to think about, after all.)<\/p>\n

First you\u2019d have to choose whether to collect your winnings in 30 annual payments over three decades, or take a smaller lump-sum payment, which in this case would be $516.8 million, according to Powerball administrators<\/a>.<\/p>\n

Then there are taxes. (There are always taxes.)<\/p>\n

If you took the lump sum, you\u2019d immediately get hit with federal taxes of 24% that\u2019s collected on any prize exceeding $5,000 \u2014 so that\u2019s $124 million right off the top. You\u2019d also owe more when you file your income taxes next year since you\u2019d be in the top tax bracket \u2014 so 37%, or about $67 million, according to popular lottery news websites like USA Mega<\/a> and others.<\/p>\n

That brings your theoretical winnings to about $326 million. You\u2019d also pay state taxes. How much obviously depends on which state you\u2019re in. That could drop your winnings down to as low as $269 million.<\/p>\n

If you chose the annual payments option, your $1 billion jackpot would get split into 30 payments that averaged out to $33.3 million each. Those would be subject to an immediate 24% federal tax, plus the 37% income tax each year, so you\u2019d be getting a little over $21 million per year. After 30 years, you\u2019d have collected between $522 million and $631 million, depending on what you\u2019re paying in state taxes.<\/p>\n

Which to choose? Financial advisers always say it depends on your age, your goals and various tax reasons, and blah blah blah<\/i>.<\/p>\n

But realistically, nearly everyone takes the one-time cash payment. Seriously, almost everyone. Simply put, you can earn more over time by investing the lump sum, and nobody wants to wait 30 years to collect all their money.<\/p>\n

You\u2019ve Won Powerball. What Now?<\/h2>\n

No matter how you count it, a $1 billion grand prize is certainly a lot. The biggest Powerball jackpot ever was the $2.04 billion prize won last year.<\/p>\n

Even if you took the lump sum and paid taxes on it, the $325 million you\u2019d have left is still no chump change.<\/p>\n

If you won, financial advisers would strongly recommend that you get a tax attorney and a tax accountant and make a plan before you collect your winnings. You\u2019d have 90 days to a year to claim your jackpot, depending on where you bought the winning ticket.<\/p>\n

They also recommend that you employ someone whose job it is to say \u201cNO\u201d to everyone and their brother who\u2019ll suddenly want you to invest in their once-in-a-lifetime business opportunity, their newly invented revolutionary gizmo, their super-sweet NFTs or their miscellaneous harebrained scheme.<\/p>\n

Powerball is played in 45 states, as well as Washington, D.C., Puerto Rico and the U.S. Virgin Islands.<\/p>\n

If a lucky winner claims the $1 billion grand prize in Wednesday night\u2019s drawing, the next Powerball jackpot automatically drops back down to a mere $20 million \u2014 practically pennies in comparison, right?<\/p>\n

So think about it. Powerball tickets cost $2. Maybe spend a little money on that dream.<\/p>\n

Or you could, you know, invest it.<\/p>\n

Mike Brassfield ([email\u00a0protected]) is a senior writer at The SS.<\/i><\/p>\n

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