The Powerball jackpot would have jumped to an estimated $543 million if there was no winner in Saturday night’s drawing.
This is the fourth Powerball jackpot to exceed $500 million in 2023, with two options for the grand prize: a one-time payment of $272.2 million or an annuitized payment of $543 million. Both options are pre-tax estimates.
“Virtually everyone who wins the lottery elects to take a lump sum distribution,” said Andrew Stoltman, a Chicago-based attorney who represents several lottery winners. “And I think that’s a mistake.”
Pensions are often a better option because “the typical lottery winner doesn’t have the infrastructure in place to put that kind of money to work quickly,” he said.
The typical lottery winner doesn’t have the infrastructure to manage such large sums of money right away.
Andrew Stoltman
lawyer
Stoltman said the annuity protects winners from financial mistakes in their first, second and third years, while keeping the majority of their earnings safe.
“Flexibility and control over your assets is a great thing, but it’s not necessarily for everyone,” says John Lloyd, a certified financial planner and registered agent and owner of The Wealth Planner in Fort Worth, Texas. ” he says.
He said a lump-sum payment could be a good financial move for some winners, while others may benefit from guardrails on spending with annuitized payments.
However, some winners may later decide to sell their annuity to a third party company for a lump sum payment. “The problem is they’re not getting the best return for what they’re getting in return,” Lloyd warned.
Monday’s Powerball drawing came nearly two months after a single ticket sold in California won the game’s $1.765 billion jackpot. Meanwhile, the Mega Millions jackpot will set him back $41 million, and the odds of winning the prize are approximately 1 in 302 million.