How Much Is the Powerball Jackpot? What to Do If You Win

The Powerball Jackpot and What to Do If You Win

If you become the sole winner of the $1.8 billion Powerball jackpot, it's a life-changing event. However, with such an immense amount of money comes a significant responsibility. Experts suggest that the first step is not to celebrate publicly but to take immediate steps to protect your winnings.

The Powerball drawing on Wednesday, Sept. 3 marked the 41st straight drawing without a winner. The next drawing will take place on Saturday, Sept. 6, at 10:59 p.m. ET. If someone matches all five numbers and the Powerball, they will have the option between an annuitized prize of $1.8 billion or a lump sum cash payment of $826.4 million. These amounts are before taxes, so the actual take-home amount will be significantly less.

Understanding the Odds and the Jackpot

The odds of winning the Powerball jackpot are currently about 1 in 292.2 million. To put this into perspective, the National Weather Service states that you're 250 times more likely to be struck by lightning than to win the lottery. However, the odds of being born as yourself are around 1 in 400 trillion, making it an incredibly rare event.

Powerball drawings occur three times a week—on Mondays, Wednesdays, and Saturdays at 10:59 p.m. ET. The current jackpot is the second-largest in the game’s history, with the largest being $2.04 billion won in California in November 2022.

Why Keeping It Quiet Is Important

Winning the lottery can attract a lot of attention, which can lead to potential scams and financial exploitation. Scammers, friends, and family members may approach the winner with offers for investments or loans. Financial advisers recommend keeping the win private and avoiding public announcements.

Experts like Rob Burnette, a financial adviser, emphasize the importance of staying quiet and creating a plan. "Don’t shout your win from the rooftop," he said. "Get organized and make a plan. Consider staying anonymous if possible."

Steps to Take After Winning

If you win, the first thing to do is secure your ticket. "The winner is not a true legal winner until the ticket is presented to lottery officials," said attorney Andrew Stoltmann. Losing or destroying the ticket means losing the chance to claim the prize.

Next, it's essential to consult with professionals. A tax attorney, accountant, and financial adviser should be involved immediately. They will help determine the best payout option—either the annuity or the lump sum. The annuity provides an initial payment followed by 29 annual payments that increase by 5% each year. The lump sum is a one-time payment equal to the total cash in the jackpot pool.

Additionally, having a "fall guy" is crucial. This person or adviser helps prevent the winner from giving out loans or supporting projects. The winnings should also be deposited in a brokerage account of a major broker-dealer, like Merrill Lynch or Goldman Sachs, and initially invested in short-term U.S. Treasuries.

Choosing Between Lump Sum and Installments

Deciding between the lump sum and installments depends on personal goals, age, and financial planning. Some experts, like Mark Steber, chief tax officer at Jackson Hewitt, suggest considering the size of the winning and future earnings potential. However, attorney Andrew Stoltmann advises taking the winnings in installments. "Over 90% of winners take the immediate lump sum, but it is best not to take it, at least at first," he said. Spreading the payments allows the winner to learn investment lessons over time.

Tax Implications and State Laws

The amount of tax owed depends on the payout choice and state laws. Most winners will be propelled into the highest federal tax bracket. For example, a California resident who buys a ticket there won't pay state taxes on the winnings, but a New York resident might face the highest tax rate.

Multi-state tax issues can be complex. If a California resident wins while vacationing in Rhode Island, they must file a non-resident Rhode Island tax return and claim a credit on their California return to avoid double taxation.

Claiming Your Prize

Once the prize is claimed, it typically takes a couple of weeks to receive the funds. However, most winners take time to create a plan. Claim periods vary by jurisdiction, so it's important to check with the lottery in the state where the ticket was purchased.

Buying Lottery Tickets

Lottery tickets can be purchased in-person at gas stations, convenience stores, and grocery stores. Online options are available through platforms like Jackpocket, which is the official digital lottery courier of the USA TODAY Network. Jackpocket allows users to purchase tickets in several U.S. states, including Arizona, Arkansas, Colorado, and others.

It's important to note that online lottery services have specific age requirements and terms of service. Always ensure you meet the legal age and understand the rules before purchasing tickets.