The Powerball jackpot climbed to an estimated $748 million ahead of Monday night’s drawing, putting the prize among the largest in the game’s history and prompting financial advisors to urge would-be winners to think carefully before claiming a ticket.
The jackpot, which carried a cash option of $325.1 million, ranked among the top 10 largest in Powerball’s history heading into Monday’s drawing, the largest since a $1.817 billion prize was won in Arkansas on Christmas Eve.
Monday’s winning numbers
The winning numbers drawn Monday night were 8, 30, 41, 48 and 54, with a Powerball number of 4. The Power Play multiplier was 2. No ticket matched all six numbers, meaning the jackpot will roll over to Wednesday’s drawing, when the prize is expected to grow even larger.
Powerball drawings are held every Monday, Wednesday and Saturday at 10:59 p.m. ET, broadcast live from the Florida Lottery’s draw studio in Tallahassee and streamed on Powerball.com. The jackpot was last won in May, when two tickets, one sold in Florida and one in Texas, split a $20 million prize.
The odds, and the advice, for anyone hoping to win
Odds of matching all five white balls and the red Powerball number stand at 1 in 292.2 million, considerably longer than the odds of being struck by lightning. Still, with hundreds of millions of dollars on the line, financial experts say anyone holding a winning ticket should have a plan ready well before they ever consider stepping forward to claim it.
The first piece of advice from experts is simple: stay quiet. “Don’t shout your win from the rooftop,” said Rob Burnette, a financial and investment advisor at Outlook Financial Center in Troy, Ohio, who has previously spoken with USA TODAY about lottery windfalls. Burnette said winners should get organized, make a plan and consider remaining anonymous if their state allows it.
Securing the ticket comes first
Before any spending decisions are made, experts stress that protecting the physical ticket is the single most important step. Andrew Stoltmann, an attorney who has represented lottery winners who lost their prizes due to scams or mismanagement, said the win isn’t legally secure until it’s formally claimed. “The winner is not a true legal winner until the ticket is presented to lottery officials,” Stoltmann said, warning that a lost or destroyed ticket leaves a winner with no legal recourse.
Once a ticket is secured, typically in a safe or similarly protected location, experts recommend assembling a team of professionals before visiting state lottery headquarters to claim the prize. Steve Azoury, owner of Azoury Financial in Troy, Michigan, said winners should bring on a tax attorney, a tax accountant and a financial advisor to help map out next steps. Those professionals, Azoury said, “will work hand in hand to figure out (a) plan.”
Weighing lump sum versus annuity
One of the biggest early decisions facing any jackpot winner is how to collect the money. Powerball offers two options: an annuity, consisting of an immediate payment followed by 29 annual installments that each grow 5% larger than the last, or a lump sum, a single payment equal to the total cash value of the jackpot.
Which option makes more sense depends heavily on a winner’s individual circumstances, including age, financial goals and how lottery rules handle payments to beneficiaries if the winner dies before the annuity is fully paid out. Mark Steber, chief tax officer at Jackson Hewitt, said the size of the jackpot along with a winner’s current and projected earnings should factor into that decision.
Guarding against requests for money
Experts also warn that sudden wealth tends to attract requests for loans and financial help from friends, family members and strangers alike. Azoury recommends winners designate what he calls a “fall guy,” someone whose job is to field and decline those requests on the winner’s behalf so the winner isn’t placed in the position of saying no directly. That person, Azoury said, “keeps you from giving loans to anybody,” directing people instead toward the explanation that funds are tied up in investments.
Because a jackpot of this size far exceeds the coverage limits of Federal Deposit Insurance Corporation protection, Stoltmann recommends winners deposit their winnings with a major brokerage firm, such as Merrill Lynch or Goldman Sachs, and initially park the funds in short-term U.S. Treasuries until a more detailed investment strategy is worked out.
Taxes can get complicated fast
Jackpot winners are almost certain to land in the highest federal tax bracket, and where a ticket is purchased, along with where the winner lives, can significantly affect their final tax bill. A California resident who buys and wins with a ticket in California, for example, would pay the 37% federal tax rate but owe no state tax, since California doesn’t tax lottery winnings. New York, by contrast, has the highest state tax rate on lottery winnings in the country.
Multi-state situations can complicate matters further. A California resident who buys a winning ticket while visiting another state would need to report the winnings on both federal and California tax returns, plus file a nonresident return in the state where the ticket was purchased, though a tax credit typically prevents the winner from being taxed twice on the same income. Steber said navigating those rules is best left to a professional, noting simply, “State taxes can be very tricky.”
How to play, and what’s next
Powerball tickets cost $2 and require players to select five white numbers between 1 and 69, along with one red Powerball number between 1 and 26. Players can also add the optional Power Play feature for an additional $1, which multiplies most non-jackpot prizes by two, three, four, five or 10 times. Players unsure of their picks can opt for a computer-generated Quick Pick ticket instead.
With no winner Monday night, the jackpot rolls over to Wednesday’s drawing, when the estimated prize is expected to climb even higher, giving players another shot at what remains one of the largest jackpots in Powerball history.
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