Powerball jackpot reaches $1 billion
The Powerball jackpot has grown to an estimated $1 billion with the next drawing set for December 13, 2025.
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With a $1 billion Powerball jackpot prize at stake, planning is not only wise, it’s necessary.
Wednesday, December 10th’s drawing was the 41st consecutive drawing with no Powerball winner. The next drawing on Saturday, December 13th will match the record for most consecutive drawings in a single jackpot cycle, which was last achieved in September.
If you’re lucky enough to match all five numbers on the Powerball, you’ll have a choice between a $1 billion annuitized prize or a $461.3 million cash lump sum.
No matter which option the winner chooses, advisers say there’s a good chance that the large sum of money will be claimed by fraudsters, friends and family for taxes.
So the first and most important financial advice is: “Don’t shout victory from the rooftops,” Rob Barnett, a financial and investment advisor at Outlook Financial Center in Troy, Ohio, previously told USA TODAY.
“If you’re lucky enough to win the lottery, just keep quiet,” Barnett says. “Be organized and have a plan. If possible, consider going anonymous.”
How much is the jackpot? What are the chances of winning?
Both the $1 billion annuitized award and the $461.3 million lump sum cash payment are pre-tax. If the winner chooses the annuity option, they will receive one immediate payment and 29 annual payments increasing by 5% each year thereafter.
According to Powerball, the current jackpot is the seventh largest in the game’s history and the second to reach $1 billion this year. The last Powerball jackpot was won on Saturday, September 6th, when Lottery players in Missouri and Texas split the $1.787 billion prize.
Although the overall odds of winning the prize are slightly higher at 1 in 24.9, the odds of winning the jackpot of 1 in 292.2 million are considered nearly impossible. You’re at least 250 times more likely to be struck by lightning, AccuWeather reported, citing information from the National Weather Service.
According to Madison Trust Company, a voluntary retirement account company, the odds of being born with this exact version of you are about 1 in 400 trillion.
“That means your own birth is equivalent to winning the Mega Millions jackpot 1.33 million times, so you just might be pretty lucky,” the company said.
What to do if you win the Powerball jackpot
Please lie down for a while and store your ticket in a safe place until you claim your prize. Probably keep it in a safe.
“A winner is not a true legal winner until the lottery ticket is submitted to lottery officials,” said attorney Andrew Stoltman, who has represented six lottery “losers” who lost their winnings to various investment frauds and mismanagement. “If a ticket is lost or damaged, the winner is legally out of luck.”
Powerball warns, “The lottery will never ask you to pay a fee to claim a Powerball prize. If you are asked to pay a fee to claim a prize, you are likely being scammed and you should not share your personal or banking information with these entities.”
Then find a tax accountant, a tax accountant, and later a financial advisor, advised Steve Azzury, owner of Azzulie Financial in Troy, Michigan. “They’re going to work together and come up with a plan.”
This plan describes the payment options available to you.
- pension: There is one instant payment followed by 29 annual payments, each 5% more than the previous.
- lump sum: A one-time payment equal to the entire cash amount in the jackpot prize pool.
Whether you choose a one-off payment or an annuity option depends on your goals, age, lottery rules for beneficiaries to receive payments on an ongoing basis, or whether you’re likely to waste the lump sum.
Mark Steber, Jackson Hewitt’s chief tax officer, said lottery winnings and current and projected earnings are also considerations when considering and discussing payment options.
Azzury said the plan should also include “fall guys.” “It’s a person or an advisor who makes it impossible for you to lend to anyone. They tell people, ‘All your money is tied up in investments, so you can’t use it. We don’t have anything available to help you, and we’re not interested in your project.'”
Because this amount is too large to be covered by Federal Deposit Insurance Corporation (FDIC) insurance, Stoltman said the winnings should be placed in a brokerage account at a major broker-dealer such as Merrill Lynch or Goldman Sachs, and initially invested in short-term U.S. Treasuries until more specific investment decisions are made.
How much do you spend online? And how fast can you get it?
it depends. The complexity of the state and how you “receive” your money will affect how much cash you end up with, but you could see some movement in your bank account within a few weeks, Azouly said. Remember: Billing periods also vary by jurisdiction.
Your state of residence and where you purchased your winning ticket can have a big impact on how much you pay in state taxes, as you’ll likely be pushed into the highest tier of federal taxes.
For example, if you live in California and buy a ticket there, you would pay a 37% federal tax rate, but California doesn’t tax lottery winnings, so you don’t have to pay state taxes, Steber said. That means the Powerball winner won’t have to pay any state taxes.
On the other hand, New York has the highest tax rate on lottery winnings.
Now, if you’re a California resident vacationing in, say, Rhode Island, and decide to buy a lottery ticket there and win, you’ll need to declare your winnings on your federal and California tax returns, and file your non-resident Rhode Island tax return.
While it’s unlikely you’ll have to pay taxes on the same income in two states, the inner workings of tax issues that span multiple states can be complex, Steber said. However, you must claim the Rhode Island tax credit on your California return to avoid being taxed twice.
“This is where a tax professional can really help,” Steber added. “State taxes can be very tricky.”
How to play Powerball
How to play Powerball is easy:
- Buy a $2 ticket wherever tickets are sold.
- Think about which six numbers you would choose.
- For Powerball, select five “white” numbers from 1 to 69 and one “red” number from 1 to 26.
Players can also add “Power Play,” a $1 feature that increases the winnings on all non-jackpot prizes. “Power Play” multipliers can increase your winnings by 2x, 3x, 4x, 5x, or 10x.
If you’re not feeling particularly lucky, or just want to let your computer do the work, you can take advantage of the “Quick Pick” option. All numbers selected in the “Quick Pick” option are computer generated.
To win the jackpot, players must match all five white balls and the red Powerball in any order. Drawings take place every Monday, Wednesday, and Saturday night at 10:59 PM ET. The winnings continue to increase even if no one wins the jackpot.
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Contributed by Medora Lee and Rachel Barber, USA TODAY
