More from The Sun
Regardless of the decision they make, the winner will not walk away with the full prize – see what they will get
A LOTTERY expert has revealed which payment choice the winners of the staggering $1.8 billion Powerball jackpot must take advantage of.
It comes after two lucky players in Missouri and Texas became overnight billionaires and scooped the Powerball’s second-largest jackpot in history on Saturday night.
Please provide a valid email.
Your info will be used in accordance with our Privacy Policy
You'll now receive top stories, breaking news, and more, straight to your email.
The $1.79 billion jackpot has an estimated cash value of $820.6 million.
The win broke the Powerball record of 42 consecutive draws since the grand prize was won.
Officials are now hunting for the lucky players who had the following winning numbers on their slips: 11, 23, 44, 61, 62 and Powerball 17.
With such a staggering windfall, a lottery expert has advised what decision the winners must make to make the most of the prize which will be divided between them both.
read more on lottery wins
LUCKY DAY?
Lottery expert's tips to scoop $1bn Powerball tonight & the numbers to avoid
A LOTTO STRATEGY
Couple who won $1m lottery scratchcard told to use 'bite' strategy
Every lottery winner who scoops a major prize is immediately confronted with a difficult decision when they go to claim their cash.
They have to choose either the lump sum or the full jackpot amount paid out in annual instalments – this is known as annuity.
“Each ticket holder will have the choice between an annuitized prize of $893.5 million or a lump sum payment of $410.3 million,” Powerball said in a press release.
Regardless of the decision they choose, the winners will not walk away with their full half of the prize.
Aldi, Costco & Walmart closing for 24 hours in weeks – and Sam's Club won't help
Walmart, Target & Kroger to face fines under new 'conspicuous pricing' rule
Costco confirms return policy for holiday season – see what is non-refundable
Costco members rage as retailer drops another fan-favorite Kirkland product
The cash value of over $410.3 million is before taxes.
From this lump sum around $100 million will be taken off for Federal withholding tax at 24 per cent leaving $310.3 million.
But this is then subject to additional federal taxes at a rate of up to 13 per cent meaning another deduction, this time of around $50 million.
This would leave them each with $260 million if there are no other subtractions such as state and city tax.
The winner in Missouri, for example, will be required to pay a state tax withholding of four per cent on top of the other tax bills.
On the other hand, the winners can get the full share of the $1.8 billion win ($893.5 million) spread over 30 annual payments.
These increase by 5 per cent each year but each instalment is subject to tax changes and inflation.
“Opting for the annuity payment rather than the lump sum is generally advisable,” Andres Vargas Rodriguez from BetUS told The U.S. Sun.
“This option not only offers potential tax advantages but also provides annual payments that increase over 30 years, making it easier to adjust gradually to your new financial situation.”
Despite these benefits, the majority of winners opt for the lump sum where they know all the money they will have and open themselves up to more investment opportunities.
While it is advised to take the reliance on an annual income for financial stability and to ‘adjust’ to new finances – regardless of which payout method they choose, the winner will be taking home a substantial sum that will be difficult to come to terms with.
Aside from this key piece of advice, there are other precautions the winner must take.
The main one is keeping their signed lottery tickets safe and details of their win private.
If not, they open themselves up to legal battles similar to those of Powerball winner Edwin Castro as well as those looking to take advantage of someone who has just come into money.
Read More on The US Sun
PEDAL TO METAL
Mapped: America's 10 worst interchanges revealed
FROM THE INSIDE
Diddy is unrecognizable with overgrown grey hair in new prison mugshot
Winners are advised to immediately surround themselves with a seasoned team of experts including a financial advisor, a lawyer and a tax advisor to tackle all of these issues.
The next Powerball draw will be held on Monday with a fresh jackpot of $20 million.
Millions dream of winning the lottery and finding fame and fortune. These are the biggest winners in US lottery history.
When will I get my foods stamps? Breakdown of SNAP benefits after shutdown ends
Breaking down the IRS relief payments and November stimulus checks
The purse-friendly hack to winter proof your home with one $8 tool from Amazon
Chipotle confirms it will temporarily close all 3,855 locations for 24 hours
© NEWS ENTERPRISES, INC. ALL RIGHTS RESERVED | TERMS OF USE | PRIVACY | YOUR AD CHOICES | SITEMAP