Billion with a “B”
Somebody in the US could end up having the Labor Day to end all Labor Days. For the 13th time in history, a US lottery jackpot has eclipsed the $1 billion mark. On Monday night, the estimated jackpot for the multi-state Powerball drawing is $1.1 billion; it hit a billion for the previous drawing on Saturday.
If nobody wins, the jackpot will grow for the next drawing on Wednesday night.
The last billion-plus-dollar lottery jackpot was hit on December 27, 2024, when one person in California had the winning Mega Millions ticket for $1.27 billion. The first billion-dollar jackpot was in January 2016: three people had winning Powerball tickets, splitting the $1.59 billion prize.
It will still take quite a run of non-winners for the Powerball jackpot to reach record levels. The largest prize ever won in a US lottery was $2.04 billion, nabbed by a single lucky Powerball winner on November 7, 2022.
In Powerball, players select six numbers: five white balls numbered 1-69 and one red “Powerball” number 1-26. To hit the jackpot, players must hit all six numbers exactly – the five white balls specifically and the red Powerball. Hitting all five white balls and missing the Powerball will still earn the player $1 million and hitting the Powerball will always result in at least a small win, depending on the number of white balls hit.
The odds of winning the jackpot are 1 in 292,201,338.
Every billion-dollar jackpot in Powerball and Mega Millions have come in the last decade and most have come just since 2022 because of structural changes to both lotteries.
Yeah, you have to pay taxes
There are always those who complain that even if you win the jackpot, you won’t actually see all of the money. This is true, but you will still win ungodly sums of cash.
If you take the annuity, you will receive the full jackpot amount across 30 annual payments. The taxman will, of course, take a big bite out of each payment, but I think we all can handle paying federal and state taxes on over $36 million per year. I won’t complain. The main benefit of the annual payment route is that it can help people avoid blowing through the money all at once, providing a reliable income stream. The lottery also often adjusts the payments to offset inflation.
For smaller jackpots, taking the payments over 30 years can also help keep you out of the top tax bracket.
Those who take the lump sum will receive far less money, as not only will taxes be taken out immediately (and some taxes may have to be made up on April 15, as well), but the amount will also be discounted to the present value of the jackpot. The total will be far less than the advertised jackpot amount, but in the case of $1.1 billion, it will still be a ridiculous sum.
Taking the lump sum offers winners full control over the money, with the potential to earn more over time with wise investing. It also gives people the opportunity to enjoy their full winnings without concern about whether they will live to receive every annuity payment.
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