What Would You do if You WON?
By Firm_Bison_7045+70 The $516M Powerball jackpot is really ~$134M. Here’s where the rest goes.
Saturday’s Powerball jackpot is advertised at $516 million. Here’s roughly what a single winner would actually take home.
1. Lump sum vs annuity
- Cash option: $212.6 million, paid at once.
- Annuity: the full $516M, paid in 30 payments over 29 years. Each payment is 5% bigger than the last, so it starts around $7.8M and ends around $32M.
Most winners take the cash.
2. Federal tax: the withholding isn’t the whole bill
The lottery withholds 24% up front, so about $51M of the $212.6M. That leaves you about $161.6M on the day you claim.
But a win this size lands almost entirely in the top 37% bracket. At tax time, you’d owe roughly another $27M. After federal tax, you’re closer to ~$134M. That gap catches a lot of people off guard.
3. Then your state
- No state tax on lottery winnings: California, Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming.
- The worst case is New York City. State tax (10.9%) plus city tax (3.876%) would take about $31M more, leaving roughly ~$103M.
So the same ticket is worth ~$134M in Texas and ~$103M in Manhattan.
Rough numbers, not tax advice. Actual brackets shave a bit off the 37%, and your state’s rules decide the rest.
Lump sum or annuity, what would you pick?
Recent responses
+35 @Mission_Pirate_4150 When I win, it’s all hookers and hookers
+31 @ocsurf74 Here's a list of countries that allow you to keep ALL OF YOUR WINNINGS! Canada, UK, Australia, NZ, Ireland, Germany, France, Belgium, Austria, Sweden, Norway, Denmark, Finland, Japan, Singapore and South Africa. Even in Mexico you keep 95% of the winnings!!
+16 @Elohengee I don't think the winner will complain either way. Seems the the only people complaining about paying taxes are the ones that didn't win.
+13 @Lowlife-Dog I would take the annuity, my reasoning is I have had things in my life that have made everything flip upside down that was never expected and really hurt mentally. I am not bad with money but shit happens. So if I or something in life goes wrong I get a reset financially each year. Just because you don't take the lump payment doesn't mean you still can't invest your winnings. The annuity usually earns around 4-5%. If I was investing and earning way more than that, it is always an option to sell the annuity. I am not sure of what they actually pay for an annuity to buy it out but surely it would be inline with what the lump payment vs annuity amounts. Just some rambling thoughts that I have gone over in my head.
+12 @Mindless-Ad-511 Oh nooooo. That’s not NEARLY enough