The Powerball jackpot reaches $543 million. What is the best withdrawal option? Experts weigh lump sum vs. pension –

The Powerball jackpot rose to an estimated $543 million without a winner in Saturday night’s drawing.

It’s the fourth Powerball jackpot to rise above half a billion dollars in 2023, and there are two top prize options: a lump sum payout of $272.2 million or an annual payout of $543 million. Both options are pre-tax estimates.

“Virtually everyone who wins the lottery chooses the lump sum payout,” said Andrew Stoltmann, a Chicago-based attorney who has represented several lottery winners. “And I think that’s a mistake.”

In many cases, annuity is the better option because “the typical lottery winner doesn’t have the infrastructure to manage such a large sum so quickly,” he said.

The typical lottery winner does not have the infrastructure to manage such a large sum so quickly.

Andrew Stoltman

Lawyer

Stoltmann said the annuity protects winners from financial mistakes in the first, second or third years while keeping most of the proceeds safe.

“Flexibility and control over assets is a really good thing, but it’s not necessarily for everyone,” said certified financial planner and registered agent John Loyd, owner of The Wealth Planner in Fort Worth, Texas.

While the lump sum payout could be a good financial move for some winners, he said others could benefit from the spending limits of annuitized payments.

However, some winners may later decide to sell the annuity to a third-party company for a lump sum payment. “The problem is that they’re not getting the best bang for their buck with that payout,” Loyd warned.

Monday’s Powerball drawing comes about two months after a single ticket sold in California won the game’s $1.765 billion jackpot. The Mega Millions jackpot has now dropped back down to $41 million, and the odds of winning that prize are about 1 in 302 million.

About the author

Leave a Reply

Your email address will not be published. Required fields are marked *