Powerball jackpot hits $1 billion. Here’s how to pick between the lump sum or annuity if you win

Eight
states

don’t
tax
lottery
winnings.
They
are:
California,
Florida,
New
Hampshire,
South
Dakota,
Tennessee,
Texas,
Washington
and
Wyoming.

The
next
Powerball
drawing
is
Monday
at
10:59
p.m.
ET,
and
the
chances
of
hitting
the
jackpot
are
roughly
1
in
292
million.

“Virtually
everybody
who
wins
the
lottery
picks
the
lump-sum
distribution,”
Andrew
Stoltmann,
a
Chicago-based
lawyer
who
has
represented
several
lottery
winners,
previously
told
CNBC. “And
I
think
that’s
a
mistake.”

Without
a
team
of
experts,
or “infrastructure,”
such
as
a
financial
planner,
tax
advisor
and
attorney,
a
big
winner
could
easily
mismanage
the
lump
sum
windfall,
he
said.

“Any
sizable
lotto
win
will
often
lead
to
a
huge
change
in
lifestyle,”
said
Houston-based
CFP
Crystal
McKeon,
chief
compliance
officer
at
TSA
Wealth
Management. “People
buy
mansions,
boats,
planes,
invest
in
bad
business
deals
or
give
money
away
because
they
think
they
have
more
than
enough.” 

The
29-year
annuity
could
offer
guardrails,
which
may
be
appropriate
for
certain
winners,
experts
say.
Of
course,
the
opportunity
cost
for
the
annuity
is
less
money
to
invest
upfront.

The
latest
Powerball
jackpot
comes
less
than
one
week
after
a
single
ticket
purchased
in
New
Jersey
won
Mega
Millions’

fifth-largest
grand
prize
of
$1.128
billion.

That
grand
prize
is
back
down
to
$36
million
and
the
chances
of
winning
are
roughly
1
in
302
million.