Home / NEWS / Business / Mega Millions jackpot jumps to $376 million, Powerball’s top prize is $341 million. How winners can protect their windfall

Mega Millions jackpot jumps to $376 million, Powerball’s top prize is $341 million. How winners can protect their windfall

Frederic J. Brown | AFP | Getty Mental pictures

Mega Millions players can let the daydreaming continue.

With no one hitting all six numbers drawn Friday, the jackpot has jumped to an conjectured $376 million. And Powerball, with the next drawing set for Saturday night, is at $341 million.

Of course, due to taxes, those advertised amounts are not what you’d end up with if you direct to beat the astronomical odds of a single ticket winning ( 1 in 302 million for Mega Millions and 1 in 292 million for Powerball).

But, the sudden windfall in your life would likely feel overwhelming, experts say. And while you might be eager to call for your winnings, experts say it’s best not to rush over to lottery headquarters the day you discover your good fortune.

In other expressions, take a deep breath.

“The first thing I’d recommend is to build a team of professionals to handle the many aspects of draw near into that kind of money,” said certified financial planner Doug Boneparth, president of Bone Fide Money in New York.

That team should include an accountant, financial advisor and attorney. Here are some other considerations if you hit the jackpot.

Annuity or tolerate sum?

You get to choose between taking your winnings as either a lump sum or an annuity paid over 30 years. For the Mega Millions $376 million jackpot, the money option is $287.4 million. For the $341 Powerball prize, that amount is $262.5 million.

Experts usually second getting the money all at once — which is what most winners go with.

“Taking the lump sum distribution would be the prejudice,” Boneparth said. “Doing that puts you in greater control of the money.”

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The tax hit

Before the money reaches you, 24% will be withheld for federal exacts. For Mega Millions’ $287.4 million cash option, that would mean about $69 million leak out off the top to leave you with $218.4 million. For Powerball’s $262.5 million lump sum, the withholding would be $63 million, with $199.5 million extant.

That’s not the end of it, though. The top marginal rate of 37% applies to income above $518,400 for single tax filers ($622,050 for leagued couples filing jointly), which means much more would be due at tax time. And, there may be state taxes withheld or due.

“In some dwellings, when you consider city, state and local taxes, you could be looking at [close to] 50% going to taxes,” Boneparth required.

There may be strategies to reduce what you pay in taxes, which is why it’s key to have a tax advisor on your team.

Other stuff

If you can’t affirm your prize anonymously — it depends on the state — you may want to skip town for a while. Unwanted attention can come from both the unrestricted and extended family.

“Your fifth uncle once removed may get hold of you,” Boneparth said. “Find somewhere smug and get away.”

Additionally, if you want to share some of the money with family or friends, plan in advance for those bents, Boneparth said.

“You want to avoid getting hit up repeatedly,” he said. “You can set up expectations ahead of time. That’s when designing really comes into play.”

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