There are plenty of decisions that need to be made when winning a massive lottery prize. One is over whether to remain anonymous but another that is more common in the USA is just how to accept your winnings.
Massive Win for Truck Driver
Truck driver Dave Johnson from Brooklyn in New York, USA, is still celebrating his $298.3m Powerball jackpot. That win was the second-largest jackpot in New York state history, but has he really got $298.3m to spend?
No, he hasn’t because Powerball and Mega Millions winners need to quickly check the rules before finding out just how much they will receive. The jackpot may have been $298.3m but he’ll actually receive $114m.
Where does the other $184m go? Well, Dave had to decide whether to receive his winnings as a one-off lump sum or as an annuity. The latter would have seen him receive his winnings in 30 payments over a period of 29 years and pay federal and income tax too.
The One-Off Payment
Most winners don’t go down the annuity route wanting to be ultra-wealthy right away. With each draw there’s the jackpot amount publicised and underneath that, the lump sum figure. For this $298.4m Powerball jackpot had a one-off payment figure of $180m, which after taxes were paid left him with $114m.
So, his decision left him with $184m less than the advertised jackpot. Last October, the Mega Millions jackpot reached $1.5bn and was won by a single ticket sold in Simpsonville, South Carolina. The winner has yet to come forward, but that world record figure has a one-off payment figure that is $913.7m with at least another $200m to be deducted when the tax man comes along.
Thankfully, this isn’t the case in the UK with no tax on lottery wins and no lump-sums offered. Just remember next time you play the American lottery draws, that mouth-watering jackpot figure isn’t quite what you’re going to receive.
Steve is a self-employed writer and writes on a wide range of subjects. He’s written about everything from football previews to politics and even had a spell editing a magazine about women’s wrestling!