Negotiations in Washington to avert the double blow of expiring tax breaks and automatic spending cuts next year may change how lottery winners choose to accept their money. If somebody has the lucky number to win Wednesday’s $500 million Powerball jackpot, the winner might want to take the lump sum of roughly $327 million, before taxes. Taking the annuity option over a period of 30 years will result in more taxes in the long run. Regardless of which option a winner takes, the winnings should be enough to last a lifetime if the winners are careful with how they spend and invest the prize.
See Jonelle Marte, Fiscal Cliff May Clip Powerball Winner, The Wall Street Journal, Nov. 27, 2012.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.
