When you win the Lottery jackpot, it can change your life forever. But it’s also important to consider how you’ll deal with your newfound wealth.
The first step is to choose whether you want a lump sum or annuity payment option for your prize money. Cash payouts come in lump sums and are taxed the same way as a regular income, while annuities pay you over 29 years.
If you choose the annuity option, you’ll be rewarded with one initial payment and then annual payments for 30 years. The annuity amount depends on the federal funds rate, which has risen in recent months.
You can also choose a jackpot split, which awards you a portion of the total prize pool if you match all six numbers and a bonus ball. This is the most common way to win a lottery jackpot, but it’s not always as easy as it sounds.
There are two primary factors that influence jackpot size: ticket prices and odds of winning. After Powerball raised its ticket price from $1 to $2 in 2012, jackpots have grown significantly. Mega Millions followed suit in 2017, letting more people buy tickets.
A lot of people get caught up in the hype around a big lottery jackpot. But if you’re not ready to spend that much, choosing a lottery game with less expensive tickets can be more rewarding.
Regardless of which option you choose, your lottery ticket must be in compliance with state and federal regulations. You’ll also have to decide how you want to claim your prize and whether you’d like to remain anonymous if you win.