Powerball jackpot swells to $1.5 billion, 3rd-largest in U.S. history
Yahoo Finance Live anchors discuss the massive Powerball jackpot, which has now reached $1.5 billion.
Video Transcript
- Now to the Powerball. And the size of the prize for Saturday's draw has risen to $1 and 1/2 billion, the third largest jackpot in US history. Now, if you manage to beat the odds of around 292 million to win, you'll still have inflation to deal with. So strategy is key. Now, winning payments can be given as an annuity in 30 installments or in one lump sum. Now, most pick the lump sum because YOLO. But financial advisors say in this environment it might not be the best option.
Now, it's worth remembering the cash value price is actually the amount of money needed in the jackpot to fund the annuity. So as the Fed raises rates, bigger jackpots can actually be paid for with smaller cash on hand. Now, if you take the money as a lump sum, inflation and taxes will take a big portion of it. But at least you get it all at once. Now, you might not live another 30 years. Hopefully, you all do. But just in case you don't, I mean, you want to enjoy it while you can, right, Seana?
- I hope you do. I hope everyone watching lives another 30 years. But yeah. It is interesting once you start factoring in inflation into this and what this could mean just in terms of whether or not you are going to take that lump sum or if you're going to go with that annuity option. No winner has chosen the annuity option since 2014. So, yes, we're in a very different economic environment. But it's been quite some time since someone has shown, I guess, some of the restraint and chosen that annuity option. Either way, you're getting millions and millions of dollars, whether it's a lump sum or over the next 30 years. So not a bad option either way.
