Powerball jackpot hits $572 million. Why it could pay to wait until 2024 to claim the grand prize
- The Powerball jackpot has soared to an estimated $572 million, making it the fourth prize to exceed $500 million in 2023.
- There are two payout options for the winner: annuitized payments worth $572 million or a lump sum valued at $286.7 million.
- The next Powerball drawing is Wednesday at 10:59 p.m. ET.
The Powerball jackpot has soared to an estimated $572 million — and the big winner may wonder when the best time is to claim their prize.
It's the fourth Powerball jackpot to exceed $500 million in 2023, and there have been 29 consecutive drawings without a winner.
The next Powerball drawing is Wednesday at 10:59 p.m. ET, and the winner can choose from two payment options: annuitized payments worth $572 million or a lump sum valued at $286.7 million. Both options are pretax estimates.
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There is roughly a 1 in 292 million chance of scoring Powerball's grand prize.
Typically, the winning ticket expires within 90 days to one year, depending on the location of the ticket seller. You can find those details on the back of your ticket or by contacting your state's lottery.
While claiming the prize in 2023 may be possible, there are a couple of reasons to wait until 2024, according to certified financial planner John Loyd, owner at The Wealth Planner in Fort Worth, Texas. He is also an enrolled agent.
Whether you pick the lump sum or annuity payout, Loyd suggests a "cooling off period" after winning the lottery before making any big financial moves.
If you're planning to donate money to charity, start a business or make any investments, it will be "really tricky" to line up the right team of experts before year-end. "You probably wouldn't be getting the 'A' team," Loyd said. "So, I would buy yourself some time."
Plan for higher taxes in 2026
The winner will also need to plan for looming tax law changes slated for 2026 when provisions sunset from former President Donald Trump's signature tax overhaul.
For example, without changes from Congress, the top federal income tax bracket will revert to 39.6% from 37%. "That's a lot of money," Loyd said.
The winner will also need to plan for federal estate taxes. While the exemption rises to $13.61 million per individual or $27.22 million for married couples in 2024, those limits will drop by roughly one-half in 2026.
Robert Dietz, national director of tax research at Bernstein Private Wealth Management in Minneapolis, said estate tax exemption change is "the biggest issue" his firm is talking about with high-net-worth clients right now.
Wednesday's Powerball drawing comes roughly two months since a single ticket sold in California won the game's $1.765 billion jackpot. Meanwhile, the Mega Millions jackpot is back down to $57 million and the odds of winning that prize are roughly 1 in 302 million.
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