(NEXSTAR) – The Powerball jackpot has propelled to an estimated $1.55 billion ahead of Monday’s drawing. But if you win, your payout could be much smaller.
At its current size, the jackpot ranks as the third-largest in Powerball history and the fourth-largest in U.S. lottery history. It currently sits behind a $2.04 billion Powerball jackpot won in California last year, a $1.602 billion Mega Millions jackpot won in Florida in August, and a $1.586 billion Powerball jackpot split by three tickets in 2016.
Despite its record size, you won’t immediately see a check for $1.55 billion if you’re lucky enough to win during Monday’s Powerball drawing.
The way the game is structured, plus taxes, will shrink your payout by as much as $741 million.
If you’re familiar with Powerball, you likely know there are two ways the jackpot is paid out to a winner. The first, and most common (and the one you may want to think twice about), is the cash lump sum, which is estimated at $679.8 million for the current jackpot. The cash option is the amount of money Powerball officials believe is what they’ll have in the prize pool at the time of the drawing and that that is enough to fund the annuity option.
The annuity option is the number everyone is familiar with – in this case, it’s the estimated $1.55 billion. If you select the annuity option, you’ll receive a one-time payment, followed by 29 annual payments that increase by 5% annually.
Regardless of which payout you prefer, neither guarantee you’ll be a billionaire (unless you make some good investments with your winnings).
You’re going to see a decent chunk of your jackpot withheld for taxes. Though there are some states that do not have a state lottery tax withholding, they all must withhold 24% in federal tax on prizes as large as this jackpot. With additional taxes, you’ll see roughly 37% of your prize money withheld, should you win.
That means at best, if you’re a single-filer when it comes to federal taxes, you’ll receive $428.1 million if you opt for cash, or $977.6 million after all 30 annuitized payments, according to an analysis by USA Mega. This is true for the nine states that do not have a local lottery tax.
Outside of those states, a winner in Arizona would pocket the most money at $411.3 million for the cash option or $938.9 million with annuitized payments, USA Mega reports. A winner in New York would lose the most to taxes, seeing a cash payout of roughly $354.2 million or $808.7 million with the annuitized payments.
These estimated payouts are, of course, the best-case scenario. You could end up splitting your Powerball jackpot with another winner – or two, or even more. Even though the odds of winning the jackpot are drastic – 1 in 292.2 million – 18 of the more than 200 Powerball jackpots won since 2003 have been split by at least two tickets.
If you’re lucky enough to win the jackpot, even if you aren’t the sole winner, experts recommend moving quickly to assemble a team that includes an attorney, a tax advisor, and a financial advisor. They also encourage protecting your ticket and keeping your victory a secret for as long as possible.
That may be easier in some states than others – only a select few let winners of a jackpot this large remain anonymous.
Ready to try your luck anyway? The next drawing will be held Monday night at 10:59 p.m. ET.
Powerball tickets are $2 each and sold in 45 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands. In addition to Saturdays, drawings are held every Monday and Wednesday at 10:59 p.m. ET. You have a 1 in 24.9 chance of winning any Powerball prize.