BAKERSFIELD, Calif. (KGET) — The odds were one in 292.2 million of winning the Powerball, but it happened right here in Kern County. The $1.765 billion jackpot now called the second largest lottery in U.S. history.
There are two options for the payout: take the lump sum, or take yearly payments for 30 years.
Carolyn Becker with the California Lottery says the cash lump sum comes out to $774.1 million.
If the winner takes the yearly payments, it adds up to $1.765 billion.
Both prize options are before taxes.
If the winner selects the annuity option, they will receive an immediate payment of more than $58.8 million followed by 29 annual payments increasing 5% each year receiving the full amount. “If they take the annual payments that’s them asking us as the state to invest that lump sum on their behalf over 30 annual payments,” said Becker.
But, Becker with the California Lottery says the cash option has a higher yield when invested.
Becker says California doesn’t take out taxes for lottery winnings, but the IRS does. Becker says to start, the IRS takes 24% in tax from the $774.1 million.
If a Powerball winner dies, the money becomes part of the person’s estate. “If a winner were to have unforeseen circumstances during those annuity payments, it would fold right into the estate, etc,” said Becker.
She says the best advise for a lottery winner facing life-changing money is to get a financial advisor, and get a lawyer. But, there’s no guarantee you’ll have a wonderful future.
Clinical Psychologist, Dr. Corey Gonzales says, “Money does not make you happy. What makes you happy is having a purpose, a reason to get out of bed, engaging (using your skills), and putting yourself into something bigger than you.”
It’s proven by lots of people who come into sudden wealth. Dr. Gonzales says it happens all the time with big court payouts and professional athletes. “We see that with the NBA where at least 60% of them end up filing bankruptcy,” said Gonzales. “We’ve also seen it in the NFL where 78% of them end up being broke.”
Dr. Gonzales shares advice for people whether they’re rich, or poor. “It’s very important you have gratitude, you have optimism, and you’re able to feel the love and connectedness of people that’s real, and not based on conditions or something phony.”
Carolyn Becker with the California Lottery says $119.5 million dollars from Powerball sales is going towards California Public Schools.