How much will the Powerball jackpot winners get?
NEW YORK — Three winners have claimed the $1.5 billion Powerball jackpot. But calculating their actual winnings isn’t easy as dividing by three.
The lump-sum cash value of the jackpot was $930 million. Split three ways, each winner would start with $310 million.
Then they have to subtract taxes. In that regard, each of the winners is extra lucky, because none will have to pay income taxes to their states.
The big jackpot winners were from California, Florida and Tennessee. That’s fortuitous for the winners: Neither Florida nor Tennessee has a state income tax, and a decades-old California law exempts lottery winners from paying the 12.3% state tax.
They’ll still need to pay 39.6% in federal income taxes on their prizes. After giving Uncle Sam his share, each will take home $187.2 million.
So what should they do with that money? The safest investment might be to put it into a 30 year government bond. With a 2.85% yield, each winner would get about $4.2 million a year to live on for the next 30 years.
They could also use the money to buy 6.2 million barrels of oil, 1.9 million shares of Apple or 171,560 ounces of gold.