The Odds of Winning a Lottery Jackpot Are Really Long – But You Can Tip the Odds in Your Favor

lottery jackpot

As the jackpot for Friday night’s Powerball drawing soars to over $1 billion, many people are wondering why they haven’t won. The answer: The odds of winning are really, really long. But there are a few little things you can do to tip those odds slightly in your favor.

For starters, it’s important to understand how a lottery jackpot is calculated. The advertised amount isn’t sitting in a vault somewhere waiting for the winner to claim it; instead, jackpots are calculated based on how much you’d receive if the prize pool were invested in an annuity over three decades. The resulting payout is a series of payments that increase by about 5% each year.

Lottery players also need to be aware of how taxation works. Most states (and the federal government, for that matter) allow winners to choose whether they want to take their prize in a lump sum or as an annuity. The former is easier on the wallet, but it comes at a cost: the IRS withholds 24% off the top of the prize.

If you’re not sure which option is best for you, consult a financial advisor. And remember: even if you do win, it’s important to spend your winnings responsibly and wisely. Otherwise, you may find yourself back at the drawing board a few years down the road, spending thousands of dollars a year on tickets. That’s what happened to this woman who won a large jackpot in 1998 and ended up spending her entire windfall over the next 15 years.