Tim and Yanely chat about the lucky person from California who became the lone winner of Powerball's record-breaking $2.04 billion jackpot on Tuesday, November 8th. The jackpot winner gets to choose to receive their prize as payments made over 30 years, or as a lump-sum payment (the cash option). Most people choose the cash option, but they fail to consider one important thing... 

Federal and jurisdictional income taxes apply to both jackpot prize options!

This quick discussion explores questions like:

1) How much money does the lottery winner of the $2.04 billion prize actually collect after taxes?

and

2) What would Yanely do if she won the lottery?

Resources:

A single winning ticket for the $2.04 billion Powerball jackpot was sold in California

Interactive: What Are Your Odds Of Winning the Lottery?

About the Authors

Yanely Espinal

Born and raised by Dominican, immigrant parents in Brooklyn, Yanely is a proud product of NYC public schools. She graduated from Fiorello H. LaGuardia High School in 2007 before going on to receive her bachelor's degree at Brown University in 2011. As a Teach For America corps member, Yanely taught third and fourth grade in Canarsie, Brooklyn. She received her master's degree from Relay Graduate School of Education in 2013. She spends her spare time making YouTube videos about personal finance on her channel, MissBeHelpful. Yanely also loves to dance, sew, paint, listen to podcasts, and babysit her 10 nieces and nephews!

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.