As the Powerball jackpot in Connecticut soars, financial experts encourage potential winners to spend wisely.
WALLINGFORD, Conn. — The Connecticut Lottery Powerball Jackpot has risen to $930 million.
With so much money up for grabs, what would someone spend it on and how should one even go about it?
Maggie Johndrow, a financial advisdor and managing partner with Johndrow Wealth Management in West Hartford, said it’s not about what someone spends their winnings on. Rather, it’s all about how they spend it.
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She said it’s especially important to know how your earnings will be taxed.
“So, the Internal Revenue Service automatically withholds 24% of any lottery prize of $5,000 or more,” said Johndrow.
Often, if someone has a really big win, they might be pushed into the higher or highest federal tax bracket.
The highest is currently 37%.
“So, if they’re only withholding 24%, you may owe an additional 13% on the federal side when you file your tax return,” explained Johndrow.
In Connecticut, the state automatically holds 6.99% of the winnings.
“Is that enough? It’s going to depend on your financial picture. And if you withhold more less than what you ultimately owe, you’re going to get a surprise tax bill,” said Johndrow.
She also recommends winners hire an accountant and an estate planning attorney to plan spending wisely.
Jeevan Vittal, the spokesperson for the Connecticut Lottery Corp., said they’ve seen an uptick in Powerball ticket sales.
“The estimated jackpot is $930 million, and that drives a lot of ‘what if I won’ kind of thoughts, and it’s that kind of fun thinking and dreaming that inspires players to go out and purchase a Powerball ticket,” said Vittal.
For those who win, Vittal said it’s important to sign the back of your ticket and call CT Lottery as soon as possible.
“We would hope that everybody and wish everybody will play responsibly, play safely and dream big because you never know who can win,” said Vittal.
The next Powerball drawing will be Wednesday night at 11 p.m.