Powerball jackpot hits $1.2 billion. What’s the best payout option? Experts weigh lump sum versus annuity

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Without a winner on Monday night, the Powerball jackpot increased to an estimated $1.2 billion, the third-largest prize in the game's history.

The choice between a $551.7 million lump sum payment and a $1.2 billion annuitized award will be one of the winner's major choices. Both choices are pretax projections.

The likelihood of winning the jackpot is one in 292.2 million when the next Powerball drawing takes place on Wednesday at 11 p.m. ET.

While the lump sum provides a full prize up front, the annuity offers one immediate payment, followed by 29 annual payouts that increase 5% each year, according to Powerball.

Almost all lottery winners choose the lump sum distribution, according to Chicago-based attorney Andrew Stoltmann

who has represented a number of lottery winners. And that, in my opinion, is a mistake.

Because "the typical lottery winner doesn't have the infrastructure in place to manage such a large sum so quickly," he said, the annuity is frequently a better choice.