Powerball jackpot hits $543 million. What's the best payout option? Experts weigh lump sum vs. annuity

• The Powerball jackpot has jumped to an estimated $543 million without a winner from Saturday night's drawing.
• There are two grand prize options: a lump sum of $272.2 million or an annuitized payout of $543 million.
• The next Powerball drawing is on Monday at 10:59 p.m. ET.

The Powerball jackpot has jumped to an estimated $543 million without a winner from Saturday night's drawing.

It's the fourth Powerball jackpot to rise above half a billion dollars in 2023, and there are two grand prize options: a lump sum payout of $272.2 million or an annuitized payout of $543 million. Both options are pretax estimates.

The next Powerball drawing is Monday at 10:59 p.m. ET, and the odds of winning the jackpot are 1 in 292.2 million.

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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.

Lump sum distribution may be 'a mistake'

"Virtually everybody who wins the lottery picks the lump sum distribution," said Andrew Stoltmann, a Chicago-based lawyer who has represented several lottery winners. "And I think that's a mistake."

In many cases, the annuity is a better option because "the typical lottery winner doesn't have the infrastructure in place to manage such a large sum so quickly," he said.

Stoltmann said the annuity protects winners from first-, second- or third-year financial mistakes while keeping the majority of the proceeds safe. 

Make a long-term plan for the windfall

"Flexibility and control over assets is a really good thing, but it's not necessarily for everybody," said certified financial planner and enrolled agent John Loyd, owner at The Wealth Planner in Fort Worth, Texas.

While the lump sum payout could be a good financial move for some winners, he said that others may benefit from the spending guardrails of annuitized payments.

However, some winners may later decide to sell the annuity to a third-party company for a lump sum payment. "The issue is they don't get the best bang for their buck on that payoff," Loyd warned.

Monday's Powerball drawing comes roughly two months after a single ticket sold in California won the game's $1.765 billion jackpot. Meanwhile, the Mega Millions jackpot is back down to $41 million, and the odds of winning that prize are roughly 1 in 302 million.