$1.73 billion lottery jackpot: South Dakota’s payout options

RAPID CITY, S.D. (KEVN) - The second largest lottery jackpot drawing estimated to be worth $1.73 billion, will be drawn Wednesday night.

If you are the lucky winner in South Dakota what will the payout look like? Nate Starkey, a wealth manager at BMS Financial Services says If you take the cash value which is $756.6 million, the lottery takes 24%. Then Uncle Sam will take another 13% for federal income taxes. In the end, if you take the lump sum option your wallet will be $476 million heavier.

“For a lot of folks, the issue they run into is running out of money. You hear a lot of these folks that come into large sums…within three to five years, if left unchecked, they’re going to run out of money. They’ll go bankrupt,” explains Starkey. “So, for some folks, the annuity option can make sense.”

The annuity options are based on the $1.73 billion, not the cash value. In year one you would get roughly $16 million. Each year the payout increases 5%; in year 30 the check would be $67.5 million. Totaling $1.09 billion, $614 million more than the lump sum option.

Starkey suggests building a team that includes a wealth advisor and attorney when landing a jackpot like Wednesday night’s jackpot.

Copyright 2023 KOTA. All rights reserved.