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What happens if you win Powerball, Mega Millions?

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Powerball fever grips nation as jackpot reaches record high Powerball fever grips nation as jackpot reaches record high
SARASOTA COUNTY, FL (WFLA) -

Millions across the country are in line hoping a small investment will pay off.

The Powerball game hit a record-high $600 million dollar jackpot on Friday, making it the world's second largest lottery prize.

On top of that, Friday night is the first Mega Millions drawing in Florida.

So with hundreds of millions of dollars on the line, what to do with all that cash?

If you are the sole winner of the Powerball jackpot, you could win an estimated prize of $600 million, paid over 30 years, or take a cash payout of $376 million.

A Mega Millions winner could receive $190 million over 26 years, or take a lump sum of $140 million.

The reason for lump sums?

A Florida lottery spokesperson explained the lump sum is the cash the lottery has on hand.

For example, the official said for the $190 million Mega Millions jackpot, the Florida Lottery only has $140 million of cash on hand.

So if you choose to get your prize as payments over the next 26 years, the Florida Lottery would invest that $140 million in a federal bond, and over time, give you the full $190 million prize.

If you choose to get the lump sum, then the Florida Lottery would give you the $140 million they have on hand, and you can do what you want with it.

So if Lady Luck ends up being on your side this weekend, you'll have to find a place to store that cash.

Sarasota financial planner Scott Barcomb said, "These are nice difficult decisions to have."

Barcomb runs Barcomb & Associates, LLC.  He says an instant winner should first splurge a little.

Barcomb says, "If you get a big chunk of money, the natural inclination is you're gonna go out and spend a bunch and I think you should indulge that to a certain amount but you set a limit on that."

Of course, you know you have to pay some fees.

Florida Lottery officials say 25% of your winnings are paid in federal taxes.  You also have to list your winnings as income on your W-2 form.

So after all that, Barcomb suggests you invest in a diverse portfolio and live off the interest.

He also advises the winner to choose the lump sum.

Barcomb says, "If you crunch the numbers, the reason why the vast majority of people do take the lump sum is because if you invest it wisely and you're prudent with it, in the long run, it's gonna work out much better for a financial standpoint, you're gonna wind up getting a lot more money if you take a lump sum."

But before you make these decisions, you have to win.  In Florida, you are required to reveal your identity if you win.

It could be a press conference, or it could be your name and city on a press release, but either way, your name will get out there.

The Mega Millions drawing is Friday night, and the Powerball drawing is Saturday.

Be sure to watch News Channel 8 at 11 to get the winning numbers!

FOLLOW US ON TWITTER: @wflatampa

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