November 3, 2022, Financial Advisor and Bloomberg — Marguerita Cheng, CFP® Pro, is featured in today’s article by Mackenzie Hawkins, who writes, “The Powerball jackpot swelled to an estimated $1.5 billion after no winner was declared in Wednesday’s drawing, nearing a record payout. As Americans flock to buy tickets for the next drawing on Saturday, it’s a good idea to think about how you would manage that much cash in the extremely unlikely chance — about one in 292 million — that you win. It’s no small task, and inflation, interest rate hikes, and a looming recession make it that much harder.”
Mackenzie explains that the lucky winner will have to choose between 30 annual payments that grow 5% each year and average $31.54 million after federal taxes or an immediate cash payout of $745.9 million, which would drop to roughly $470 million after federal taxes. There’s an argument for each strategy.
Marguerita, chief executive officer of Blue Ocean Global Wealth in Maryland, says: “The exact composition of that portfolio is really a function of the person’s risk tolerance and their time horizon. A lottery windfall is a great opportunity for impact investing as well as charitable or philanthropic giving.”
