Playing the lottery is a popular pastime for many people who dream of winning big. Powerball is one of the most widely known lottery games in the United States, captivating players with the potential for jackpots in the hundreds of millions of dollars. To win the Powerball jackpot, you need to match all 5 white ball numbers and the red Powerball number. But what happens if you match all 5 white balls but not the Powerball? Let’s take a look.
How Powerball Works
First, it’s helpful to understand how Powerball works. For each Powerball drawing:
- 5 white balls are drawn from a set of 69 white balls
- 1 red Powerball is drawn from a set of 26 red balls
To win the jackpot, you need to match all 5 white balls in any order, as well as the red Powerball. The odds of matching all 6 numbers to win the jackpot are incredibly small, at only 1 in 292.2 million.
Powerball also has 8 other lower prize tiers, ranging from $4 to $1 million. These prizes allow you to win money without matching all 6 numbers. The various Powerball prize tiers are:
| Prize Tier | Match | Odds (1 in) | Average Prize |
|---|---|---|---|
| 1 – Jackpot | All 5 white balls + Powerball | 292,201,338 | Varies |
| 2 | All 5 white balls | 11,688,053 | $1 million |
| 3 | 4 white balls + Powerball | 913,129 | $50,000 |
| 4 | 4 white balls | 36,525 | $100 |
| 5 | 3 white balls + Powerball | 14,494 | $100 |
| 6 | 3 white balls | 579 | $7 |
| 7 | 2 white balls + Powerball | 701 | $7 |
| 8 | 1 white ball + Powerball | 91 | $4 |
| 9 | Powerball only | 38 | $4 |
As you can see, matching all 5 white balls without the Powerball lands you in the second prize tier. So what happens if you do this?
You Win $1 Million
If you match all 5 white balls in any order, but not the Powerball, you win a $1 million prize. This is quite a nice chunk of change!
The $1 million prize for matching 5 numbers is fixed and does not change based on ticket sales or how many winners there are. Powerball guarantees a $1 million prize for anyone lucky enough to match 5 numbers.
Hitting 5 numbers without the Powerball still isn’t easy to do. The odds are 1 in 11,688,053. To put that in perspective, that’s:
- Over 4X less likely than being struck by lightning in your lifetime (1 in 3,000)
- Half as likely as being attacked by a shark (1 in 11.5 million)
- 5X more likely than getting a hole in one (1 in 12.5 million)
So matching 5 numbers takes a healthy dose of luck! But it does happen periodically. Typically there are between 0 to 4 winners of $1 million prizes each Powerball drawing.
You Have a Decision to Make
When you win $1 million by matching 5 numbers in Powerball, you get to choose between two prize payment options:
- Annuity option – Paid out as one immediate payment followed by 29 annual graduated payments over 29 years that increase by 5% each year. This option provides interest income over three decades while protecting you from overspending.
- Cash option – One lump sum payment that is equal to the cash in the current Powerball jackpot prize pool. The cash value is typically around 60-70% of the advertised jackpot and is split evenly amongst the number of winners. Cash options for secondary $1 million prizes are around $550,000 before taxes.
For most $1 million tier winners, the annuity option is usually the smarter choice. It protects you from spending all the money quickly and provides a steady income stream. But the cash option provides immediate access to hundreds of thousands in cash if you need it or want to invest and spend it more freely. Either way, it’s an amazing prize!
Taxes Take a Big Bite
Before getting too excited, remember that both the annuity and cash options for Powerball prizes are subject to taxes. There are both federal and state taxes that apply:
- Federal taxes – Powerball winnings are taxed at the highest federal income tax rate, currently 37%. Federal taxes instantly take about 1/3 of your $1 million prize.
- State taxes – Varies by location, but typically ranges from 0-10% state tax on the prize money.
After all taxes are accounted for, the $1 million prize realistically ends up being around $600,000 in the first year for the cash option. While that’s still great money, taxes make a big impact.
Winners Often Remain Anonymous
Winners of $1 million Powerball prizes can usually choose to remain anonymous and avoid publicity. Requirements vary by state, but winners can often claim through a trust or LLC to keep their identity private.
This is beneficial for security reasons and to avoid being bombarded with requests for money. Lottery winners are prime targets for scams and harassment, so anonymity provides protection.
What Winners Do with the Money
According to Powerball, common plans for $1 million winners include:
- Paying bills & debt
- Making home improvements
- Investing in retirement
- Paying for college costs
- Taking a dream vacation
- Starting a business
- Giving to charity
While fun splurges happen too, most winners put a chunk of the money towards simple daily expenses and financial stability for the future. $1 million gives you options.
Jackpot Envy Still Exists
Winning $1 million is thrilling, but Powerball winners who match 5 numbers without the Powerball still feel twinges of regret about missing the full jackpot.
In a record-setting drawing on Aug 23, 2017 when the jackpot reached over $700 million, there were 6 second-tier $1 million winners. But one winner told the Today Show he felt “Jackpot envy” knowing how close he came to winning $700 million more.
Coming so close but just missing out on a massive jackpot adds an element of frustration. But at the end of the day, a $1 million prize is amazing on its own.
Increased Odds for Additional Prizes
An interesting Powerball quirk is that winners of secondary prizes have increased odds of also winning smaller prizes in the same drawing.
This happens because Powerball machines give every combination of white balls and Powerballs a chance to win a prize. So if you match 5 white balls already, by default you also matched 4, 3, 2, or even 1 white ball in the same drawing.
For example, a 5 number match winner in 2013 also matched 3 numbers, adding $10,000 more to his $1 million prize. Increased odds for smaller prizes is a nice bonus!
Conclusion
Hitting 5 numbers but missing the Powerball in Powerball still pays out an amazing $1 million fixed prize. It takes a lucky lottery ticket to match 5 numbers, but when it happens, winners have the choice of an annuity or instant cash.
After taxes are paid, most winners use Powerball payouts for stability – bills, debt, savings, college funds, and sometimes a special purchase or trip. $1 million might feel small next to a billion dollar jackpot, but it’s still a life-changing amount!
