First question for Powerball & Mega Millions winners: Annuity or cash?

💲 The annuity value of Wednesday's Powerball jackpot is $1 billion

💲 Mega Millions is at $640 million ($328 million cash) Tuesday

💲 If you win don't tell anyone, says financial advisor Lou Scatigna

The biggest question facing the eventual winner of the billion-dollar Powerball jackpot is made before they know they've won anything: do you want an annuity or cash payout?

The Powerball jackpot grew for the 38th drawing in a row Monday to the fifth largest annuitized amount in U.S. lottery history at $1 billion ($516.8 million cash). The numbers drawn Monday were white balls 5, 8, 9, 17, 41 and red Powerball 21. The Power Play multiplier was 4X.

Mega Millions will be worth an annuitized value of $640 million ($328 million cash) for Tuesday’s drawing.

The cash-or-annunity question is one that is posed as soon as the ticket is played, which defaults to cash if no option is specified.  The annuity is paid out in 30 annual installments or the cash amount, which is a lower amount but paid at once. Toms River certified financial planner Lou Scatigna says there are positives and negatives to each.

"I have to be comfortable that the entity paying me over the next 20 years is financially viable to continue to do so. Say the state becomes bankrupt or has a financial crisis or depression and they can't make the payoff. Now you're just a creditor," Scatigna said. "If you get it all upfront, you can control your money."

The cash can be invested and ultimately provide more money than the annuity.

"There's no reason why properly invested that that money shouldn't double every seven years," Scatigna said.

Downsides of all that cash

But having all that money can also be bad. Scatigna said that winners of a typical jackpot have been known to blow all the cash in under 10 years. An annuity ensures you have a regular flow of cash and suggested that could be a better choice.

"The one thing about the annuities is it saves you from yourself because you get a fresh start at the beginning of every year when you get your payment," Scatigna said.

The cash option can also lead some people down a dark path.

"If you're a gambler or if you have vices where that kind of money is going to destroy your life, then the annuity would be the default way you'd have to go," Scatigna said.

Annuity or cash, Scatigna advises that winners stay quiet about their good fortune, hire an accountant, financial planner and a therapist.

"Your life is gonna change in a way that you never saw possible. And it's things that you're gonna have to deal with that you certainly wouldn't have to deal with in a normal life," Scatigna said "You're close to a billionaire. You're Elon Musk, or at least a fraction of him, pretty much overnight."

The New Jersey Lottery recommends signing your winning ticket and taking a picture of both sides before taking it to lottery headquarters. In New Jersey, jackpot winners can remain anonymous but are still responsible for paying the taxes.

Wednesday's Powerball drawing is at 10:59 p.m. The Mega Millions drawing is Thursday at 10:59 p.m. Both drawings are on ABC 7 and Fox Philadelphia.

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