Overdrawn

So as far as I’m aware, no one in our lovely extended family was anywhere near Joe’s Service Center in suburban Altadena, CA this past Saturday. Or if you were and are busily lawyering-up and considering obscure-yet-catchy LLC titles, then congratulations! Sure, news that a mystery Golden State-based lucky Leprechaun hit the $2.04B Powerball paydirt telegraphs as other-worldly, fanciful, distant and unrelatable. But diving into the numbers paints a more sobering story; one obscured by funhouse smoke and mirrors. Somewhat (un)surprisingly, there’s no real Bank of America checking account topped off with nearly $2B awaiting custodial transfer to YOU. $1.9B represents the future sum value of the 30-year annuity that underlies the headline-grabbing total. Greedy and impatient? Choose the lump sum of $929M but then get REAL acquainted with subtraction. Sliced off the top is a 24% federal tax withholding amounting to a $223M immediate hit. Uncle Sam rakes another 13% (top federal income tax rate) and $121M come April 2023. That leaves $635M before state and local income taxes. Live in New York state? You’ve just volunteered another $74M. So with all this fuzzy, funny math, only in America can $2B become annoying and dispiriting. As they say, you can’t look a gift horse in the mouth. But there’s no rule against viewing that horse through an accountant’s green visor with a suspect side-eyed glance. Even still, there’s lots that can be done with $500M. Like plopping it into your Capital One 360 Performance Savings Account now paying 3% APY. A cool $15M annually. Before tax 😊. See? They get you EVERY TIME!