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There is a winner for the $1.128 billion Mega Millions jackpot, and all six numbers matched a ticket sold in New Jersey.
The lucky ticket holder can expect an automatic federal withholding of 24% and state withholding of 8%, but the final bill will be millions more.

Xavier Lorenzo | Moment | Getty Images

There is officially one winner for the $1.128 billion Mega Millions jackpot — and the taxman will take a sizable share, experts say.
A single ticket sold in New Jersey won the game’s fifth-largest grand prize after matching all six numbers drawn Tuesday night, Mega Millions announced Wednesday. The final jackpot dropped from an estimated $1.13 billion to $1.128 billion based on actual ticket sales.

The lucky winner will choose between two options: an annuitized prize worth $1.128 billion or a lump-sum payout of $536.6 million cash.
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Regardless of the payout option, “you’re losing almost half of it” to taxes, said Albert Campo, a certified public accountant and president of AJC Accounting Services in Manalapan, New Jersey.
New Jersey taxes prizes over $10,000 and the winner will owe millions to the state, including a mandatory withholding, on top of their federal tax bill, he said.
Eight states, including California, Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming, do not levy income taxes on lottery winnings.

How much the winner could owe in taxes

Before seeing a penny of the jackpot, the winner will pay a 24% mandatory upfront federal withholding to the IRS.
If they choose the $536.6 million cash option, the 24% withholding automatically reduces the prize by about $129 million.
However, the jackpot pushes the winner into the top federal tax bracket, which is 37% for 2024, Campo said. After the 24% withholding, the winner could still owe another 13% in federal taxes, or about $70 million.

Of course, these are rough calculations. The winner’s federal tax bill will also depend on other income, credits or deductions.
As for state taxes, New Jersey automatically withholds 8% for payouts of more than $500,000, which will cost the winner about another $43 million up front. The state withholding covers “a big chunk,” but New Jersey’s top tax bracket is 10.75%, Campo said.
“None of these winners really think about taxes” until there’s a hefty share going to the IRS and state government, said Andrew Stoltmann, a Chicago-based lawyer who has represented several lottery winners.

The Mega Millions is not the only way to win big. The Powerball jackpot has reached an estimated $865 million without a big winner from Monday night’s drawing. The chances of scoring the grand prize for that game are roughly 1 in 292 million.

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A spousal IRA is a separate Roth or traditional IRA for a non-working spouse — and it’s “often overlooked,” according to certified financial planner Judy Brown at SC&H Group.
Married couples who file jointly have until the federal tax deadline — April 15 for most taxpayers — to make 2023 IRA contributions for each spouse.
Traditional pretax spousal IRA contributions can provide a 2023 tax break, depending on income and workplace retirement plan participation.

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There’s still time to lower your 2023 tax bill or boost your refund with a lesser-known retirement savings strategy for married couples.
One requirement for individual retirement account contributions is “earned income,” such as wages or salary from a job or self-employment earnings. But there’s an exception for single-income households: the spousal IRA.

A spousal IRA is a separate Roth or traditional IRA for the non-working spouse — and it’s “often overlooked,” according to certified financial planner Judy Brown at SC&H Group in the Washington, D.C., and Baltimore area.

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These accounts can provide a current-year tax break and boost retirement savings for nonearning spouses. As of 2021, some 18% of parents didn’t work outside of the home and most stay-at-home parents were women, according to Pew Research Center.
“My advice to [nonearning] women would be make sure you’re at least doing that spousal IRA,” said Boston-based CFP Catherine Valega, founder of Green Bee Advisory.

My advice to [nonearning] women would be make sure you’re at least doing that spousal IRA.

Catherine Valega
Founder of Green Bee Advisory

How the spousal IRA works

Married couples who file jointly have until the federal tax deadline — April 15 for most taxpayers — to make 2023 IRA contributions for each spouse, assuming there’s enough earned income for the combined deposits.
Traditional pretax spousal IRA contributions can provide a 2023 tax break, depending on income and workplace retirement plan participation, explained Brown, who is also a certified public accountant.  

With income phaseouts for IRA deductibility and Roth IRA contributions, many wait until March or April for the previous year’s IRA deposits. It can be a “game-time decision” while doing your taxes, Brown said. 

The annual IRA contribution limit is $6,500 for 2023 or $7,500 for savers age 50 and older. The limit increased to $7,000 for 2024, with an extra $1,000 for investors age 50 and up.
However, “it doesn’t have to be all or nothing,” Brown said. Even a $500 or $1,000 spousal IRA contribution could provide tax savings.

Contributions could create a ‘tax problem’

While spousal IRA contributions make sense for some couples, there are other factors to consider before making deposits, said CFP Laura Mattia, CEO of Atlas Fiduciary Financial in Sarasota, Florida.For example, some couples need the extra cash for living expenses or shorter-term goals, like paying for a wedding, she said.Plus, too much pretax retirement savings could create a “tax problem” in the future, depending on the size of your accounts and future required minimum distributions, Mattia said. Pretax withdrawals boost income, which can affect Medicare Part B and Part D premiums, among other consequences.”It’s a puzzle and really depends on a lot of things,” she added.

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Almost half of all voters say canceling student loan debt is an important issue in the 2024 presidential and congressional elections, a new survey finds.
Among younger people, 70% of Gen Z respondents said the action was “very” or “somewhat” important, according to the survey of 3,812 registered voters between March 15-19.

A woman votes at the Royal Missionary Baptist Church polling location in North Charleston, South Carolina, on February 3, 2024, during the democratic primary. 
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Almost half of all voters, or 48%, say canceling student loan debt is an important issue to them in the 2024 presidential and congressional elections, a new survey finds.
Among younger people, 70% of Gen Z respondents said the action was “very” or “somewhat” important in the election, and 72% of Black voters and 68% of Hispanic voters believe the same.

The poll of 3,812 registered voters, including 2,601 Gen Z and millennial respondents, was conducted between March 15-19 by SocialSphere, a research and consulting firm.
“This survey shows that most voters, regardless of age, believe that taking a loan to pay for education should not result in a lifetime of debt,” said John Della Volpe, CEO of SocialSphere and director of polling at the Harvard Kennedy School Institute of Politics. The report was released by Protect Borrowers Action, an advocacy group.
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Outstanding education debt in the U.S. stands at roughly $1.6 trillion, and burdens Americans more than credit card or auto debt. The average loan balance at graduation is around $30,000. A quarter of borrowers were behind on their payments before the payment pause enacted during the Covid pandemic.

7 in 10 voters want action on student debt

Around 7 in 10 voters, 73%, believe the government should take some action on student loan debt, with 50% supporting partial or complete loan cancellation, the survey found.

Among Gen Z and millennial Democrats, 81% of voters surveyed favored loan forgiveness. More than half, 53%, of Gen Z respondents said they or someone in their household has student debts, as did 46% of young millennials and 39% of older millennials.

Many young people on the right now also support student loan cancellation, with 49% of Gen Z and millennial Republicans saying some or all outstanding education debt should be erased. Debt forgiveness has historically been a highly partisan issue, with supporters and detractors split down party lines.
Debt cancellation is less of a priority among older people, with just 37% of baby boomer and silent generation voters in the survey saying the issue is important to them in the upcoming elections. More than two-thirds of Republican Gen X voters, those born between 1965 and 1980, said they don’t believe student debt should be canceled.
Almost a quarter, 23%, of Gen X voters surveyed said they or someone in their household had student loan debt. Among baby boomer and silent generation voters, that share was 14%.

Support for forgiveness may impact campaign trail

The election year findings could reinforce the importance of loan forgiveness for President Joe Biden’s campaign, especially as it fights to turn around its fading support among younger voters.
The Supreme Court last June struck down the president’s $400 billion plan to deliver student loan forgiveness to as many as 40 million Americans. Since then, the Biden administration has tried to cancel the debt in various other ways, using its existing authority. Mainly by improving current loan relief programs, it has now cleared the education debts of nearly 4 million people, totaling $143.6 billion in aid.
Meanwhile, the popularity of loan forgiveness among voters may prove a challenge for Donald Trump, the presumptive 2024 GOP presidential nominee.
“The Republican party’s steadfast opposition to student debt relief remains a wildly unpopular stance — even with a majority of younger Republican voters,” said Mike Pierce, executive director of Protect Borrowers Action.
It was the legal challenge by six GOP-led states that ultimately led to the death of Biden’s sweeping loan forgiveness policy at the Supreme Court.

Trump himself has a record of opposing debt cancellation.
The former president also sided with the Supreme Court in its ruling striking down Biden’s plan.
“Today, the Supreme Court also ruled that President Biden cannot wipe out hundreds of billions, perhaps trillions of dollars, in student loan debt, which would have been very unfair to the millions and millions of people who paid their debt through hard work and diligence; very unfair,” Trump said at a campaign event in June 2023.
Correction: Donald Trump is the presumptive 2024 GOP presidential nominee. An earlier version misstated his status.

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Often called the “motherhood penalty,” caregiving demands still largely fall on women and have shaped their labor force participation and pay after becoming parents.
Even when women outearn their husbands, they still pick up a heavier load when it comes to responsibilities at home, reports show.
For men, there’s a bump up or wage “bonus” after becoming a father.

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“For mothers, employment and earnings conditional on being employed fall sharply around the time of birth for women, and, more ominously, may remain permanently lower well after childbirth,” the authors of the PNAS study wrote.
There is a dynamic that perpetuates itself, according to Jasmine Tucker, vice president of research at the National Women’s Law Center.
“If a kid is sick and someone needs to take time out of their workday, it’s going to be the woman because they are paid less,” Tucker said. “It makes more economic sense. It’s a self-fulfilling prophecy.”
Men do not face a “penalty” as parents at all. Alternatively, fathers who work full time experience a wage “bonus” when they have children, according to a separate report by the British trade union association TUC.

Fathers make roughly 20% more than men with no children, the report said.

‘Breadwinner’ moms still have a heavier load at home

But there’s another problem: Even when women outearn their husbands, they still pick up a heavier load when it comes to caregiving responsibilities, according to a separate Pew Research Center survey and analysis of government data.
“Even though there may be more egalitarian marriages, their duties at home have not been equalized,” Richard Fry, a senior researcher at Pew, told CNBC last spring. “The gender imbalance in time spent on caregiving persists, even in marriages where wives are the breadwinners.”

In fact, the motherhood penalty is even greater in “female-breadwinner” families, the PNAS study also found, where higher-earning women experience a 60% drop from their pre-childbirth earnings relative to their male partners. 

More hybrid jobs could help working moms

While the high cost of child care in the U.S. continues to weigh heavily on women’s labor force participation, shifting workplace dynamics may help, said Lauren Sanfilippo, senior investment strategist at Bank of America’s Chief Investment Office.
Coming out of the Covid-19 pandemic, many employees pushed back against return-to-office plans, resulting in a hybrid work model of three days a week in person that is now more the norm than the exception.
Office attendance has stabilized at 30% below where it was before the pandemic, according to a report by the McKinsey Global Institute.
That appears to be helping women stay in the labor force after having kids, other reports show.
“We’ll eventually see the motherhood penalty be tempered a bit by this hybrid work environment,” Sanfilippo said. “There’s a little bit more flexibility since the pandemic and that’s been a good thing.”

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BlackRock CEO Larry Fink
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BlackRock Chairman Larry Fink said capital markets can help solve a crisis brewing around the ability of Americans to afford retirement as lifespans elongate, and for the government to provide a basic safety net.
In his annual letter to shareholders, Fink called the decreasing ability to retire in a financially sound way one of the biggest economic challenges of the mid-21st Century. He said access to investing can help solve this challenge, while also pondering if the expectation for everyone to receive Social Security benefits at age 65 has become archaic.

“Today in America, the retirement message that the government and companies tell their workers is effectively: ‘You’re on your own,'” Fink wrote. “And before my generation fully disappears from positions of corporate and political leadership, we have an obligation to change that.”
Fink pointed a U.S. Census Bureau survey that found nearly half Americans between 55 and 65 have no savings in personal retirement accounts. And the investing firm’s leader noted tens of millions of Americans work part-time or gig jobs that don’t offer clear retirement contribution plans.
Worsening the outlook is a Social Security system that’s said it will not be able to pay full benefits by 2034.
The 71-year-old believes the American retirement system has entered such a deep crisis that it has become a once-in-a-generation issue and its on government and business leaders to start trying to fix it right away.
A federal law that will require employers with 401K plans to auto-enroll new workers provides a bright spot, he said. Hundreds of companies have already taken this step, Fink noted.

But corporations also have a duty to provide benefits like fund matching or financial education to workers, he said. And Fink said employees should be able to easily transfer 401K savings when they change jobs.
Increasing lifespans create further difficulties when trying to improve the retirement system, Fink said. This issue is of increasing relevance as blockbuster weight-loss drugs have already begun drastically reshaping the healthcare landscape, he said.
As a result, Fink said it’s worth taking a look at when Americans are expected to start accessing Social Security benefits, typically a sensitive topic that no politician wants to touch.
“No one should have to work longer than they want to,” he said. “But I do think it’s a bit crazy that our anchor idea for the right retirement age — 65 years old — originates from the time of the Ottoman Empire.” More

If you’re listing your home with certain features coveted by today’s buyers, that may help it sell for a higher price, new research from Zillow finds.
At the top of buyers’ wish lists is an outdoor TV, which may add more than $10,000 to the sale.

Filippobacci | E+ | Getty Images

If your home boasts certain trendy outdoor features, you may be able to sell it for more in today’s market.
At the top of the list is outdoor TVs, which may help raise the home sale price to 3.1% more than expected, representing a $10,749 boost based on the average home, according to new research from Zillow.

These sets have weatherproofing features to help them withstand exposure to precipitation and extreme temperatures, and can cost significantly more than standard indoor sets.
Other backyard features that may push sale prices higher include having an outdoor shower, which may help push sales up 2.6%; a bluestone patio, which is tied to a 2.3% increase; she shed, 2%; pizza oven, 1.9%; and outdoor kitchen, 1.7%.
The results come from Zillow’s analysis of sale premiums for 359 features across one million home sales for 2023.
“This year was really all about the backyard features,” said Zillow home trends expert Amanda Pendleton.
“It embodies this new lifestyle people want post-pandemic, where their social life is centered around their home, and specifically their yards,” she said.

Recent research from the National Association of Home Builders similarly found that outdoor features are at the top of buyers’ wish lists. That includes having a patio, exterior lighting, a front porch and landscaping.
The NAHB research also found having more space, such as by having a separate laundry room, walk-in pantry and a table area in the kitchen, were also ranked highly by the 3,000 U.S. homebuyers surveyed.

‘I wouldn’t go out of my way to install these features’

Zillow found other popular features that contributed to a higher sale price include preferred materials including soapstone, matte black and quartz, as well as beverage centers that serve as separate refrigerators to keep drinks cold.
“If you have these features already in your home, you want to make sure that you’re including them in your listing description,” Pendleton said.
“But I wouldn’t go out of my way to install these features and expect these kinds of sale premiums,” she cautioned.
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Today’s buyers are generally looking for smaller homes, around 2,070 square feet versus 2,260 square feet buyers sought 20 years ago, according to the NAHB.
Instead, today’s buyers are focusing on personalized features they prefer, according to Rose Quint, assistant vice president of survey research at the NAHB.
Due to a lack of inventory for existing homes, more homebuyers are turning to new construction. In 2023, 14% of home sales were for new homes, up from 7% a decade ago, Quint said.
Today’s homebuyers are emphasizing technology features for both safety and energy efficiency, she noted. That includes security cameras, video doorbells, programmable thermostats and multizone HVAC and energy management systems.

Trendy features can make a home sell faster

Zillow’s research pointed to home features that may help sell a home faster. The home details at the top of that list that have trended on social media — rounded corners and plant ledges — contributed to sales that were 6.2 days and 5.6 days faster, respectively.
“These types of features are really appealing to a younger buyer, a first-time buyer entering the market,” Pendleton said.
Other features that helped homes sell faster include having a frameless shower, terrazzo, picket fence, modern farmhouse, turf, fenced yard, Energy Star appliances and a saltwater pool, according to Zillow’s research.
“We are seeing more competition for homes that have these trendier features,” Pendleton said.

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The Mega Millions jackpot soared to an estimated $1.1 billion without a winner on Friday.
While it’s smaller than the last record payout, the victor could still face common pitfalls, experts say.
The next Mega Millions drawing is Tuesday at 11 p.m. ET.

The Mega Millions jackpot grew to more than $1.6 billion on Aug. 9, 2023.
Justin Sullivan | Getty Images

State taxes can be hefty

“None of these winners think about taxes until they have a third of it going right to Uncle Sam and the state government,” said Andrew Stoltmann, a Chicago-based lawyer who has represented several lottery winners.

None of these winners think about taxes until they have a third of it going right to Uncle Sam and the state government.

Andrew Stoltmann

Eight states — including California, Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming — don’t levy income taxes on lottery winnings.

However, you must redeem the winning ticket in the state where you bought it, meaning an out-of-state purchase in a high-tax state could trigger a bigger bill.
But the annuity payout could save on future state taxes, depending on where you choose to live, Stoltmann said. The annuity includes an initial sum followed by 29 annual payments.

Sign and secure the ticket

Lottery winners have a set timeline to come forward and collect their money — and some prizes have gone unclaimed.
“Sign your ticket, take photos and scans and then secure it,” said Michael Whitty, partner at law firm Smith, Gambrell and Russell, who has also advised past lottery winners.
Mega Millions says it’s critical to “protect yourself” by signing the back of your ticket. Otherwise, anyone who holds the winning ticket can file a claim to collect the proceeds.
Alternatively, there may be ways to protect your privacy by claiming the prize money via a trust or limited liability corporation. Regardless, you should consult an attorney first.

Avoid a ‘legal catfight’ on shared tickets

You could also have winning ticket issues when pooling money with friends or co-workers, according to Stoltmann.
“The nastiest legal catfights happen when a group of people buy a ticket together” and one person claims they bought the winning ticket alone, he said.
You should always have a “basic written agreement” that outlines who purchased the tickets, the numbers on those shared tickets and how the group will split the money if there’s a winner, Stoltmann said.

Mega Millions isn’t the only way to win big. The Powerball jackpot has ballooned to an estimated $800 million without a big winner from Saturday night’s drawing. The chances of scoring the grand prize for that game are roughly 1 in 292 million.

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As the Federal Reserve prepares to lower interest rates, the central bank is being particularly careful about not repeating past mistakes, experts say.
“The real danger here is that the Fed loosens prematurely, which is exactly what they did in the late 1960s,” said Mark Higgins, author of “Investing in U.S. Financial History: Understanding the Past to Forecast the Future.”

Federal Reserve Bank Chair Jerome Powell speaks during a news conference at the bank’s William McChesney Martin building on March 20, 2024 in Washington, DC. 
Chip Somodevilla | Getty Images

Slowly but surely, recessionary talk is dying down and confidence in the Federal Reserve is picking up.
Last week, the central bank held its benchmark rate steady — as expected — amid signs of positive economic growth, and signaled it plans multiple cuts before the end of the year.

Chairman Jerome Powell indicated that with the economy still growing at a healthy pace and unemployment below 4%, the Fed can take a more measured approach when loosening monetary policy.
However, if history is any guide, there would likely still be some significant economic disruptions before this period of elevated inflation is over, according to Mark Higgins, senior vice president for Index Fund Advisors and author of “Investing in U.S. Financial History: Understanding the Past to Forecast the Future.”
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Monetary policy is a balancing act, Higgins said.
“When you have extended periods of high inflation, to get back to price stability, you usually go too far in the other direction,” Higgins said.

At least, that is how it has played out in the past, he said.

The Fed’s ‘two major mistakes’

“The Fed has made two major mistakes in its history,” according to Higgins, and those two missteps still influence the central bank’s moves today.
“The first [mistake] was allowing the banking system to fail in the early 1930s, which caused the Great Depression to deepen significantly,” he said. “The second was the great inflation of the 1970s when inflationary pressures picked up and the Fed tightened but backed off prematurely, which is the risk the Fed faces now.”
While financial regulations and the creation of deposit insurance could prevent a widespread banking crisis from happening today, “the real danger here is that the Fed loosens prematurely, which is exactly what they did in the late 1960s,” Higgins said.

“Deep down, Powell is petrified of redoing Volcker again,” Steven Eisman, Neuberger Berman’s senior portfolio manager, said recently on CNBC’s “Squawk Box.”
The Fed has “engineered what looks to be a soft landing, inflation is coming down, the economy is still strong, why would you waste rate cuts now and risk a resurgence of inflation when really all you need to do is declare victory?” he said.
Today, Higgins said, “the risks of allowing inflation to persist still far outweighs the risk of triggering a recession. [The Fed’s] failure to do this in the late 1960s is one of the major factors that allowed inflation to become entrenched in the 1970s.”

The risks of allowing inflation to persist still far outweighs the risk of triggering a recession.

Mark Higgins
author of “Investing in U.S. Financial History: Understanding the Past to Forecast the Future.”

Those inflation-busting efforts and the aftermath have clearly had a lasting impact on the central bank.
Even in prepared remarks earlier this month, Powell referenced Volcker’s earlier interest rate policy as a reason policymakers don’t want to ease up too quickly now. “Reducing policy restraint too soon or too much could result in a reversal of progress we have seen in inflation and ultimately require even tighter policy to get inflation back to 2%,” Powell said.
This time around, the central bank is likely to remain extremely cautious, Higgins said, even if that means holding rates higher for longer.
“My gut is that they are aware of the risks and won’t ease too early,” he said.
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