The Money Guy Show, Why Your 401(k) Match Matters So Much (Nov. 4). Includes sponsored segments or referral links. The Money Guy Show on YouTube
By Finance Unc
The Money Guy Show explains why an employer's 401(k) match is the first money to capture, since it's an instant return on what you put in. The Ramsey Show takes on car payments as a budget drain, and walks through four accounts every parent should know about.
Hosts' opinions are their own; check how any account or rule applies to your situation. Our watch lists feature videos we think readers will find useful; creators don't pay to be featured, and we note sponsored segments and referral links.
The advertised jackpot isn't what a winner gets. Between the cash option, the IRS and your state, a big prize can shrink by more than half. Here's how it works, and what to do first.
By Finance Unc
Lump sum or annuity. A Powerball or Mega Millions jackpot is advertised as the total of 30 annual payments over 29 years, each about 5 percent larger than the last. Winners can instead take the cash option, one payment that is much smaller: this week's $847 million Powerball jackpot was worth far less as cash, and Mega Millions' $505 million estimate for Friday is about $213 million as cash, before taxes. The annuity spreads out taxes and protects against spending too fast; the lump sum gives you control of the money now.
Federal taxes. Lottery prizes over $5,000 have 24 percent withheld for federal income tax when you claim them, the IRS says. But a jackpot puts a winner in the top federal bracket, 37 percent, so the withholding usually falls short, and the rest is due when you file. Many big winners make estimated tax payments that year to avoid penalties. Smaller prizes count as taxable income too.
State and local taxes. It depends where you live and where you bought the ticket. States with no broad income tax, such as Florida, Texas and Washington, don't tax lottery winnings, and California and Delaware don't tax their own state lottery prizes; most other states do, and New York City adds a city tax. If you bought the ticket in another state, you may owe that state's tax as well.
What to do first. Sign the back of the ticket, make a copy and keep it somewhere safe. Check your state lottery's claim deadline, usually 90 days to a year, and whether your state lets winners stay anonymous; some do, many don't. Before you claim, talk with a tax professional and a fee-only financial adviser, decide between cash and annuity with them, and consider paying down debt and setting money aside for the tax bill before anything else. Be ready for scams: fake 'lottery officials' and strangers asking for money often target new winners.
The 8-1 vote lifts the U.K.'s benchmark rate by a quarter point; one member wanted a half point. The bank expects British inflation to reach about 5 percent by mid-2027.
An illustration of London with rising stacks of coins and a home gas boiler. Not a photo. Illustration
By Finance Unc
The Bank of England raised Bank Rate by 0.25 percentage point to 4 percent on Thursday, November 5, after its Monetary Policy Committee voted 8 to 1 at a meeting that ended November 4; one member voted for a larger increase, to 4.25 percent, the bank said. 'The conflict in the Middle East is now in its ninth month. Global energy prices have continued to rise from an already elevated level,' the committee wrote. U.K. inflation rose to 3.5 percent in September and is expected to reach about 5 percent by the middle of next year before falling.
The bank said there is still limited evidence that higher energy costs are spreading to other prices and wages, but that the inflationary pressure building up now warrants a rate increase, and that recent economic data have been stronger than expected. It follows the European Central Bank's increases in June and September and the Federal Reserve's in September. The Bank of England's next decision is December 17. For Americans, higher overseas rates can affect the dollar's value and the cost of travel and imported goods.
