A smaller prize than it seems

The first thing to bear in mind is that while the jackpot is eye-wateringly large, the actual payout will be much less.

If someone claims it, the winner would not actually receive $1.537 billion in one big check the next day. As a single winner, he or she can either choose a lump sum payment that amounts to about $878 million or receive $1.537 billion worth of annual payments that get progressively higher over 30 years.

After that, the taxman gets to take a big bite. If the winner comes from a state without a lottery tax like Florida or Texas and chooses a lump sum, the federal government will take about $211 million of that, leaving $667 million. The winning ticket was reportedly bought in South Carolina, which would take 7%, leaving the holder with about $606 million.

That jackpot is starting to look a lot smaller, though it’s still a fair chunk of change.

Where windfalls go

The conventional wisdom is that winning the lottery will change your life. While that’s probably always true, research suggests not always in the way you might hope.

Economists Guido Imbens and Bruce Sacerdote and statistician Donald Rubin showed in a 2001 paper that people tend to spend unexpected windfalls. Looking at lottery winners approximately 10 years after winning showed they saved just 16 cents of every dollar won.