The record Powerball jackpot just keeps rising. It now stands at $550 million after officials say brisk sales keep driving up the payout amount.
The jackpot was boosted to $500 million on Tuesday and raised again Wednesday morning to $550 million.
The numbers are an estimate and could be increased again as the drawing nears.
Powerball officials say they now believe there is a 75 percent chance that the winning combination of numbers will be drawn Wednesday night. Financial planners, meanwhile, are urging potential winners to use restraint.
So perhaps buying an island isn't the most sound financial decision to make in the wake of winning a $550 million Powerball jackpot.
"That's right up there with squandering it," said Bill Keffer, a financial planner in Wheaton. "Actually, that's worse because I do recommend people squander a little bit of it to get it out of their system."
Island-buying was just one of the many extravagances mentioned by suburban residents lining up to buy tickets for tonight's Powerball drawing. Private planes, new homes and yachts also figured high on wish lists, all of which essentially had personal wealth experts wagging their fingers.
Eliminating all debt should be the first move in financial planning after a lottery windfall, Keffer advised.
Among suburban financial planners, Keffer isn't the only buzz kill when it comes to splurging after winning the massive Powerball jackpot, currently the second largest American lottery payout ever and the richest prize in Powerball history.
"Don't make any quick decisions," advised Cheryl Krueger, a financial planner at Schaumburg's Growing Fortunes Financial Planning. "It's really about building around a plan for the future, so if someone came to me and said they had that much money, we would look at their dreams and what they wanted to accomplish."
The financial planning experts all say lottery winners should make a plan for how they want to live their lives before they start spending money. Besides hiring a financial planner, they advise hiring an attorney and an accountant, as well. Some also suggest a private investigator and someone to answer the phone.
"You have to make sure you and your family are set up longer term instead of having fun now and going bankrupt later," said Ken Pawula, an Arlington Heights financial planner. "Don't binge. People have won the lottery and then a few years down the road they go bankrupt."
They all say to invest the lion's share of the newfound fortune. But managing the investments with a fortune of that size can also be tricky.
"At that level of wealth, there's a whole different world of investing available that has potential for higher rates of returns, but greater risk of loss as well," Keffer said.
Age, dependents, lifestyle and a number of other factors need to be taken into account when making a financial plan, the experts agree. Investment plans would differ widely between someone who won the lottery at age 25 versus someone who was a winner at age 65.
"If you're that young when you win the lottery you're obviously not going to work another day in your life," Pawula said. "You not only have to have this money last you until retirement age, but throughout your entire life."
But there should be room for frivolity -- something high on the lists of suburban Powerball players.
"Live happily, that would be definite, for sure," said Bryan Husch of Fox Lake. "My wife and I would be traveling a lot. All the kids would be set for college and houses and everything they ever needed. I'd buy a 40-foot boat. I'd let my wife name it."
Krueger said winners of a lottery payout this big should be able to have flights of fancy without risking a lifetime of misfortune.
"Live your dream," she said. "As long as you can afford it."
Keffer agreed. "If you have that level of wealth come to you, you should carve out a piece to tickle some fancies you may have."
Besides buying islands, which Pawula called a "terrible idea," fancy cars and big houses were common themes among suburban lottery winner hopefuls. "Cars only if you need one," Pawula said. "Condos only if you're going to use them, and houses depend on what you think is going to happen to the market."
Blake Johnson, a 10-year-old from Arlington Heights who would have to rely on his parents to win the lottery, wants his own soccer field.
"I'd get a huge house," he said, emphasizing the adjective. "With a big basement so then I can play sports and stuff in there. I'd have a whole soccer field."
There are also many altruistic and philanthropic potential lottery winners.
"That's a crazy amount," said Igor Dimovski of Streamwood. "I don't know that I could spend it all in my lifetime. I'd give 70 percent to charity and the rest I'd spend and take care of my family."
The financial planners are keen on the idea of starting a charity. That's because it provides an outlet for the lottery winners to remain actively involved in their finances and actively working.
"I like this," Krueger said. "Especially if it's charity work that's not being done somewhere else and they feel motivated to do something."
With the Powerball hype competing for attention with the ongoing "fiscal cliff" crisis playing out in Congress, some potential winners have suggested using the money for the good of the country. However, the financial planners don't believe it would make much of a dent.
"It would probably keep Big Bird going if you gave it to the government," Krueger said. "But why do it? You're going to be giving a lot toward the fiscal cliff anyway."
That's because almost half of the jackpot will be eaten up by taxes.Copyright © 2014 Paddock Publications, Inc. All rights reserved.