About two million, discounted to net present value, and taking out all the tax.
Enough to live a nice lifestyle, if invested prudently.
It will not be invested prudently.
If it follows the averages, it will all be gone in five years.
He should have let the roommate keep it, as he clearly won’t be able to hang on to it.
One of the things I would do is move where it is really cheap to live.
He will have to pay 37% Federal income tax and that’s it. Incredibly, California does not tax lottery winnings. So he should walk away with a little over $6 million. If I were him, I’d move to a low (or no) tax state. Then put $3 million in a low cost tax exempt bond fund. That should yield around $100k tax free per annum. That’s not enough to live the Trump lifestyle, but it is a comfortable middle class income that he won’t have to work for. Then I’d put $2 million in a dirt cheap total US stock mkt index fund and $1 million in an international stock mkt index fund. Set the dividends to reinvest and ten years from now, the odds suggest he will have doubled that money. Anything left over I’d pay off any debt and then buy gold coins and lock them in a safe deposit box.