Powerball jackpot climbs to $1 billion. What you'd pocket after taxes, and what to do with the rest.

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After 43 drawings with no jackpot winner, the Powerball's big prize stands at $1 billion in annual payments or a lump sum cash payment of $433.1 million. The next drawing is set for Wednesday, Aug. 12.

The odds of winning a lottery jackpot are slim — 1 in 292.2 million for Powerball, according to the lottery.

So, imagine for a moment you do win. How much of the prize would you take home after taxes? We'll break it down — and suggest six ways to invest your windfall safely.

The IRS taxes lottery prizes differently depending on how the winner chooses to get paid. You have two choices: lump sum payout or annual payments spread over 30 years. Most lottery winners opt for the cash lump sum up-front, even though it ultimately means fewer dollars in their pocket, but still a whole lot.

What do federal taxes look like on a lump sum payment? The federal tax rate on any prize over $5,000 is 24% , which gets immediately deducted from your winnings. And for a large prize like the Powerball, that lump sum will also catapult you into the highest income tax bracket, so you'll pay the top federal tax rate of 37% the following year.

The annuity option, which serves as protection against high inflation, gives you the full $975 million pot over a longer period. But you'll still see that 24% taken off the top of every payment. You'll also be in the highest federal income bracket and have to pay federal taxes you owe beyond that withholding.

Just when you thought you'd paid the piper, here come state taxes. How much you'll pay in state income taxes depends on where you live. California residents face the highest state tax rate, which tops out at 13.3%, but state tax rates across the country vary, starting at 2.5%.