Lump sum vs annuity calculator
The annuity pays the whole advertised jackpot over 29 years. The lump sum pays about half of it now. Which is worth more depends on tax and on what your money can earn. Change the inputs and see which wins, year by year.
Cash option
$47,000,000
before tax
Take-home, lump sum
$29,639,920
after about 36.9% tax
Total tax, lump sum
$17,360,080
Federal $17,360,080 + state $0
Lump sum breakdown
Your top federal rate on this win: 37%. The lottery withholds only 24%, so a large jackpot usually means a large bill on top.
Annuity: 30 payments over 29 years
First payment
$1,505,144
rises 5% a year
Total take-home
$63,897,592
from $100,000,000 gross
Worth today at 4%
$33,331,724
annuity take-home in today's money
On these numbers the annuity is worth more in today's money ($33,331,724 versus $29,639,920). Change the discount rate and see how it flips.
See every annuity payment
| Year | Gross | Federal tax | State tax | Take-home |
|---|---|---|---|---|
| 1 | $1,505,144 | $526,983 | $0 | $978,160 |
| 2 | $1,580,401 | $554,829 | $0 | $1,025,572 |
| 3 | $1,659,421 | $584,066 | $0 | $1,075,355 |
| 4 | $1,742,392 | $614,765 | $0 | $1,127,627 |
| 5 | $1,829,511 | $646,999 | $0 | $1,182,512 |
| 6 | $1,920,987 | $680,845 | $0 | $1,240,142 |
| 7 | $2,017,036 | $716,384 | $0 | $1,300,653 |
| 8 | $2,117,888 | $753,699 | $0 | $1,364,189 |
| 9 | $2,223,782 | $792,880 | $0 | $1,430,903 |
| 10 | $2,334,972 | $834,020 | $0 | $1,500,952 |
| 11 | $2,451,720 | $877,217 | $0 | $1,574,503 |
| 12 | $2,574,306 | $922,574 | $0 | $1,651,733 |
| 13 | $2,703,021 | $970,198 | $0 | $1,732,823 |
| 14 | $2,838,173 | $1,020,204 | $0 | $1,817,968 |
| 15 | $2,980,081 | $1,072,710 | $0 | $1,907,371 |
| 16 | $3,129,085 | $1,127,842 | $0 | $2,001,243 |
| 17 | $3,285,540 | $1,185,730 | $0 | $2,099,810 |
| 18 | $3,449,816 | $1,246,512 | $0 | $2,203,304 |
| 19 | $3,622,307 | $1,310,334 | $0 | $2,311,973 |
| 20 | $3,803,423 | $1,377,347 | $0 | $2,426,076 |
| 21 | $3,993,594 | $1,447,710 | $0 | $2,545,884 |
| 22 | $4,193,274 | $1,521,591 | $0 | $2,671,682 |
| 23 | $4,402,937 | $1,599,167 | $0 | $2,803,770 |
| 24 | $4,623,084 | $1,680,621 | $0 | $2,942,463 |
| 25 | $4,854,238 | $1,766,148 | $0 | $3,088,090 |
| 26 | $5,096,950 | $1,855,952 | $0 | $3,240,998 |
| 27 | $5,351,798 | $1,950,245 | $0 | $3,401,552 |
| 28 | $5,619,388 | $2,049,254 | $0 | $3,570,134 |
| 29 | $5,900,357 | $2,153,212 | $0 | $3,747,145 |
| 30 | $6,195,375 | $2,262,369 | $0 | $3,933,006 |
An estimate for educational use, using 2026 US federal brackets and the standard deduction, with the win taxed as ordinary income on top of the income you enter. It ignores deductions, credits, the alternative minimum tax, local taxes you do not enter and trusts. Pools, gifts and estate tax change the picture. Talk to a tax professional before you claim a large prize.
How the annuity really works
Powerball and Mega Millions annuities are 30 payments: the first immediately and then one a year for 29 years, each 5% bigger than the last. The first payment is only about 1.5% of the advertised jackpot, because the later payments are much larger. A $500 million jackpot starts at about $7.5 million.
If a winner dies, the remaining payments normally go to their estate, which can matter for family planning.
Lump sum or annuity: how to think about it
- The lump sum is a fixed amount now, usually about half the advertised jackpot, and is taxed in one year at the top brackets.
- The annuity pays the full advertised amount over 29 years, rises 5% a year and is taxed year by year, often at lower rates in the early years.
- The right answer depends on how much you can earn on invested money, your discipline, your health and family, and your tax situation.
- Winners who take the annuity cannot spend it all at once, which protects some people from themselves. Winners who take the lump sum can invest it, but also lose it.
Why the discount rate matters
A dollar in 20 years is worth less than a dollar today, because money can earn interest. The discount rate in the calculator is the return you assume on invested money. At 0% the annuity wins easily because it pays the full jackpot. At high rates, the lump sum wins because you could grow it faster than the payments arrive. Try 3%, 5% and 7% to see where the break-even is.
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<p style="font-size:14px">Free tool by <a href="https://cryptodrawz.com/tools/lump-sum-vs-annuity-calculator">CryptoDrawz</a></p>Frequently asked questions
What percentage of the jackpot is the lump sum?
Typically 45% to 60% of the advertised jackpot, set by the lottery's cash value on the day. The lottery's site shows it. Enter it in the tool.
Do annuity payments increase?
Yes. Both Powerball and Mega Millions annuities are 30 graduated payments that rise 5% each year.
Is the annuity safer?
It spreads risk and spending over decades, which protects people from overspending. It also keeps you in the lottery's payment chain for 29 years. Many financial advisers still suggest the lump sum for disciplined investors.
Which has lower taxes?
The annuity often has a lower effective rate in early years because each payment is smaller. But rates and laws can change over 29 years, so this tool uses today's rules throughout.