Powerball and Mega Millions: annuity or lump sum?
Compare both jackpot payout choices after estimated federal and state taxes. Pick Powerball or Mega Millions, choose your state and filing status, then adjust how much you think the lump sum could earn each year.
In plain English
Lump sum: You receive the smaller cash value now, after estimated taxes.
Annuity: You receive 30 payments over 29 years. Each payment is 5% larger than the previous one.
The calculator asks whether investing the lump sum could beat those future payments. Money received today can be invested right away, so payments received years from now count for less when your return estimate is higher.
Estimated lump sum after taxes today
$215.25M
Cash value of $341.6M minus $126.3M in taxes.
Estimated value today of all 30 annuity payments
$224.31M
$496.5M would be paid after estimated taxes over 30 years. Using your 5.0% return estimate, those future payments are worth $224.3M today.
See the 30-year annuity payment schedule
Each year shows the gross payment, federal and state taxes for that year, the net you would actually receive, and what that net is worth in today's dollars (the “today's value” column).
| Year | Gross payment | Taxes | After taxes | Today's value |
|---|---|---|---|---|
| 1 | $11.83M | $4.33M | $7.50M | $7.50M |
| 2 | $12.42M | $4.55M | $7.87M | $7.50M |
| 3 | $13.04M | $4.78M | $8.26M | $7.49M |
| 4 | $13.70M | $5.02M | $8.67M | $7.49M |
| 5 | $14.38M | $5.28M | $9.10M | $7.49M |
| 6 | $15.10M | $5.54M | $9.56M | $7.49M |
| 7 | $15.85M | $5.82M | $10.03M | $7.49M |
| 8 | $16.65M | $6.12M | $10.53M | $7.48M |
| 9 | $17.48M | $6.42M | $11.06M | $7.48M |
| 10 | $18.35M | $6.75M | $11.61M | $7.48M |
| 11 | $19.27M | $7.09M | $12.18M | $7.48M |
| 12 | $20.23M | $7.44M | $12.79M | $7.48M |
| 13 | $21.25M | $7.82M | $13.43M | $7.48M |
| 14 | $22.31M | $8.21M | $14.10M | $7.48M |
| 15 | $23.42M | $8.62M | $14.80M | $7.48M |
| 16 | $24.59M | $9.06M | $15.54M | $7.47M |
| 17 | $25.82M | $9.51M | $16.31M | $7.47M |
| 18 | $27.12M | $9.99M | $17.13M | $7.47M |
| 19 | $28.47M | $10.49M | $17.98M | $7.47M |
| 20 | $29.89M | $11.02M | $18.88M | $7.47M |
| 21 | $31.39M | $11.57M | $19.82M | $7.47M |
| 22 | $32.96M | $12.15M | $20.81M | $7.47M |
| 23 | $34.61M | $12.76M | $21.85M | $7.47M |
| 24 | $36.34M | $13.40M | $22.94M | $7.47M |
| 25 | $38.15M | $14.07M | $24.08M | $7.47M |
| 26 | $40.06M | $14.78M | $25.28M | $7.47M |
| 27 | $42.07M | $15.52M | $26.55M | $7.47M |
| 28 | $44.17M | $16.30M | $27.87M | $7.46M |
| 29 | $46.38M | $17.12M | $29.26M | $7.46M |
| 30 | $48.70M | $17.97M | $30.72M | $7.46M |
Start with the two payout choices
Powerball and Mega Millions use the same basic payout structure. The advertised jackpot is the total of 30 annuity payments. The first payment is made right away, followed by 29 yearly payments. Each payment is 5% larger than the one before it. The cash option is a smaller, one-time payment based on the money available in the jackpot prize pool for that drawing.
Why the calculator turns 30 payments into one number
A dollar received today can be invested immediately. A dollar received years from now cannot. That means the total printed on an annuity is not directly comparable with cash paid today. The calculator converts all 30 after-tax payments into an estimated value today, then compares that value with the after-tax lump sum.
How to use the yearly growth estimate
The slider represents the yearly return you think you could keep after investment fees and investment taxes. If you are unsure, leave it at 5% and then try a lower and higher number. A higher estimate gives the lump sum more time to grow. A lower estimate gives more weight to the guaranteed annuity payments. Investment returns are never guaranteed, so the result is an estimate rather than a recommendation.
How the tax estimate works
The calculator applies the current 2026 federal tax brackets and the selected state's lottery tax rate. For the annuity, it estimates taxes separately for each annual payment. It assumes the winner has no other major taxable income and that today's tax rules stay the same for all 30 payments. Actual taxes can change with deductions, other income, residency, and future laws, so a real winner should speak with a qualified tax professional before choosing a payout.
Annuity vs lump sum FAQs
Does this calculator work for both Powerball and Mega Millions?
Yes. Both games offer a cash option and an annuity with one immediate payment followed by 29 annual payments. Each annuity payment is 5% larger than the previous one. Choose either game at the top of the calculator to use its current jackpot and cash value.
Is the lump sum or the annuity better?
There is no single answer for everyone. A higher investment return estimate usually makes the lump sum look stronger because the cash can be invested immediately. A lower estimate usually makes the guaranteed annuity payments look stronger. Taxes, risk, spending plans, and estate planning also matter.
Does taking the annuity lower the total tax bill?
Not necessarily. A large jackpot can place both the lump sum and annual payments in high federal tax brackets. The annuity spreads taxable income across 30 tax returns, but your final total can change because of other income, deductions, state rules, and future tax laws. This calculator estimates every payment using current 2026 tax rules.
What happens if a winner dies during the annuity?
Powerball says the remaining prize balance is paid to the winner's estate and that payments can continue to heirs after a court order, subject to the paying lottery's laws. Mega Millions says scheduled payments continue to the winner's designated beneficiary or estate.
Why is the lump sum smaller than the advertised jackpot?
The advertised jackpot is the total of 30 future annuity payments. The cash option is the money available in the jackpot prize pool on the drawing date. Because cash received today can be invested to fund future payments, the cash option is lower than the total of those 30 payments.
Payment rules verified with the official Powerball FAQ and the official Mega Millions payout guide.