Lottery Annuity Calculator
Powerball and Mega Millions pay the advertised jackpot as 30 graduated annual installments, each 5% larger than the last. Enter a jackpot to see the payment schedule’s shape and the cash-option tradeoff.
Example: with Advertised jackpot ($) 100000000 · Annual payments (years) 30 · Yearly payment increase (%) 5 · Cash option (% of jackpot) 48 → First annual payment: $1,505,144.
Computed by the calculator below using its default values. Change any input to see your own numbers.
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Check it outHow the 30-year lottery annuity payout works
The advertised jackpot is the sum of all 30 payments, not what you get up front. Payments start small and grow 5% a year: on a $100 million jackpot the first check is about $1.51 million and the last one about $6.2 million. The first payment equals jackpot × 0.05 ÷ (1.05³⁰ − 1) ≈ 1.505% of the advertised amount, and each later payment multiplies by 1.05.
The lump sum vs annuity choice is really nominal dollars versus present value. The cash option — recently around 45–52% of the advertised jackpot — is the money the lottery would otherwise use to buy the 30-year bond ladder funding your payments. Take the annuity and you lock in the full schedule (payments continue to your estate if you die); take the cash and you can invest it yourself, but taxes hit the whole amount in year one.
How it’s calculated
First payment = jackpot × g ÷ ((1 + g)ⁿ − 1), the graduated-annuity formula whose n payments growing at rate g sum exactly to the advertised jackpot; with the Powerball/Mega Millions defaults g = 5% and n = 30, the first payment is about 1.505% of the jackpot. Final payment = first × (1 + g)ⁿ⁻¹. Cash option = jackpot × your chosen percentage. All figures are pre-tax.
Results update as you type and are estimates, not professional advice — verify important decisions with a qualified professional.
Common mistakes
- Comparing the cash option to the advertised jackpot dollar-for-dollar — one is a present value, the other a 30-year nominal total.
- Assuming 30 equal payments: they start near 1.5% of the jackpot and quadruple by year 30 (1.05²⁹ ≈ 4.12×).
- Treating the 24% federal withholding as the final tax bill — jackpot income lands in the 37% top bracket, plus state tax.
Frequently asked questions
How is a lottery annuity calculated?
Both big US lotteries pay 30 installments that each grow 5%. The first payment is jackpot × 0.05 ÷ (1.05³⁰ − 1), about 1.505% of the advertised amount; every later check is 5% bigger than the one before.
What does a $100 million lottery annuity pay per year?
About $1.51 million in year one, rising every year to roughly $6.2 million in year 30. The 30 checks average $3.33 million and sum to the full $100 million before taxes.
Is the lump sum or the annuity worth more?
The annuity pays more total dollars (the full jackpot); the cash option is smaller because it's the present value, recently 45–52% of the advertised figure. Which is better depends on taxes, spending discipline, and what return you could earn investing the lump sum.
What happens to annuity payments if the winner dies?
The remaining payments don't vanish — lottery rules direct them to the winner's estate or beneficiaries, either as continuing checks or a discounted payout.
How much tax comes out of lottery payments?
The IRS takes 24% withholding immediately, but jackpot-sized income is taxed at the 37% top federal rate when you file, and most states add their own income tax on top.